Page 1 of How much tax would you pay if you earned £100k?
I don't think any of us earn £100k, but it makes the maths simple, and this is easier than if you earn £80k and think you aren't well off.
Anyway, let's pretend we may all one day earn £100k a year.
The top rate of tax is 40%, and applies to people who earn more than £50k. If you earn this, how much tax do you pay? (also pretending you aren't tax dodging or sharing an accountant with Jimmy Carr)
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I include NI in tax and therefore it should be around £33k...
...which is actually more than I earn.
This item was edited on Monday, 25th November 2019, 22:06
That’s a ’glass is half empty’ question.
It it should be how much do you have left to spend. If I earned 100k and had 60k to spend when all is said and done, I’d have a grin on my face.
If I’d just given 40k to the taxman I’d be seething.
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I remember on 8 out of 10 Cats Sean Locke ripped into Jimmy Carr, and Jimmy Carr admitted to having no excuse when Locke said how that tax pays for nhs etc.
However, I'll be honest, if some-one said to me there was a legal way to not lose 1/4 of my wages every month I'd be interested, 1/2 of my wages, the devil on one shoulder would be winning over angel on the other :(
Worth remembering the George Harrison wrote Taxman on finding out that he was paying 19s 6d in the pound.
That's about 97.5p in pretend money.
What's the right answer then cos I'm never likely to find out by looking at a payslip.
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I am not young enough to know everything.
I was unwittingly, and for 6 days only in a tax avoidance scheme. So I can see how easy it is to fall into.
It was my first contracting role about 5 years ago, before that I had always been PAYE. My umbrella company was recommended to me by the agency that got me the work, so I just presumed that was how things were done.
They paid me minimum wage for the days I worked, out of the money the employer paid them. Then the umbrella company asked if I wanted a loan, so then I 'loaned' myself the rest of the pay. So that, basically was un-taxable!
2 years ago I had a letter from HMRC telling me I had used a tax avoidance scheme and that I would have to pay back the tax I missed. Luckily this was only for 6 days work and a small amount.
However, I have seen in the news recently the amount of contractors that have been doing these schemes (as told to by these companies) (and legitimate in the eyes of HMRC at the time) some have been left with bills in 10s of thousands, I even read about a couple who had done these schemes for 10-20 years and owe £100k +, one poor soul even took his own life because of it.
Needless to say when contracting now I am self-employed and have an accountant!
I find it kind of funny, I find it kind of sad
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a friend of mine is going to go back to "normal" work after contracting for a couple of years as it's not as lucrative as it was.
On pure income tax, aye, but not if you include NI - and why wouldn't you?
Si Wooldridge says...
"On pure income tax, aye"
We call NI a tax, but the government calls it a contribution. It's compulsory for most people, but you feel better knowing it's not a tax right? :)
The answer (correctly stated by SJ) is nicely explained here:
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