AIBU to feel disheartened by earning into the higher tax band?

[Chocolateapot]

I have finally after many many years of studying progressed in my career to just slightly above the 40% tax threshold. Unfortunately I’ve realised this now means any additional income I earn is now taxed at 40%, student loan 9% and 2% national insurance, essentially giving a marginal tax rate of 51%.

Not sure why I bothered tbh

It's not sustainable unless we start forcing billionaires to pay tax. The super wealthy are the reason governments have no money. We cannot just stop paying benefits to people or our country would become a hell scape, with children begging on the streets and crime through the ceiling; desperate people will do desperate things. Do you really want to live somewhere like that? The fact is that there are not enough jobs to go round even if everyone were able to work. And that's going to get even worse with AI - it already is. We have to pay people a basic income if they either can't work or cant find work.

But i do agree that it's the middle that is being squeezed and that is not the answer. Clamp down on the likes of Google, Starbucks, Amazon- if they want to trade here they pay their fair share of tax.

I think that house prices are a big part of this too.

Peoples lifestyles do not look as they imagined…!

Yep, this is very much a problem. The key thing to remember is that it doesn't matter whether one thinks people earning on the cusp of 100k should be annoyed and take action to avoid it, it only matters if they are doing it. And the incentive to do so plus the time it's applicable have both recently been significantly extended, thanks to the 9 month free childcare provisions.

The billionaires have left.
The super wealthy are mobile. High earning professionals are not.

I think there is a middle ground between children begging on the streets and making hard work/ study pointless. I expect most people do, given the polls.

I can never understand why the anger is always directed down and not at the likes of fucking Amazon. How is it fair that the middle pay so much tax and Jeff Bezos earns a literal fortune and pays nothing. This is the problem. Not people on benefits. Im not sure where all these jobs for people on benefits would appear from anyway. Students with degrees cant even get jobs in coffee shops.

This attitude is the problem with the UK.

No everyone doesn’t pay tax. Most people are net beneficiaries.

if you work in an international / global role you can move to many other countries in the world (many of which even have higher wages)

The NHS is terrible largely due to mismanagement and wasting money on ridiculous procurement process & if you also pay for private medical insurance because you can’t afford to wait months for essential surgery without which you couldn’t work, then no “free” NHS is not a consolation prize.

Selling someone not to be bothered because their marginal tax rate is 51% is ridiculous. So instead of staying at home collecting benefits, she has gone to work and works for the government until lunchtime for every extra £1 she earns.

The billionaires are making billions in our country: amazon, Starbucks etc have not left - they are here making a fortune. Tax the fuckers.

The benefits bill will exceed the income tax revenue in 2026.

This line keeps being trotted out.
It is irrelevant.

What matters is the total tax take, not just income tax.
You have to include dividend tax, capital gains tax, inheritance tax, corporation tax (all the taxes that affect rich people and which need raising).
Plus things like fuel duty, alcohol and tobacco duty.
Plus of course VAT (which should be kept low).

Not true. There is no clear data about billionaires, but there are many left in the UK and a quick google shows you that, so the comment is simply polemic. It’s irrelevant anyway, because they pay little tax and organise their affairs to ensure that remains the case: they are not stupid. Their assets are capital, not generated by income and work, like the rest of us. They can’t take land and houses with them but they will be owned offshore.

You must, surely have clocked the transfer of power and assets from the state to private holders in recent decades?

People want functioning public services, schools, hospitals, roads, infrastructure and so on. Nobody wants to pay the tax that funds it all.

Lots of people here saying “I might as well go part time” as if that’s a bad thing. Isn’t it great to have enough income to take the hit of going part time? Spend more time with your kids/family, volunteer, walk in the park, read a book? What’s the problem?

If you’d rather that than the extra 49p/£1, crack on and enjoy it!

I can’t believe you truly think billionaires don’t pay tax. Have a look at the government stats of who’s paying and who’s avoiding tax. Don’t believe anything Gary Stevenson or Zack Polanski tell you. What they understand about tax could be written on the back of a postage stamp.

Not true at all. Which billionaires ‘arrange their tax to pay the little possible’? Most billionaires have a range of citizenships and will chop and change where they live depending on where suits them. Take Sir Jim Ratcliff. Recently moved as he was sick of the high levels of taxes here. His and others decisions to move leaves a big hole in the nations finances. RR knows this hence she hasn’t introduced a ‘wealth tax’ as it would simply hasten the exodus.

Is everyone really that confident that they'll never get laid off or made redundant?

Maybe it's growing up in the 90's where a lot of my parents generation were laid off, or maybe it's that I work in a sector where 1-2 year contracts are the norm, but I'm glad that benefits will be there if I need them... and I'm really not convinced they pay as much as people make out.

And has anyone actually tried to get a job in the last year or so? It's getting really hard!

Even if you're skilled/creative, someone somewhere is training an AI for your job right now - ironically a lot of the actual vacancies in my field now are for training AI

Ah but… are the benefits actually there if you need them for your £50k earner if they get laid off?

Given the savings threshold, which one would imagine you might be able to accrue in well paid work, you aren’t really entitled to very much at all…

This !!!!

You mean pensioners and kids with SENDs? Because that’s where most of it goes. Would you prefer to have them all put down? A final solution?

This is hilarious!

You're clearly trying to defend the government's economic policy without understanding what it is.

It's very clear you didn't realise that, yes, the interest on people's savings are taxed at 45% if they are middle earners.

Are you an adviser to Rachel Reeves? 😂

OMG please stop digging

Until Britain addresses this we are fucked. We are losing workers and all incentives to do well.

Sorry but I think you’re really naive if you took a student loan without understanding the impact…I and all my friends were also 17 and understood what ‘loan’ and ‘interest’ means.

As a high earner I don’t understand it. You still get more money left at the end of the day? And it can grow further.

the only problem is 100k cliff especially if you have young kids

Honestly, I think it's worth it. The NHS is a miracle, whilst schools could be better, we have good education, our vulnerable are cared for. It's tough when you're at the stage of not using services and only paying in, but one day you'll see a parents cancer cured for free, your children getting free education, your elderly neighbour getting carer visits and support..... It's not perfect and services could be better, but when you need them there is something there. You're still taking home everything you were before plus half of your increase and once the loan is paid off (which presumably you chose to take out in the first place) then you'll have that bit too.

There are no others.

Beyond ISAs and premium bonds, there are no other tax free savings you can invest in legally.

The closest you can get is to invest in pensions for legal tax avoidance, (although occasionally an NS&I product might come along like it did during Covid).

You've made a fool of yourself and it's absolutely hilarious.