Do you know your tax burden for the last tax year?

HAMISH_MCTAVISH

danothy wrote: »

Well I actually recorded all the tax I paid as I paid it this tax year, so you might have to do some actual number crunching.

Hmmmm, OK then, here's a quick back of a (highly taxed) fag packet calculation.

I pay a fair bit more in income tax, BIK and NI than the average earner makes in a year. I think I pay about in alcohol and tobacco duty what the average pensioner gets in state pension a year. And then there's what I pay on VAT, fuel duty, APD, council tax, VED, etc... That's got to be worth at least the earnings of half a dozen young people on zero hours contracts.

So my tax burden is probably roughly equivalent to the total income of a large multigenerational family.... And if you include the taxation on Mrs McT's income and expenditure it's more like the total income of a small clan.

Does that help?

danothy

pathtofreedom wrote: »

How are you tracking this exactly? I use ynab but having to break things down into categories to show vat for clothes or food or lady items, as well as car costs, council tax etc etc all that before I guess the simple ones then of income tax and NI to do that to be 100% accurate must be a mammoth amount of overhead.

For things like gas, electric or different insurances how do you work it out for those, as it wouldn't just be vat I think some might have other taxes rolled in.

I'm not asking to troll I'm just genuinely interested how you worked it out and what was included in the calculations. I guess if you buy a house and pay stamp duty, or have any capital gains in a year that is going to make quite a difference too.

Just a spending diary using gnucash. Split transactions allow you to separate off the tax, and the rates for various things are all available on the internet. Alcohol duty and fuel duty are probably the most complex, as there's vat on the duty. Utilities are fairly simple as they're just lower rate vat. None of the tax on day to day spending is that complicated.

danothy

HAMISH_MCTAVISH wrote: »

Does that help?

Not really, I'm more focusing on taxes paid as a percentage of income, but interesting nevertheless. Curious as to whether or not the so labeled poor really do have a higher tax burden when all taxes are taken into account. I know, for example, how poor I am and how much tax I pay, and it doesn't really line up with what people have been trying to sell me about tax burden.

pathtofreedom

danothy wrote: »

Just a spending diary using gnucash. Split transactions allow you to separate off the tax, and the rates for various things are all available on the internet. Alcohol duty and fuel duty are probably the most complex, as there's vat on the duty. Utilities are fairly simple as they're just lower rate vat. None of the tax on day to day spending is that complicated.

ok so you're not including all the taxes then, such as green taxes in utilities, or breaking down your food etc fully and that you're male and never buy tampons...

Which categories did you include as I can't tell from your picture.

danothy

pathtofreedom wrote: »

ok so you're not including all the taxes then, such as green taxes in utilities, or breaking down your food etc fully and that you're male and never buy tampons...

Which categories did you include as I can't tell from your picture.

I'm including all the taxes I pay, including vat on sanitary products on the occasions that I do buy them. Most food isn't subject to vat, but the ones that are are marked on receipts typically. Also, as I mentioned earlier, I don't buy tobacco, so there's no tobacco duty on the chart.

As I understand the green subsidies in energy bills, that is an obligation on the energy companies to charge and perform certain acts with the money, not a tax, much like the bag charge in supermarkets.

This year I paid income tax, national insurance, vat, student loan (legally classified as a tax apparently), council tax, alcohol duty, fuel duty, television licence (also legally classified as a tax), car tax, and insurance premium tax. My income and spending are not complex.

pathtofreedom

Ok Thanks. I'm not trying to be difficult, just genuinely interested. Maybe I need to start asking for vat receipts in super markets and see what food i can swap to reduce it eg jaffa cakes instead of chocolate etc. Not sure I'd have the time to break it down to log every item and the different rates of vat like you are though.

This is a bit out of date but gives you an idea about the utilities

http://www.bbc.co.uk/news/uk-politics-24646527

thequant

BobQ wrote: »

Or you are on PAYE and unable to avail yourself of many of the options available to self employed etc

Still possible to minimize your tax liability, just takes a bit of intelligence.


But that's the key thing, if it was made easy then everyone would do it and the government would close the loopholes straight away.


Ultimately, tax avoidance is not for the rich, but for the intelligent.

ukcarper

thequant wrote: »

Still possible to minimize your tax liability, just takes a bit of intelligence.


But that's the key thing, if it was made easy then everyone would do it and the government would close the loopholes straight away.


Ultimately, tax avoidance is not for the rich, but for the intelligent.

If you haven't got any money to invest how?

danothy

pathtofreedom wrote: »

Ok Thanks. I'm not trying to be difficult, just genuinely interested. Maybe I need to start asking for vat receipts in super markets and see what food i can swap to reduce it eg jaffa cakes instead of chocolate etc. Not sure I'd have the time to break it down to log every item and the different rates of vat like you are though.

This is a bit out of date but gives you an idea about the utilities

http://www.bbc.co.uk/news/uk-politics-24646527

On a Tesco receipt the products that attract vat have an asterisk next to them. If you just record a shop as a single expenditure rather than each item then it'd still be easy to calculate the total vat and alcohol duty on it and record that number too. Most day to day stuff that isn't zero rated is at the 20% rate. But if you don't record each item how do you know how much you've spent on cheese in the last year? Vital, that kind of information.

The most complicated it gets for me is after a trip to the pub with mates. Different types of alcohol have different duty calculations, and receipts are easy to forget to ask for. The amount and abv of what you're drinking is needed for the calculations too.

I'm also well aware of the green obligations that utility companies charge. They might be referred to as taxes in that article, but to my understanding they are not taxes, in the same way that the bedroom tax is not actually a tax despite what people call it.

N1AK

danothy wrote: »

Last tax year 29.2% of my income went to the government via various taxes. I'm not exactly sure how I feel about that. Did I get off lightly?

Couldn't give it as a proportion of income, however I know that what we pay in NI + Income tax is roughly equivalent to our spending. As we're savers that means it's obviously somewhat less than half our gross income.

As to whether it's getting off lightly or not. I don't feel like I'm paying a disproportionate amount of tax. I earn enough that I shouldn't need to be subsidised by bigger earners, and I don't mind the fact that someone earning much less than me pays less tax.