Income Tax ... and NI

slparry · Post by **slparry** » Wed Nov 20, 2013 11:56 am

Why do we have deductions for both, separate? It's not like the Government ringfence any particular income stream is it? So why don't we just have an income tax?

Herb · Post by **Herb** » Wed Nov 20, 2013 12:01 pm

It harks back to the days when it was ring-fenced. NI was set up as exactly that, and insurance against old age and ill health.

Now it is very much a political thing. Most people look at headline tax and think 20%. Thats not so bad.

Add in everything else, and even relatively modest earners are losing half of their income to the Government, either local or central one way or another.

My personal bugbear is Council Tax. It comes out of income you have already been taxed on and in our area at least represents very poor value for money.

Death and Taxes and all that!!!

The Teutonic Tangerine · Wed Nov 20, 2013 1:13 pm

It's like referring to your annual trip to the post office to buy your "Road Fund Licence". It has been nothing but excise duty (or a tax) for many years. Even though initially it was ring feNced to pay for road improvements. (In those days that meant actually laying tarmac over the top of the old rolled stone road surface). If you take what your gross pay is then deduct, Income Tax, NI, then add up all the other taxes you pay...... VAT, Duty on Petrol, Fags, Booze, cars / bikes, Life insurance premium tax, council tax, car insurance premium tax and probably some others, I would guess that your actual rate of tax is well over 60% of your gross pay.

slparry · Post by **slparry** » Wed Nov 20, 2013 3:32 pm

Wasn't there a "measure" somewhere about how many months we have to work per year until the Government are "paid" off and the money is "ours" I seem to recall June or July being the point back then?

Herb · Post by **Herb** » Wed Nov 20, 2013 4:25 pm

Tax freedom day this year was 30th May.

http://www.telegraph.co.uk/finance/pers ... m-day.html

Its quite a sobering thought.

I must admit, I really have a poor grasp on economics. It seems to me most money ends up in the Goverment coffers regardless of the tax rate, it just goes around the system for a bit longer.

eg: If I am paid £1, lets say the government get 30p directly, leaving me 70p. I spend that in the shops, the government gets 20% VAT leaving the shopkeeper 56p. He pays tax on the profit, so lets say he loses 6p and uses the rest to pay his staff, who pay tax etc etc. Eventually the government have everything don't they?

I think this sums it up better.

viewtopic.php?t=10153&highlight=prostitute

slparry · Post by **slparry** » Wed Nov 20, 2013 4:28 pm

Herb wrote:Tax freedom day this year was 30th May.

http://www.telegraph.co.uk/finance/pers ... m-day.html

Its quite a sobering thought.

I must admit, I really have a poor grasp on economics. It seems to me most money ends up in the Goverment coffers regardless of the tax rate, it just goes around the system for a bit longer.

eg: If I am paid £1, lets say the government get 30p directly, leaving me 70p. I spend that in the shops, the government gets 20% VAT leaving the shopkeeper 56p. He pays tax on the profit, so lets say he loses 6p and uses the rest to pay his staff, who pay tax etc etc. Eventually the government have everything don't they?

I think this sums it up better.

viewtopic.php?t=10153&highlight=prostitute

Pretty much, except for the chunk that goes off shore to China/Tiawan/East Europe, Mexico <insert whatever sweatshop location big corporates use> et al and which now we're not much of a manufacturing country means large sum drift away from the UK economy daily I guess

cornishflat · Post by **cornishflat** » Wed Nov 20, 2013 5:11 pm

Money, its like trying to hold water in a colander.

Harry Lime · Post by **Harry Lime** » Wed Nov 20, 2013 5:12 pm

Deleted.

Herb · Post by **Herb** » Wed Nov 20, 2013 7:48 pm

Harry Lime wrote:
If I service your bike and you pay me a tenner

H.

Sound like a good deal! I take it you will include oil and filter as well as labour in that price?

slparry · Post by **slparry** » Wed Nov 20, 2013 10:43 pm

Herb wrote:
Harry Lime wrote:
If I service your bike and you pay me a tenner

H.
Sound like a good deal! I take it you will include oil and filter as well as labour in that price?

Front and rear brake pads on my K12GT too please , seems more reasonable than the £180 BMW want

The Teutonic Tangerine · Thu Nov 21, 2013 11:42 am

slparry wrote:Wasn't there a "measure" somewhere about how many months we have to work per year until the Government are "paid" off and the money is "ours" I seem to recall June or July being the point back then?

I think you are right however I remember when I started work in 1974 it was about April so in otherword we pay about to or three months more of our income in tax than we did 40 years ago

Harry Lime · Post by **Harry Lime** » Thu Nov 21, 2013 12:00 pm

Deleted.

SP250 · Post by **SP250** » Thu Nov 21, 2013 1:57 pm

Start your own business and get a good accountant then draw a wage less than the minimum for paying tax and take the rest in dividends.
Simples

McBoxer · Post by **McBoxer** » Thu Nov 21, 2013 2:04 pm

SP250 wrote:...draw a wage less than the minimum for paying tax...

If you're servicing bikes for a tenner, I don't think you'll have a choice with that one!

BoxerTastic · Post by **BoxerTastic** » Fri Nov 22, 2013 7:24 am

... Then, having done the right thing all your life, embraced retirement and finally pegged-it, your kids get to look forward to paying inheritance tax on the house you dutifully leave them!

As a previous post says - go self-employed and invest in a decent accountant, or rob a bank... that's about the only worthwhile 'profession' left these days!