Incensed again

bilbo51

Zelazny wrote: »

In other words, for every £100 you earn the company, the government takes £40.25.

So the actual basic tax rate is 40.25/100 = 40.25%

And then there's VAT...

Zelazny

bilbo51 wrote: »

And then there's VAT...

I was tempted to add that in, but I didn't want to alarm anyone :-)

It gets worse if you spend it on something that attracts taxes of it's own, like fuel, cigarettes or alcohol.

A pint of beer from a pub has a rate of about 25% on (VAT and alcohol duty), so if you spent all of your £59.75 on beer, almost £15 of it would go to the government. So the marginal rate for beer is about 55% for a basic rate taxpayer.

Petrol has a rate of about 60% (based on http://www.petrolprices.com/the-price-of-fuel.html) so of your £59.75, the government would get about £36, giving a marginal rate for petrol of 76% (still for a basic rate taxpayer).

For cigarettes the tax take can be as high as 88% (according to http://www.telegraph.co.uk/finance/budget/8401996/Budget-2011-7-pack-of-cigarettes.html), meaning that of the £59.75, the government would get £52.58. This gives a marginal tax rate of 93%.

So if you want to get £7 worth of cigarettes, it will cost your company £100.

I can see cigarettes and beer being viewed as luxuries to a certain extent (although the tax take still seems a little high) but fuel is a necessity to a lot of people. I think we should make people aware of the phenomenal amounts of money that the government is taking from us.