Loans better than overtime?

Legacy_user

When I do any overtime I lose about 1/3 in tax and NI, and if child tax credits are considered (41p in the £) its like a 73% tax upfront!
Surely a personal load paid back quickly is a cheaper source of quick cash? (Weddings, investment, etc), granted you have to pay back the original, but as far as making our work go the furthest, loans are cheaper?

[Deleted User]

No. Clearly not.

System

How come zx81? I know loans cost money, but they could be more tax efficient as a stopgap and the interest could be cheaper than the tax?

torbrex

MatthewAinsworth wrote: »

When I do any overtime I lose about 1/3 in tax and NI, and if child tax credits are considered (41p in the £) its like a 73% tax upfront!
Surely a personal load paid back quickly is a cheaper source of quick cash? (Weddings, investment, etc), granted you have to pay back the original, but as far as making our work go the furthest, loans are cheaper?

I'm sorry but WHAT??????????

System

Just that the tax on overtime is a higher % and demanded upfront, rather than over time. Loan would need repaying quickly though

[Deleted User]

I don't even know where to start.

One is earning money, the other is borrowing money and then paying more back. It's not an either or question.

Why not stop working altogether, pay no tax at all, and just get lots of loans?

torbrex

MatthewAinsworth wrote: »

Just that the tax on overtime is a higher % and demanded upfront, rather than over time. Loan would need repaying quickly though

Borrow £100 pay £10 interest = £110 to pay back

Earn £100 pay £73 tax = £27 profit

What are your sums working out at?

System

If its a one off though like a wedding, and you can repay the loan using lower taxes income and tax credits? Earned money would need to be put to a use that more than paid the tax, and that'd be hard to do, like working more to repay a mortgage would leave you paying more tax than the interest would ever be, and working for essentially a lower rate of pay

[Deleted User]

Working more to pay off a mortgage means you pay less interest and get richer.

Am I on 'Candid Camera'?

torbrex

MatthewAinsworth wrote: »

If its a one off though like a wedding, and you can repay the loan using lower taxes income and tax credits? Earned money would need to be put to a use that more than paid the tax, and that'd be hard to do, like working more to repay a mortgage would leave you paying more tax than the interest would ever be, and working for essentially a lower rate of pay

You carry on then, I will go and stick my head in a bucket of water as that makes more sense to me.

torbrex

Deleted_User wrote: »

Working more to pay off a mortgage means you pay less interest and get richer.

Am I on 'Candid Camera'?

I worked 4 jobs at one time and paid off my mortgage early, I'm now semi-retired.