Politics, politics, politics (so long and thanks for all the fish)

[LutonSpurs]

Nearly 700,000 Brits in a 'tax trap' could lose 65p per pound on some of their salary in a brutal Rachel Reeves tax hike. Workers earning between £100,000 and £125,140 could lose 65% of their salary between those rates if Labour increases income tax, according to analysis.

This means if a Brit earning a salary of £100,000 receives a £10,000 pay rise, a huge £6,500 would be lost to income tax and National Insurance, according to analysis by Wealth management firm Quilter. It is based on the assumption that Reeves may increase income tax by 2p, breaking Labour's manifesto pledge, and cut National Insurance contributions by 2p, which may be limited to those earning below £50,270.

The analysis expects that workers caught between the thresholds will pay a 63% effective rate in income tax, up from 60%, and 2% in National Insurance contributions.

Shaun Moore of Quilter said it would place an "even greater burden" on impacted Brits, and make "a perverse part of our tax system even worse", reports The Telegraph.

The 'trap' occurs when the 40% higher tax rate is applicable on the portion of Brits' income above £50,270. But the real problem starts once your income goes over £100,000 as at that point the tax-free allowance of £12,570 starts to disappear.

So for every £2 earned above £100,000, a worker loses £1 of their tax-free personal allowance. This creates a hidden tax rate of about 60% on earnings between £100,000 and £125,140.

Mr Moore added: "The £100,000 cliff-edge threshold, in place now for over a decade, needs to be reviewed.

"The tax burden on this already penalised cohort of workers becomes even greater at a time when tax thresholds are frozen and more is being asked of them.

"Many earning £100,000 will not necessarily feel rich, but such a move will see the Government consider them to be. With reductions in childcare benefits also kicking in at this level, it simply makes the situation worse."

So people on 6 figure salaries will pay £1k or so more on tax each year. Booh effin hoo

 

[kb 1984]

BBC News - Reeves suggests benefit limits on larger families to be lifted

Rachel Reeves suggests family benefit limits will be lifted

The chancellor tells the BBC children in bigger families should not be "penalised" by the welfare system.

www.bbc.com

It isn't fair that those with larger families are penalised "through no fault of their own". Didn't realise kids were randomly bestoed on people by chance. I suppose its pretty unlucky if you happen to have six kids and don't work and i guess its only fair that i have to pay more taxes so that they all get looked after and put up in the size of house i could only dream of affording.

And yes, this is precisely the kind of ire from the working electorate that led to the child benefit cap being imposed in the first place! And the cycle of incompetence repeats ...

Sorry but there are lots of reasons why people are suddenly out of work. Both my parents worked bloody hard until one day my mother got an infection which attacked her immune system. She ended up on the disability pension & spent the rest of her life in a wheelchair. She had to prove every fudging year that she couldn't work. So before you start judging people take a minute & think maybe I am the lucky one I can actually work. By the way my parents had 5 kids