Jump to content
House Price Crash Forum
Sign in to follow this  
The Masked Tulip

40% Tax Rate On 32K Salary From Next Financial Year?

Recommended Posts

Is that right? From next year the 40% tax rate begins at 32K salary/income?

32k + the personal allowance (9440) so you'll have to earn over 41.5k to start getting taxed at 40%.

Share this post


Link to post
Share on other sites

Is that right? From next year the 40% tax rate begins at 32K salary/income?

32k + the personal allowance (9440) so you'll have to earn over 41.5k to start getting taxed at 40%.

Share this post


Link to post
Share on other sites

32k + the personal allowance (9440) so you'll have to earn over 41.5k to start getting taxed at 40%.

Correct. For reference, the current threshold is 34370 and the current personal allowance is 8105. This makes the typical salary threshold £42.5k.

This is probably a sensible change (raising the personal allowance) and raising the tax on higher earners. However, the higher rate salary threshold hasn't changed significantly for as long as I can remember; the threshold was something like £41k is 2008. Gotta love fiscal drag!

Share this post


Link to post
Share on other sites
Gotta love fiscal drag!

Actually it's a deliberate policy. As they raise the personal allowance to 10k they are lowering the higher rate threshold. So that the tax cut doesn't go to "the rich".

Share this post


Link to post
Share on other sites

Correct. For reference, the current threshold is 34370 and the current personal allowance is 8105. This makes the typical salary threshold £42.5k.

This is probably a sensible change (raising the personal allowance) and raising the tax on higher earners. However, the higher rate salary threshold hasn't changed significantly for as long as I can remember; the threshold was something like £41k is 2008. Gotta love fiscal drag!

I guess wage rate inflation hasnt done much since 2008 either though!

Share this post


Link to post
Share on other sites

Your taxable income is net of pension contributions so the actual threshold at which one would pay higher rate tax might be closer to £45k for many people

many people?....the top 5%

Share this post


Link to post
Share on other sites

Between £50 and 60k there is effectively a higher rate again due to child benefit being removed - about 60% effective tax rate for 2 kids

And between £100k and 120k is hits over 60% due to the personal allowance claw back.

I still don't get why we have all these sudden steps in tax. I do think the system is designed to keep the middle class and affluent middle class in their place, and keep them from nipping at the heals of those with inherited money or wealth above say £5m.

I personally think we should have a 2% wealth tax on wealth over £3m, with severe penalties (full confiscation on something) for anyone hiding wealth overseas or trying to deny residence.

Share this post


Link to post
Share on other sites

Your taxable income is net of pension contributions so the actual threshold at which one would pay higher rate tax might be closer to £45k for many people

seems a bargain compared to here, that 45K GBP would be income taxes of under 10% (ground up). ON the other side theres a 50% LVT

Edited by Maria Gorski

Share this post


Link to post
Share on other sites

Does anyone have any idea what the optimal Gross earnings amount is for a family of four (2x student loans) ?

Is it worth both working or just one?

From the impression I got around here that it is not really worth working over 30 hours per week and claiming tax credits?

Share this post


Link to post
Share on other sites

I know...own a three bed house and have four people living in it earning £9440 each....two or more can share the car to get them to work....less is more. ;)

Share this post


Link to post
Share on other sites

Between £50 and 60k there is effectively a higher rate again due to child benefit being removed - about 60% effective tax rate for 2 kids

And between £100k and 120k is hits over 60% due to the personal allowance claw back.

I still don't get why we have all these sudden steps in tax. I do think the system is designed to keep the middle class and affluent middle class in their place, and keep them from nipping at the heals of those with inherited money or wealth above say £5m.

I personally think we should have a 2% wealth tax on wealth over £3m, with severe penalties (full confiscation on something) for anyone hiding wealth overseas or trying to deny residence.

Yep.

Income taxes are taxes on getting richer, not on being rich. They are designed to discourage people from getting richer, particularly getting richer through work.

They aren't supposed to be 'fair' or economically justifiable or anything like that.

Edited by (Blizzard)

Share this post


Link to post
Share on other sites

Actually it's a deliberate policy. As they raise the personal allowance to 10k they are lowering the higher rate threshold. So that the tax cut doesn't go to "the rich".

You mean like some in private equity paying 10%??

Share this post


Link to post
Share on other sites

I like taxes on 'other people'.

No one likes taxes, which is why they can only be collected through violence, however until such time as we have a civilized society that repudiates theft then the best that can be acheived is well (whatever that means) distributed taxation according to ones productive capacity and genuine abilities. Naturally the first step that is to keep it as simple as possible and minimise them on actual wealth creation as opposed to minimising them on monopoly. A good place to start would be reducing the UKs 12 billion page tax code put in place to assist in evasion and monopoly

Edited by Maria Gorski

Share this post


Link to post
Share on other sites

Yep.

Income taxes are taxes on getting richer, not on being rich. They are designed to discourage people from getting richer, particularly getting richer through work.

They aren't supposed to be 'fair' or economically justifiable or anything like that.

How can anyone get richer when the value of the job that is done is not related in any way to the amount that job is paid.....

Someone who pushes paper and has been paid for pushing the same paper for 30 odd years is paid more, and nobody would notice if it were gone, in fact much money would be saved and overall would benefit more people if it were gone..... than someone who does a better job that is more productively worthwhile and more people would feel an impact if that job no longer existed, in fact more of these jobs are in demand to be done not less.....they just pay less to the people that do them. ;)

Share this post


Link to post
Share on other sites

Is that right? From next year the 40% tax rate begins at 32K salary/income?

But on the other hand, if you buy a house they'll give you a cheap loan.

That's the plan. Make property investment more profitable than working.

Share this post


Link to post
Share on other sites

Correct. For reference, the current threshold is 34370 and the current personal allowance is 8105. This makes the typical salary threshold £42.5k.

This is probably a sensible change (raising the personal allowance) and raising the tax on higher earners. However, the higher rate salary threshold hasn't changed significantly for as long as I can remember; the threshold was something like £41k is 2008. Gotta love fiscal drag!

yes; let's take my money from my children and give it to you as you are so lazy or useless to get a better paid job ...

Edited by Damik

Share this post


Link to post
Share on other sites

many people?....the top 5%

The top 10% of earners are £50k pa and above. It's surprising. An income of £50k will barely buy a 2 up 2 down in the South. That's on 4 x income. In fact many 2 bed homes are £250k and above in Sussex. Homes you can hardly swing a cat in. :(

Share this post


Link to post
Share on other sites

How can anyone get richer when the value of the job that is done is not related in any way to the amount that job is paid.....

Someone who pushes paper and has been paid for pushing the same paper for 30 odd years is paid more, and nobody would notice if it were gone, in fact much money would be saved and overall would benefit more people if it were gone..... than someone who does a better job that is more productively worthwhile and more people would feel an impact if that job no longer existed, in fact more of these jobs are in demand to be done not less.....they just pay less to the people that do them. ;)

Sure, but that's a different issue. Economic incentives are screwed up all over the place.

Still, I hate the characterisation of an income tax as being in some sense fair or a manifestation of 'from each according to his means'. It isn't.

Share this post


Link to post
Share on other sites

yes; let's take my money from my children and give it to you as you are so lazy or useless to get a better paid job ...

Your money? Rather depends where it comes from doesn't it?

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   224 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.