Brexit or Britin

[Beefheart]

our tax rates are not particularly high, are they? certainly taxing everyone "to death" sounds a little tiny bit massively projectfeary...

The marginal rate of tax for those on average incomes is, I don't doubt, rather higher than you would imagine. Something over 40% for that average person.

Many people tend to forget that in addition to income tax they are paying national insurance (a misnomer if I ever heard one) 20% less allowance, VAT 20% on most non-food items, duties on certain consumption products in addition to VAT - can be as high as 70% dependent on the product, council tax - generally viewed as averaging 8% of household income, insurance tax - either 9.5% or 20% dependent upon type, stamp duty - most commonly 2% but can be up to 5% or more, inheritance tax - 40% on anything above 325k threshold and anything the Treasury can dream up in addition.

It used to be that the Swedish state was pointed out as the highest taxation regime in Europe, but the average tax burden on Swedes is no higher than that in the UK.

So let's say an unlucky bastard earning £26k per year has a tax heavy lifestyle, it would go something like this:

Income tax £3000 pa
National Insurance £2477 pa
VAT on purchases including clothing, some food items, services including gas, electricity, water, fuel for vehicle, alcohol, tobacco, etc £2500 pa
Duty on fuel, alcohol, tobacco £1450 pa
Council tax £1300 pa
Insurance tax £60 pa
Tax on vehicle maintenance and repair £240 pa
Stamp duty (if moving homeowner) £1500
IHT £7500 (based on £400k estate split between four siblings)

= £20027

Excluding the last two, the rate of taxation is still 42%. So the state is taking approaching 50% of the poor saps income to distribute and spend as inefficiently as it possibly can and does.

For a start, the estate pays IHT, not the recipients. So you can feck that one off.

[thebish]

I actually earn about £26,000 per year. I think I am well enough qualified to know if I am being taxed to death or not. I'm not!

outside of the EU - I don't see how any of your list would automatically change...

[Worthy4England]

Trying to work this through - £26k per annum, 42% the Chancellor takes (I don't disagree with the maths particularly) leaving £15k per annum. I just want to know how boring they must have been to accumulate a £400k estate? They haven't paid for any food/holidays, yet they clearly have a high VAT bill in relation to drinking/smoking/food yadda yadda etc. which would reduce that £15k significantly...

I'm guessing they must have some sort of offshore Accounts...

[Harry Genshaw]

I'm absolutely torn over this election and keep changing my mind about which way to vote;

Ignoring the economics arguments which I either don't understand or bore me rigid - I was going to vote out because it's just another layer of bureaucracy and politicians that I think we can do without and it feels less democratic.

On the other hand I'm tempted to stay in because we're pretty crap aren't we? Some still have delusions of us being some great power, yet in reality we're just some middling nation that does better when we pick the right side to be on.

In the end I think it's going to be decided on who annoys me more - Cameron or Gove

[bedwetter2]

our tax rates are not particularly high, are they? certainly taxing everyone "to death" sounds a little tiny bit massively projectfeary...

The marginal rate of tax for those on average incomes is, I don't doubt, rather higher than you would imagine. Something over 40% for that average person.

Many people tend to forget that in addition to income tax they are paying national insurance (a misnomer if I ever heard one) 20% less allowance, VAT 20% on most non-food items, duties on certain consumption products in addition to VAT - can be as high as 70% dependent on the product, council tax - generally viewed as averaging 8% of household income, insurance tax - either 9.5% or 20% dependent upon type, stamp duty - most commonly 2% but can be up to 5% or more, inheritance tax - 40% on anything above 325k threshold and anything the Treasury can dream up in addition.

It used to be that the Swedish state was pointed out as the highest taxation regime in Europe, but the average tax burden on Swedes is no higher than that in the UK.

So let's say an unlucky bastard earning £26k per year has a tax heavy lifestyle, it would go something like this:

Income tax £3000 pa
National Insurance £2477 pa
VAT on purchases including clothing, some food items, services including gas, electricity, water, fuel for vehicle, alcohol, tobacco, etc £2500 pa
Duty on fuel, alcohol, tobacco £1450 pa
Council tax £1300 pa
Insurance tax £60 pa
Tax on vehicle maintenance and repair £240 pa
Stamp duty (if moving homeowner) £1500
IHT £7500 (based on £400k estate split between four siblings)

= £20027

Excluding the last two, the rate of taxation is still 42%. So the state is taking approaching 50% of the poor saps income to distribute and spend as inefficiently as it possibly can and does.

For a start, the estate pays IHT, not the recipients. So you can feck that one off.

