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

setmefree2

The_One_Who wrote: »

I take it the other 9p is coming from the student loan? If you are earning £15,001 you'll pay back 9p per year, not per pound earned. That's rather misleading. It's also rather misleading to say that someone will pay 32p for every pound earned in tax.

I'm not trying to be misleading so I'll try again...

For every £1 you earn per year over £15k you will have to give HMRC 20p for income tax, 12p NI and 9p student loan. You get to keep 59p.

For every £1 I earn - as someone who earns say £149k - I get to keep 58p, 'cos I give HMRC 40p income tax, 2p NI and I don't pay for a SL.


Now that's ok if you are someone who believes in a flat tax rate.... do you believe in a flat tax rate?

Oldernotwiser

setmefree2 wrote: »

I'm not trying to be misleading so I'll try again...

For every £1 you earn per year over £15k you will have to give HMRC 20p for income tax, 12p NI and 9p student loan. You get to keep 59p.

For every £1 I earn - as someone who earns say £149k - I get to keep 58p, 'cos I give HMRC 40p income tax, 2p NI and I don't pay for a SL.


Now that's ok if you are someone who believes in a flat tax rate....

As an accountant you're obviously adept at juggling with figures, both in theory and in practice. I don't think that, IRL, those figures have any relevance, however accurate they are.

By the way, I don't think anyone has any problems understanding what you're saying.;)

setmefree2

But my main point regarding this thread is this. What sort of demotivating effect will paying 41p in the £1 at such a low threshold have on 2012 students earning potential? And how do you quantify that when looking at the impact of paying Tuition Fees upfront?

Do you think it'll have no effect whatsoever or do you think some people will think I can't bothered pushing myself for that extra quid 'cos the tax man's going to take most of it anyways?

As a parent I imagine my kids toiling away in their 30s with a young family (expensive) and a big mortgage trying to earn a little more to make the families life a bit easier but they can't 'cos the tax man has them by the nuts.... that in a nut shell is my worry about SLs.

Soubrette

setmefree2 wrote: »

But my main point regarding this thread is this. What sort of demotivating effect will paying 41p in the £1 at such a low threshold have on 2012 students earning potential? And how do you quantify that when looking at the impact of paying Tuition Fees upfront?

Do you think it'll have no effect whatsoever or do you think some people will think I can't bothered pushing myself for that extra quid 'cos the tax man's going to take most of it anyways?

One of my friends works for a bank and the ex-students are the most reluctant to do overtime for precisely this reason, they feel their overtime payments are mostly swallowed up by loan repayments.

Of course these figures cannot be true but unfortunately perception rather than fact sways people behaviour.

The_One_Who

setmefree2 wrote: »

Now that's ok if you are someone who believes in a flat tax rate.... do you believe in a flat tax rate?

No, I don't. But I also don't believe in trying to scare prospective students who by and large have no option but to take a loan unless they want to take a few (or a lot) years out to work and save. Tell them what they will actually be paying in tax, and tell them the different tax bands. I don't know about you, but when I look at a salary, I really just want to know how much I'll be getting in take-home pay. I don't want to be thinking of how much tax I'll be paying per pound.

A slightly different example. I can look at my commuting fees in two ways: I work the first hour of each day in order to pay for my transport to and from work; or I work all week and earn effectively nothing on the Friday because it is all going to pay for transport. One is a better (or at least less depressing) way of looking at things.

setmefree2

Oldernotwiser wrote: »

No it isn't. Everybody who studies full time at university level will pay it.

My M-I-L did a degree at 65, she didn't pay a bean because she's too old to earn any money. In fact if you are going to do a degree you might as well do it when you are old and you'll never have to pay a penny.

The_One_Who

setmefree2 wrote: »

My M-I-L did a degree at 65, she didn't pay a bean because she's too old to earn any money. In fact if you are going to do a degree you might as well do it when you are old and you'll never have to pay a penny.

That's great if your chosen career doesn't require a degree, or if you don't need a degree to progress up the career ladder. Unfortunately, things aren't quite that simple now.

setmefree2

Oldernotwiser wrote: »

By the way, I don't think anyone has any problems understanding what you're saying.;)

Good, we're all on the same page then

Soubrette

The_One_Who wrote: »

No, I don't. But I also don't believe in trying to scare prospective students who by and large have no option but to take a loan unless they want to take a few years out to work and save. Tell them what they will actually be paying in tax, and tell them the different tax bands. I don't know about you, but when I look at a salary, I really just want to know how much I'll be getting in take-home pay. I don't want to be thinking of how much tax I'll be paying per pound.

A slightly different example. I can look at my commuting fees in two ways: I work the first hour of each day in order to pay for my transport to and from work; or I work all week and earn effectively nothing on the Friday because it is all going to pay for transport. One is a better (or at least less depressing) way of looking at things.

That's your choice. I, however, want to make sure that I am very clear that this is an outrageous and unfair loan or tax whichever way you choose to spin it.

I would vote for any party that promises to abolishe it (except the BNP).

I am not someone who feels that students should make no contribution but an £80,000 loan or a 9% tax increase is too much imo. A £20,000 loan or a 2-3% increase in tax - fair enough with the proviso that the party bringing it in has the political guts to only admit our brightest and best to university rather than trying to herd in as many people as possible so the youth unemployment figures can be fudged.

Perhaps we should have a system like the US - bright kids get in on bursary, grants and charities - thick rich kids pay through the nose.

setmefree2

The_One_Who wrote: »

A slightly different example. I can look at my commuting fees in two ways: I work the first hour of each day in order to pay for my transport to and from work; or I work all week and earn effectively nothing on the Friday because it is all going to pay for transport. One is a better (or at least less depressing) way of looking at things.

Indeed. Another example, if you earn £15k say and I earn £149k say and we both work an extra hour of overtime I get to keep the same amount of money as you do. That's a flat tax in action and that is the SL system in action.