the cost vs benefit of work

Mistermeaner

Mistermeaner has been v busy the last few weeks and was thinking today about the cost and benefits of all this business

The most obvious cost is time, and possibly a bit of stress. Obvious benefit is getting paid and I think we all need some form of structure and challenge in our lives.

More subtlety though I think there's lots of other not so obvious costs (and benefits).... perhaps these become most pronounced after retirement when the differences become clear.

Costs

- buying work clothes
- grooming.... that perhaps wouldn't otherwise do
- convenience items.... a function of having traded time but a double cost? E.g. ready meals
- car / transport
- extra stuff around transport... eg aa membership because you 'can't afford to be off the road'
- paid childcare
- paying someone else to do stuff you would do yourself with more time (cleaning etc)
- lack of time to research purchases properly (I had to buy a new car this weekend, went to one place, didn't shop around)
- doing stuff at premium times.... Fri travel, peak everything, no mid week deals(Orange weds etc)
- lack of time and energy to sort personal financial stuff out
- inefficiency of buffers required.... eg emergency cash fund as benefit safety nets don't support workers

Bit glum that so on the benefits...

- social interaction. If you like your colleagues and don't ave friends
- reduced spending to fill the empty hours (can't remember last time I went out in the week)
- self respect and well being
- ummm


Don't know if I have a point. Just musing.

Should some work expenses e tax deductible as a paye? One man band Ltd seem doubly advantaged with dividend efficiency and deductibles. My mates company spends alot 'entertaining clients'

Generali

Unless the rules have changed regarding client entertainment your mate might want to watch out!

In Aus we have the same rules for self employed and PAYE staff. I get to pay some of my bills tax free (for example my internet which I need for work) and I can get some tax benefits if I buy a car partly to get me to work especially if I have a job like a salesman or an auditor which requires me to work in multiple locations.

We also don't have this rather silly split in income tax between NI and PAYG so there is no tax advantage to a self employed person taking income as a dividend.

The main difference between the tax treatments of the two is that self employed people get to deduct expenses as they go whereas I get a tax refund at year end.

Thrugelmir

Mistermeaner wrote: »

My mates company spends alot 'entertaining clients'

That's not tax deductible.

Nor can you recover VAT.

Mistermeaner

I didn't say how he entertains them......

Nebulous2

I worked for a small third sector organisation, which went through several bad patches whilst I was there. One small part of my job was helping people apply for benefits and at a particularly gloomy point I decided to calculate what I would get if I was made redundant.

I was surprised to discover that my income would have reduced by over £600 a month but my outgoings would have gone down by over £1000.

Thankfully it never came to that, but it certainly left me feeling less worried about money when we hit any more rocky patches!

michaels

Every time the budget shrinks our net income by thousands of pounds it becomes harder to see the benefits of getting up at silly o'clock in the morning....

For example child benefit -2.4k, 6% of net
Double taxation of pensions for higher rate taxpayers - ?5.1k, 15% of net

Potential total 7.5k of 40k net lost in just 2 parliaments....

princeofpounds

Potential total 7.5k of 40k net lost in just 2 parliaments....

It's ok, just think about all the pensioners you are supporting, and how you benefitted from all that generous public spending during the Brown years.

Generali

michaels wrote: »

Every time the budget shrinks our net income by thousands of pounds it becomes harder to see the benefits of getting up at silly o'clock in the morning....

For example child benefit -2.4k, 6% of net
Double taxation of pensions for higher rate taxpayers - ?5.1k, 15% of net

Potential total 7.5k of 40k net lost in just 2 parliaments....

Given the extent to which you game the system you can hardly be surprised when the political risk you're taking materialises.

I have some sympathy with your plight but this is always going to be on the cards.

duchy

I didn't realize how expensive going to work is until I took a job based at home.

I don't need business dress as all my client interaction is by phone
I don't pay fares/petrol/parking
I don't spend money in Pret on lunch - I just go to my fridge
I'm not tempted by Costa on my way to work
Had I needed childcare my costs would be lower as no travel time to pay for (not relevant in my case although a big factor in working from home was to avoid the mad dash to leave work and get home before my disabled son was dropped off by school transport)
Grooming ? I don't spend any less working from home I still look decent regardless

I also get an allowance of about £20 a month from the taxman as a PAYE employee working at home.

With no commuting I have more time to home cook - I can prepare for example a casserole in my lunch break and it cooks all afternoon ready for the evening meal -so less temptation to buy takeaways because I get home late to tired to be bothered cooking.

Utility bills -I don't notice much difference as my partner works shifts and if it's just me at home I tend to only heat the office and not the rest of the house

Overtime- I tend to do more - It's all paid and not having to drag myself into work physically to do it -means doing a few extra hours and then as soon as I get up from my desk I'm back in my real life again makes it far more do-able and appealing.

The dreaded collection envelope for endless, births, deaths and marriages never turns up on my desk !!

I have looked at a few better paid jobs but when I've done the maths and calculated the real costs of leaving home to work the nett financial advantage is usually non existent.

It's quite startling how much many of us do "pay to work"

Carl31

i think Humans need the mental stimulation of work to remain sane and motivated

Look at how long term unemployed can end up, unmotivated in many areas, can be construed as lazy, but if its reversed they often end up employable

I don't think money can buy that really.

duchy

Carl31 wrote: »

i think Humans need the mental stimulation of work to remain sane and motivated

Look at how long term unemployed can end up, unmotivated in many areas, can be construed as lazy, but if its reversed they often end up employable

I don't think money can buy that really.

I think that depends both on personality - some people are self starters regardless and also on the job itself - some jobs (or maybe some employers)can be incredibly de-motivating.

I do believe in the dignity of employment and as retirement raises its head in the distance have realized that I'll probably never not work as even retired I'll want projects to give me structure and to keep me busy - Working is too deeply ingrained - whether that is a good thing or not is debatable !!