Perhaps you misinterpreted what I was saying (as was Worthy). If the estate has a value of 400k of which four persons are to receive an equal share, then the taxman/woman deducts the below threshold value of 325k from the 400k leaving 75k which is then taxed at 40% or 30k. Yes the amount of 30k is deducted from the value of the estate but the net effect is that each of the four receives 7.5k less. Also, because of the way things are, each recipient may have to pay IHT up front before the estate is released for distribution.

[bedwetter2]

Trying to work this through - £26k per annum, 42% the Chancellor takes (I don't disagree with the maths particularly) leaving £15k per annum. I just want to know how boring they must have been to accumulate a £400k estate? They haven't paid for any food/holidays, yet they clearly have a high VAT bill in relation to drinking/smoking/food yadda yadda etc. which would reduce that £15k significantly...

I'm guessing they must have some sort of offshore Accounts...

Oooh, you are a herbert ain't you.

I know it's just one of your little wind-ups but the 26k earner is not the stiff who has just bequethed 1/4 of his estate to our destitute 26k earner. Poor b'stard, taxed to the hilt.

[Beefheart]

our tax rates are not particularly high, are they? certainly taxing everyone "to death" sounds a little tiny bit massively projectfeary...

The marginal rate of tax for those on average incomes is, I don't doubt, rather higher than you would imagine. Something over 40% for that average person.

Many people tend to forget that in addition to income tax they are paying national insurance (a misnomer if I ever heard one) 20% less allowance, VAT 20% on most non-food items, duties on certain consumption products in addition to VAT - can be as high as 70% dependent on the product, council tax - generally viewed as averaging 8% of household income, insurance tax - either 9.5% or 20% dependent upon type, stamp duty - most commonly 2% but can be up to 5% or more, inheritance tax - 40% on anything above 325k threshold and anything the Treasury can dream up in addition.

It used to be that the Swedish state was pointed out as the highest taxation regime in Europe, but the average tax burden on Swedes is no higher than that in the UK.

So let's say an unlucky bastard earning £26k per year has a tax heavy lifestyle, it would go something like this:

Income tax £3000 pa
National Insurance £2477 pa
VAT on purchases including clothing, some food items, services including gas, electricity, water, fuel for vehicle, alcohol, tobacco, etc £2500 pa
Duty on fuel, alcohol, tobacco £1450 pa
Council tax £1300 pa
Insurance tax £60 pa
Tax on vehicle maintenance and repair £240 pa
Stamp duty (if moving homeowner) £1500
IHT £7500 (based on £400k estate split between four siblings)

= £20027

Excluding the last two, the rate of taxation is still 42%. So the state is taking approaching 50% of the poor saps income to distribute and spend as inefficiently as it possibly can and does.

For a start, the estate pays IHT, not the recipients. So you can feck that one off.

Perhaps you misinterpreted what I was saying (as was Worthy). If the estate has a value of 400k of which four persons are to receive an equal share, then the taxman/woman deducts the below threshold value of 325k from the 400k leaving 75k which is then taxed at 40% or 30k. Yes the amount of 30k is deducted from the value of the estate but the net effect is that each of the four receives 7.5k less. Also, because of the way things are, each recipient may have to pay IHT up front before the estate is released for distribution.

Yeah, but if you factor in they would be receiving net £92.5k from the estate then they're tax rate is more like 15-16%.

[Prufrock]

Perhaps you misinterpreted what I was saying (as was Worthy). If the estate has a value of 400k of which four persons are to receive an equal share, then the taxman/woman deducts the below threshold value of 325k from the 400k leaving 75k which is then taxed at 40% or 30k. Yes the amount of 30k is deducted from the value of the estate but the net effect is that each of the four receives 7.5k less. Also, because of the way things are, each recipient may have to pay IHT up front before the estate is released for distribution.

You're not an accountant, are you?!

If your tax figure is including the one-off IHT, your income is going to need £100k sticking on top!

Almost half of your end figure is made up of one-off taxes on assets worth a shed-load of cash!

[thebish]

Trying to work this through - £26k per annum, 42% the Chancellor takes (I don't disagree with the maths particularly) leaving £15k per annum. I just want to know how boring they must have been to accumulate a £400k estate? They haven't paid for any food/holidays, yet they clearly have a high VAT bill in relation to drinking/smoking/food yadda yadda etc. which would reduce that £15k significantly...

I'm guessing they must have some sort of offshore Accounts...

Oooh, you are a herbert ain't you.

