'Don't pay your kids tuition fees upfront' Discussion Area

setmefree2

Oldernotwiser wrote: »

They can marry, have children and fight for their country and they'll normally be 18 within a couple of months.

Yup. But they can't go to Uni without allowing HMRC the right to dip in to their salary every month and take 41% of every marginal £ they earn...

setmefree2

Oldernotwiser wrote: »

Nobody earns 60 p in the pound on a £15 K or £21K salary!

They do at the margin. Once you earn £15k under the old system (so I was told on this thread) you pay 20% income tax, 12% NI and 9% SL.

Under the 2012 system after £21k a gradaute will be paying 20% income tax, 12% NI and 9% SL - 41% - on each £1 they earn.

At least !!!!!! Turpin wore a mask!!!!

The_One_Who

setmefree2 wrote: »

They do at the margin. Once you earn £15k under the old system (so I was told on this thread) you pay 20% income tax, 12% NI and 9% SL.

Under the 2012 system after £21k a gradaute will be paying 20% income tax, 12% NI and 9% SL - 41% - on each £1 they earn.

At least !!!!!! Turpin wore a mask!!!!

If you earn exactly £15,000 you won't be paying back your loan at all. You only pay 9% of anything over the £15,000.

setmefree2

The_One_Who wrote: »

How would you change it? How would you ensure that higher education is still accessible to all, whilst still actually managing to pay for the costs that higher education entails? Where would the money come from?

I'd scrap it all. I can't imagine how much it costs to collect all these "loans". It must be a bureaucratic nightmare and it makes a complete joke out of any pretence that the UK tax system has of being progressive.

Higher education should be funded out of general taxation. Anyone going into the next election saying that (and meaning it) will get my vote.

setmefree2

The_One_Who wrote: »

If you earn exactly £15,000 you won't be paying back your loan at all. You only pay 9% of anything over the £15,000.

Now you're being pedantic

The next £1 over £15k is "taxed" at 41%, that's what I meant....

....so I was told on this thread...

The_One_Who

setmefree2 wrote: »

I'd scrap it all. I can't imagine how much it costs to collect all these "loans". It must be a bureaucratic nightmare and it makes a complete joke out of any pretence that the UK tax system has of being progressive.

Higher education should be funded out of general taxation. Anyone going into the next election saying that (and meaning it) will get my vote.

Have you any idea how much higher education costs? Especially with the numbers of students there are nowadays? How will students afford to live if they can't get loans, give them all grants of over £5,000?!

You'd be willing for your taxes to skyrocket to fund this, would you?

setmefree2 wrote: »

Now you're being pedantic

The next £1 over £15k is "taxed" at 41%, that's what I meant....

....so I was told on this thread...

Hardly pedantic. If you earn £15,001 then you'll be paying back 9p per year on your student loan. You could find that by walking down a high street and picking up the pennies.

I'm not quite sure where you are getting your figures from, but a person earning £15,001 will pay about 16% (£2438.41) in tax. Unless my figures are totally wrong, which is quite possible!

setmefree2

The_One_Who wrote: »

Have you any idea how much higher education costs? Especially with the numbers of students there are nowadays? How will students afford to live if they can't get loans, give them all grants of over £5,000?!

You'd be willing for your taxes to skyrocket to fund this, would you?

Would they sky rocket? First you'd save all that money on getting rid of the SLC. Then you'd save all the money from paying the tax collectors at HMRC to collect the "loans".

I would rather pay my fair wack of tax than burden a younger generation in this way. My son when he graduates (if he earns £21k plus £1 ) will be paying the same marginal "tax" as someone earning £149k - how can that be right?

setmefree2

The_One_Who wrote: »

Hardly pedantic. If you earn £15,001 then you'll be paying back 9p per year on your student loan. You could find that by walking down a high street and picking up the pennies.

You will also have to find 20p to pay your income tax and another 12p to pay your NI contributions. So you have to find 41p for each £1 you earn.

If I earn £149k and am older and don't have a student loan (which sadly I am), I have to find 40p to pay income tax and 2p to pay my NI contribution, 42p.

But you earn £15k and I earn £149k.....

Do you think that's fair?

The_One_Who

setmefree2 wrote: »

Would they sky rocket? First you'd save all that money on getting rid of the SLC. Then you'd save all the money from paying the tax collectors at HMRC to collect the "loans".

The money will have to come from somewhere. And if you are wanting it to come from tax then they will either have to increase, or something will have to suffer.

I would rather pay my fair wack of tax than burden a younger generation in this way. My son when he graduates (if he earns £21k plus £1 ) will be paying the same marginal "tax" as someone earning £149k - how can that be right?

Please explain this to me.

Someone earning £21,001 will pay about 23% of that in tax, including the £540ish that will go towards their student loan. Again, my rudimentary calculations could be well off the mark, I admit that taxation is not a strong point of mine.

setmefree2

The_One_Who wrote: »

Please explain this to me.

Someone earning £21,001 will pay about 23% of that in tax, including the £540ish that will go towards their student loan. Again, my rudimentary calculations could be well off the mark, I admit that taxation is not a strong point of mine.

Don't think about what's happening in total, think about what's happening with each marginal £ that's earned.

You may not think the margin matters but it does because a system that taxes too highly at the margin disincentivizes people to work. If working for that extra £1 means that you just end up paying tax and getting very little to keep for yourself then you will be demotivated from working for that extra £1.

imho expecting people to pay 41p on each £1 to HMRC at a salary of £21,001 is too much. It's a burden and I don't think it's right. It's tax by stealth (and a very regressive one at that) and it's only being levied against young people.