Do You Think Income Tax Banding is Fair?

gorgeyetsun

A simple method to help families who have a SAHP is to allow couples to share tax allowances. One parent earning £60k would then benefit from the other parents tax free allowance, and the 20% tax threshold.

Lokolo

N1AK wrote: »

Nice try to dismiss his point but he's absolutely right. Your take home pay is, effectively, the same as mine, and I pay into a pension and am paying off a student loan and don't pay higher rate tax so it's hardly unreasonable to question your statement when it didn't add up.

So as the person earning £42k would have around £1k left over (based on your example) and would be getting child benefit the situation isn't as dire as your flawed example implies.

My example wasn't flawed.

I said it was around £42k, not £42k.

I gave my monthly budget. I also gave my take home.

I didn't say EXACTLY on £42k how much a family of 4 could or not afford. Just as I said I live in a 2 bed flat which would not be that suitable for a family of 4.

My take home is £2185. My salary is £40k, after a couple of tax allowable deductions (share scheme - £150, charity - £50 and pension £66, I get a very good employer contribution - not the norm), tax, student loan (£170) that is my take home.

Hardly near the £1000 you keep claiming I would have. Even on an extra £2k a year, after the deductions I would only be ~£100 better. So thats £2300. Still not £1000.

There isn't going to be a perfect example. As I said, I only live in a 2 bed flat. I haven't taken into account clothing (inc my own), extra groceries, extra travel costs, extra child schooling costs, extra housing (utilities + appropriate sized property).

ukcarper

Your take home pay is £2185 the list outgoings is £1492 so you would have £693 + £250 child benefit = £943.

Lokolo

ukcarper wrote: »

Your take home pay is £2185 the list outgoings is £1492 so you would have £693 + £250 child benefit = £943.

I thought you said £1000?

I can't give any more figures as I have no idea how much it would cost for 3 extra people. If you really are determined, give me some ideas. I think it would be very tight though. Do-able, but very tight.

gorgeyetsun

If you can't afford to have '3 extra people' on your wage then perhaps you shouldn't have kids, which would of course mean your partner could carry on working?

Problem solved.

ukcarper

Lokolo wrote: »

I thought you said £1000?

I can't give any more figures as I have no idea how much it would cost for 3 extra people. If you really are determined, give me some ideas.

These are your figures before I used take home pay for someone on £42k with no pension savings that £1000 did not include child benefit.

The fact remains that 50% of people in the south east earn less than £30k and survive. I earned the equivalent of that when I had kids and survived ok although my wife did have a small part time job.

grizzly1911

Fella wrote: »

£42k is not a bad wage but should not be the higher income tax threshold IMO. The higher rate used to be for the people actually on high wages. Fiscal drag etc have gradually pulled more & more people into that band.

Fella wrote: »

I don't know how it equates to as % of people but a fag-packet finger in the air stab at what level it should be at would be more like £60k minimum IMO.

I have just been doing some digging because I was thinking along your lines.

Salary 50K for example.


Tax Y/E 2007

PA 5035
Low Rate 10% 2150
Basic Rate 22% 2151-33300
High Rate 40% 33301+

Tax payable £11734 (23.4%)

Tax Y/E 2014

PA 9440
Basic Rate 20% 0- 32110
Higher Rate 40-% 32111+

Tax payable £9802 (19.6%)

Allowing for modest salary inflation to match some RPI (not saying it has been received) to say £60K

Tax payable £13802 (23%)

Appreciate NI has increased between the dates by 1% and VAT by 2.5%.

http://www.contractorcalculator.co.uk/TaxTables2006.aspx.

:question::think: What have I missed.:question:

TrickyDicky101

grizzly1911 wrote: »

Try looking at your P60 each year.

That's not the point though - I could look at my monthly payslips after all.

If all of us had to pay our taxes out of the money in our bank accounts (rather than having it taken from our pay before it gets anywhere near accounts under our control) it might make all of us think harder about what our taxes pay for and what level they are set at.

I would hope everyone would agree that would be a good thing, no?

N1AK

Lokolo wrote: »

My example wasn't flawed.

I said it was around £42k, not £42k.

I gave my monthly budget. I also gave my take home.

I didn't say EXACTLY on £42k how much a family of 4 could or not afford. Just as I said I live in a 2 bed flat which would not be that suitable for a family of 4.

My take home is £2185. My salary is £40k, after a couple of tax allowable deductions (share scheme - £150, charity - £50 and pension £66, I get a very good employer contribution - not the norm), tax, student loan (£170) that is my take home.

Hardly near the £1000 you keep claiming I would have. Even on an extra £2k a year, after the deductions I would only be ~£100 better. So thats £2300. Still not £1000.

You crack me up. You still are either completely oblivious to or in denial about how £370 of deductions you didn't mention (loan, charity, shares) makes your figures dodgy :rotfl:

Your monthly budget didn't include shares and a loan. It'd be like someone claiming they can afford to buy new sportscars on £20k pa then when some one queries it saying it wasn't misleading; they just didn't mention that Daddy gives them £5k a month to help out.

Lokolo

N1AK wrote: »

You crack me up. You still are either completely oblivious to or in denial about how £370 of deductions you didn't mention (loan, charity, shares) makes your figures dodgy :rotfl:

Your monthly budget didn't include shares and a loan. It'd be like someone claiming they can afford to buy new sportscars on £20k pa then when some one queries it saying it wasn't misleading; they just didn't mention that Daddy gives them £5k a month to help out.

I don't see how its dodgy at all. They are all resonable figures to deduct. 50% of people now go to university, so its a resonable assumption that if you are earning £40k, you are likely to have student loan repayments.

Another assumption is pension - I guess I shouldn't bother paying into a pension because it makes my figures look dodgy!

It is also hardly £570 of deductions, at what point did I say I was on £42k!? I didn't (I said around) and even after, said I was on £40k.

My monthly budget DID include the deductions. After all I made my budget based on MY budget with MY takehome.

http://forums.moneysavingexpert.com/showpost.php?p=58946383&postcount=43

This states that I have outgoings of £1500. My take home is £2180/85, so £680/85 rather than £600.

At what point have I said anything thats makes my figures look completely dodgy!?