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Since 50% Tax On People Earning Over £150K Has Started

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"The new rate will affect the 300,000 highest earners in the UK, out of the 29 million people who pay income tax.

It will be levied on taxable incomes greater than £150,000 a year and aims to raise an extra £2.4bn by next year.

The 600,000 people who earn more than £100,000 a year will have their personal tax allowance eroded too, raising £1.5bn for the government."

So here we are 9 months into the new 50% tax rate. But I know plenty of dentists, lawyers, bankers, business people on £150k+ and none of have left the country in droves and I'm intrigued.

I suppose the ones who have been earning a lot over many years have already built up decent assets and properties and so don't mind a couple of years of 50% tax (effectively 60% all told)?

And I know others are escaping the worst effects of the tax by 'running their own businesses' and paying themselves a 'salary'. Although just how good can a dodgy account be?

But did this ever actually happen? "Millionaire Premier League footballers are planning to evade the controversial new 50p income tax rate by asking clubs to pay their hefty wages as interest-free loans.

The tactic, which is being considered by some of the richest stars at Manchester United, Arsenal and Liverpool, would allow players to initially pay a mere 2.5 per cent tax on some of their earnings."

And have those who left the UK got away with it? The Inland Rev are now coming down hard on those who are 'residents abroad' but who still own property in the UK, or even a mobile phone account or golf club membership!

Seems the only ones who will truly feel the effect of the 50% rate are the ones who have previously earned little and therefore haven't yet had the opportunity to build assets or buy property, and now just as their ship's coming in they will have to give away over half to tax thereby scuppering any chances of buying a decent property - the young and / or honest maybe?

Any thoughts?

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Does anyone have a breakdown of the numbers of people/%ages of this 300,000/600,000 employed within each skimmer, scammer, scummer cartelised profession?

But I know plenty of dentists, lawyers, bankers, business people on £150k+ and none of have left the country in droves and I'm intrigued.

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Did you really expect them to jump on to a plane the day it came in?

Obviously not everyone will up sticks.. some will choose to put more into a pension, others may leave when the opportunity arises, other's will not move even if you up the tax to 80% (although they might retire early).

It's a balancing act.. set at the margins

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Seems the only ones who will truly feel the effect of the 50% rate are the ones who have previously earned little and therefore haven't yet had the opportunity to build assets or buy property, and now just as their ship's coming in they will have to give away over half to tax thereby scuppering any chances of buying a decent property - the young and / or honest maybe?

It's only 50% of income above a certain level - for a £200k earner the marginal effect of 50% tax is only to grab about 2-3% of their overall income. Not enough to scupper anything.

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the 50 per cent top tax rate, in isolation from wider tax reform, was tokenism: waving the red flag rather than cracking the whip. An obvious loophole, so obvious that it hardly needs experts to identify it, is the disparity between income and capital gains tax rates. Payment in shares which appreciate in value generate a capital gain taxable at 18 per cent instead of the 40, then 50 per cent, paid on earned income over £150,000.

The danger of allowing big differentials to arise between taxes on earnings and capital was clearly understood by Nigel Lawson and the last Conservative government, which taxed them at the same rate. This Government's enthusiasm for incentivising entrepreneurs led to a tapered rate, then widely abused and now abolished, leaving a gaping hole in the defences against tax avoidance.

http://www.independent.co.uk/opinion/commentators/vince-cable-government-cannot-wash-its-hands-of-tax-1732750.html

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Some are probably working less (and so earning less and paying less tax overall).

Or, like a dentist I know, are upping their prices to the point where they earn more than before despite the 50% state cut.

Not many can do that admittedly.

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It's only 50% of income above a certain level - for a £200k earner the marginal effect of 50% tax is only to grab about 2-3% of their overall income. Not enough to scupper anything.

Indeed. Isnt the highest marginal rate of taxation on people earning £15-20k? Something like 96% as the benefits are withdrawn.

I always loved how in the 80s they said the top rate of tax at 40% now collects xxx billions more than it did at 60%.

Yeah, because the top rate of tax of 40% now includes everyone who was taxed at 40 and 60%, instead of just those at 60% :lol:

Foocking Laffer. Craziest thing is people buy it too.

50% tax is absurdly low, particularly if youre doing some public sector non job that shouldnt even pay NMW.

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It's only 50% of income above a certain level - for a £200k earner the marginal effect of 50% tax is only to grab about 2-3% of their overall income. Not enough to scupper anything.

Thanks for that. I'd been labouring under the delusion that you got taxed 50% of all your income if you earned £150k + and 40% of £100k +. So basically you only get taxed 40 or 50% on anything earned OVER those set amounts. Mind you, when a 3 bed house in a London suburb can cost over a million, it does scupper a bit.

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"The new rate will affect the 300,000 highest earners in the UK, out of the 29 million people who pay income tax.

It will be levied on taxable incomes greater than £150,000 a year and aims to raise an extra £2.4bn by next year.

The 600,000 people who earn more than £100,000 a year will have their personal tax allowance eroded too, raising £1.5bn for the government."

So here we are 9 months into the new 50% tax rate. But I know plenty of dentists, lawyers, bankers, business people on £150k+ and none of have left the country in droves and I'm intrigued.

Any thoughts?

For someone who earns 151K the extra tax is tiny and not worth leaving the country for.

It is only when you get to say, 2million plus that it matters.

Do you know any of these people?

tim

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For someone who earns 151K the extra tax is tiny and not worth leaving the country for.

It is only when you get to say, 2million plus that it matters.

Do you know any of these people?

tim

That's been pointed out to me now.

Actually I do know some people earning a lot more than 2 million p.a. but they don't count because they are foreigners who live abroad, are in their late 60's +, and have assets all over the world. They are also hideously corrupt, extremely well connected, power hungry, and a bit mad, really . . . but that's another story.

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Indeed. Isnt the highest marginal rate of taxation on people earning £15-20k? Something like 96% as the benefits are withdrawn.

I always loved how in the 80s they said the top rate of tax at 40% now collects xxx billions more than it did at 60%.

Yeah, because the top rate of tax of 40% now includes everyone who was taxed at 40 and 60%, instead of just those at 60% :lol:

Foocking Laffer. Craziest thing is people buy it too.

50% tax is absurdly low, particularly if youre doing some public sector non job that shouldnt even pay NMW.

It's actually 116% rising to 117% when the National insurance increases to 12%.

And it is only applicable to those whom are single and under 25 since the introduction of working tax credits. It will end when Universal credit comes in (unfortunately, that is when I turn 25 and would be eligible for working tax credit).

Essentially, it is the point where you lose 85% of benefit for each £1 earned whilst paying 20% tax and NI of 11/12% on each £1 earned.

Instead of doing an hours overtime to earn a bit extra, the rational man in such a position should ask to drop an hour and boost his income by about £1.02 per hour dropped.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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