Is it good to be high tax payer

sarah_id1

Some people earn more and pay more taxes. But what does that mean in terms of treatment from governing bodies like Council, HMRC etc.

A and B are out of work aged 45 and lost their job::
A working in last 15 years payed £10K to £15X tax + NI per year
B working in last 15 years payed £2K to £3X tax + NI per year

A and B are aged 65 and retired::
A working in last 30 years payed £10K to £15X tax + NI per year
B working in last 30 years payed £2K to £3X tax + NI per year

In both the cases would A get treated differently than B in terms of benefits, pension etc?

patanne

Why would they? We are all just account numbers to them. As long as we pay what is due, then that is all they are rightly concerned with and not about how important we see ourselves. The best concession you are likely to get is a pensioner given slightly longer to pay an overdue amount due to the possibly lower income & the possible bad press.

Delphina

No, actually you might find that you will be treated worse than someone who pays no tax, especially by HMRC! Whether that is a coincidence or not, I don't care to know.

Why do you think paying high tax and usually subsequently getting 0 benefit is a privilege? I don't! I don't even get road maintenance, street lights or wheely bin but that is another story!

BTW, I am not rich. I earn OK but there are times that I need help but I do not get any and it makes me feel TRULY privileged. LOL

grey_gym_sock

tax is tax; you don't normally get anything for paying it. why would you expect to?

sarah_id1

I maybe wrong, I understood that higher tax payer get higher state pension after retirement.

[Deleted User]

sarah_id1 wrote: »

I maybe wrong, I understood that higher tax payer get higher state pension after retirement.

Nope.

You could argue that those that earn more and pay more tax have more opportunity to invest in their own pensions and what not, and therefore could defer their state pension and get a higher value, but without deferring the state pension is the same for everyone if they have the maximum contributions (which isn't tied to the amount you pay, but the length of time you've paid in for).

A person earning £10,000 is only treated differently to a person earning £100,000 when it comes to means tested benefits.

http://www.bbc.co.uk/news/business-11619379

le_loup

You are wrong.

Delphina

sarah_id1 wrote: »

I maybe wrong, I understood that higher tax payer get higher state pension after retirement.

No, the new rules give flat rate State Pension providing you meet the min requirements. NI contributions give you State Pension not tax.

I don't think deferring is worthwhile anymore. I cannot remember the exact reasons. Maybe this change only applies to new State Pension.

Believe me, pension contribution relief is worse than it sounds, IMHO:

- you are relying on pension funds to make profits. What a joke! I have done so much better with my shares ISA than my pension funds!
- you usually end up paying tax when you start receiving pension income anyway.

Delphina

grey_gym_sock wrote: »

tax is tax; you don't normally get anything for paying it. why would you expect to?

Don't you expect some of your tax to fix your roads once in a while, rather than having to pay from your own pocket? Believe me, my road is worse than most roads in most developing countries I have been to. And soon the bridge needs fixing but the Local Council keeps forgetting to do it. Am I going to have to pay for that, too? Don't you feel frustrated if you pay £5K plus each year in NI and cannot get JSA when you are really hard up, because you are self employed? And you see some people, who don't work or work much although they can, get benefits? I am not a Daily Mail reader or UKIP supporter. But I am just fed up.

Don't make me feel that I am greedy when I am not, please!

thenudeone

Delphina wrote: »

Believe me, pension contribution relief is worse than it sounds, IMHO:

- you are relying on pension funds to make profits. What a joke! I have done so much better with my shares ISA than my pension funds!

A pension is just a tax wrapper. You can invest a pension's money in shares, funds, bonds, commercial property and even unlisted companies (with restrictions).

So it's wrong to say - pensions are rubbish when what you mean is the funds that the pension chose to invest in are rubbish

Delphina wrote: »

- you usually end up paying tax when you start receiving pension income anyway.

But as a 40%, taxpayer you can get tax relief at 40% on contributions, whereas most people don't pay more than 20% on pension income (and the first £9440 is tax free anyway)

grey_gym_sock

under the proposed new state pension, it will be a flat rate (if you have the full number of years qualifying). under the existing system, the basic state pension is flat, but there is also S2P (formerly SERPS), which does give a little more to higher earners.

Delphina wrote: »

Don't you expect some of your tax to fix your roads once in a while, rather than having to pay from your own pocket?

so you live on a private road? well, that's a rather specific situation. however, if you live in this country, you certainly benefit from public spending in other ways (including maintenance of the rest of the road system), though not in 1 specific way.

my point is that, while everybody both pays some tax and gets some benefit from the public spending, you wouldn't expect the amount you pay to have much (if any) relation to the amount you get back.

if you're unhappy with how the council (or any part of government) spend public money, then do make a fuss about it - this is constructive, as it pushes them to improve. but this has nothing to do with how much tax you pay.