I know it's just one of your little wind-ups but the 26k earner is not the stiff who has just bequethed 1/4 of his estate to our destitute 26k earner. Poor b'stard, taxed to the hilt.

ahhh - so, in this scenario, there is more income to be declared than the £26,000 - the tax bill you calculated is for an income of £126,000...

[bedwetter2]

I actually earn about £26,000 per year. I think I am well enough qualified to know if I am being taxed to death or not. I'm not!

outside of the EU - I don't see how any of your list would automatically change...

No you are clearly still alive, so more likely your pips are just beginning to squeak or don't you remember Denis Healey.

The EU does not impinge that much on tax apart from trying to harmonise VAT rates. At the moment. You asked the question as to whether tax rates are high. I provided a summary of what Mr Average is being relieved of annually.

[BWFC_Insane]

Once you start adding tax on alcohol, fuel and tobacco and make out that is some sort of "tax on income" you're already in bullshit territory anyway....

[Prufrock]

Ah yes, Mr Average's annual £100k inheritance!

[Lord Kangana]

I can't wait for when the tories have succeeded with their plan and we all have to pay for things individually rather than collectively through tax.


Then hear the moaning.

[bedwetter2]

Perhaps you misinterpreted what I was saying (as was Worthy). If the estate has a value of 400k of which four persons are to receive an equal share, then the taxman/woman deducts the below threshold value of 325k from the 400k leaving 75k which is then taxed at 40% or 30k. Yes the amount of 30k is deducted from the value of the estate but the net effect is that each of the four receives 7.5k less. Also, because of the way things are, each recipient may have to pay IHT up front before the estate is released for distribution.

You're not an accountant, are you?!

If your tax figure is including the one-off IHT, your income is going to need £100k sticking on top!

Almost half of your end figure is magde up of one-off taxes on assets worth a shed-load of cash!

Of course the 100k could be counted as income but our hero has just used that money as a deposit to purchase a house, moving from very nasty rented accommodation in Farnworth to a better location in Bromley Cross.

And of course both the stamp duty and the IHT sums are one-offs. He can't afford to do this every year you know. But this is an example of what a lot of people encounter at least once in their lives. The rest of the figures are quite typical of the levels taxation that people on the average income enjoy.

[bedwetter2]

Once you start adding tax on alcohol, fuel and tobacco and make out that is some sort of "tax on income" you're already in bullshit territory anyway....

So what would you call it? Duty is tax and duty on alcohol, fuel, tobacco, etc comes out of your income if you purchase it.

[Beefheart]

Once you start adding tax on alcohol, fuel and tobacco and make out that is some sort of "tax on income" you're already in bullshit territory anyway....

So what would you call it? Duty is tax and duty on alcohol, fuel, tobacco, etc comes out of your income if you purchase it.

It's a tax on consumption, not on income.

[Bruce Rioja]

I actually earn about £26,000 per year. I think I am well enough qualified to know if I am being taxed to death or not. I'm not!

outside of the EU - I don't see how any of your list would automatically change...

Serious question, Bish. Do vicarages etc. count as a benefit in kind?

[Beefheart]

I actually earn about £26,000 per year. I think I am well enough qualified to know if I am being taxed to death or not. I'm not!

outside of the EU - I don't see how any of your list would automatically change...

Serious question, Bish. Do vicarages etc. count as a benefit in kind?

'Where a minister is provided with housing for the better performance of the duties of the office and it is customary for living accommodation to be provided for such ministers (usually referred to as “job-related accommodation”), the value of the accommodation provided is not taxable. This applies to beneficed clergy and to other ministers with pastoral responsibilities where residence in a particular place is a necessary part of the job.'

[Bruce Rioja]

I actually earn about £26,000 per year. I think I am well enough qualified to know if I am being taxed to death or not. I'm not!

outside of the EU - I don't see how any of your list would automatically change...

Serious question, Bish. Do vicarages etc. count as a benefit in kind?

'Where a minister is provided with housing for the better performance of the duties of the office and it is customary for living accommodation to be provided for such ministers (usually referred to as “job-related accommodation”), the value of the accommodation provided is not taxable. This applies to beneficed clergy and to other ministers with pastoral responsibilities where residence in a particular place is a necessary part of the job.'

Interesting. Do we know why this is?

[bedwetter2]

Ah yes, Mr Average's annual £100k inheritance!

Do you have relatives or a special "friend" who looks kindly upon you? Then it is possible that you may inherit such an amount.....it has been known to happen. On the other hand, you may be an obnoxious shit who wouldn't receive the drippings off their nose. Either way, relatively modest houses of parents or others once sold produce similar sums very frequently.