3 ms·

I am a bit surprised to read this about the UK. Is this everywhere or just in some regions? Anyway, the issue is not the taxation but the misuse, then?

by mk89 3y ago

gumballindie 3y ago
Tax hikes coupled with higher interest rates and an increased cost of living are making a dent. For software developer, contractors in particular - the only way to reach something that somewhat resembles US pay - are now subject to tightened regulation called IR35. Contracts "inside" IR53 are taxed just like regular pay even if done via an LTD and you can't claim expenses. This regulation is meant to catch disguised employees, but large clients don't want to risk it. In reality what's happening is that contract work is sent to outsourcing companies, one of which is the prime minister's wife's father Infosys. And that's one example. Outside tech there are all sorts of "traps": people's wages are increasing only to be caught up in higher tax brackets essentially meaning their pay is still low. Factoring in what I wrote about taxes, col, and interest raters, everyone is much poorer now than before. A lot of low income earners are squeaking about further tax hikes as if that's going to improve their lifes somehow. It's a crab mentality. In regards to regions, it naturally varies, but overall the situation is the same everywhere. For instance, the second largest city just went bankrupt and I suppose those people are in for a ride. The region where I live, despite being the type that pays the tax so many yearn for, roads are filled with potholes, and the local surgery constantly complains about how much work they need to do. Friday, 2 PM it's closed for the weekend, and each day there's a two hour lunch break. You can't make this up. But throughout schools, hospitals, complain about being understaffed, including private companies, yet when they try and increase wages to attract talent, said wages are immediately taxed. I can go on for ages, but something's way off about the country and it seems like a lot of factors are converging and forming a perfect storm.
- KaiserPro 3y ago
  Its not direct taxes that people is causing pain for those on lower income. taxation for people on £250k is very different to those on £25k Sure _graduates_ are feeling the pinch of tax. No, the cost of living is driven by three things: Rent. Staple inflation (food, basic travel, etc) fucking fuel prices. If you're outside of london and you are earning the average of £27k after tax its £1800 a month. rent for a two bed place is between £850-1200 a month, thats going to go up your heating is £250 a month (thats doubled ) your food bill has doubled Your car insurance has gone up to £1k a year Thats the real squeeze. Yes taxing them harder is bad. However taxing someone on £250k a year a bit more, fine they can fucking take it. removing the ridiculous contractor loophole where you can go from 45% income tax to <30% even if you earn megabucks is great.(hello IR35) Now increase captial gains tax.
  - flir 3y ago
    Fun fact: when you take account of inflation, petrol's pretty cheap (135p in 2012 would be 184p today according to the BofE's inflation calculator - you get different results with different starting points of course, but it's hard to cherry-pick one that's that runs much above inflation over the same period). I reckon fuel costs feel worse now because salaries have flatlined. > removing the ridiculous contractor loophole where you can go from 45% income tax to <30% While paying your own holiday, insurance, employer's stamp, sick pay, pensions, bench time, etc. If you've got an in-demand skill and you're healthy I'd say it's definitely an improvement, but it's not quite as simple as comparing tax rates.
    - KaiserPro 3y ago
      > While paying your own holiday, insurance, employer's stamp, sick pay, pensions, bench time, etc. Whilst also being able to write of a bunch of things against tax (insurance, car, property if you're clever, loans etc etc etc). I am fully aware of how big the loophole used to be. Its also being abused to keep costs down at high turnover jobs as well. but that's another issue. > If you've got an in-demand skill and you're healthy I'd say it's definitely an improvement, but it's not quite as simple as comparing tax rates. Its entirely to do with tax minimisation, otherwise people wouldn't go through the faff of doing it? Why on earth would you give up employment rights and stability, just so you can have the privilege of doing accounts each year? Its avoiding tax, something that low/middle earners aren't able to do/cost effective enough.
flir 3y ago
Local government has two sources of funds - money raised locally via taxation, and a grant from central government. To take Birmingham as an example, the central government grant in 2010 was £1.125bn, but that had been reduced to £250m by 2020. Some of this was offset by locally retained business rates (£550m which previously went to central government) but there's still a shortfall of £525m (more when you account for inflation). Local government has responded by cutting services to the bone, and focusing on those services that they are required by statute to provide. Some councils also took a shot at commercial property investment (they're barred from investing in residential property for ideological reasons). You can imagine how those investments are doing in the post-WFH world. So over the past decade all the slack (and then some) has been removed from the system. So when something unexpected comes along (like a £760m equal pay award) it's the straw that breaks the camel's back. But the root cause is the decade of austerity we've just suffered. Cutting back even further isn't the answer.
- drcongo 3y ago
  Thank you for explaining what's actually going on. Groups like the "Taxpayers Alliance" (which is where I suspect our friend is getting their information from) are actually very right-wing, extreme libertarian think tanks pushing an agenda that's supposed to make people feel like taxation is unfair. Personally, I don't actually pay myself particularly well but I still pay as much tax as I possibly can, even though I despise the current government. I claim none of the deductions I'm entitled to, and I still have enough to live comfortably. The tories and austerity have spent more than a decade destroying this country.
  - flir 3y ago
    Tufton Street. Meh. When someone starts in on them I always ask if they've ever tried joining the Taxpayers Alliance.

I am a bit surprised to read this about the UK. Is this everywhere or just in some regions? Anyway, the issue is not the taxation but the misuse, then?

by mk89 3y ago

I am a bit surprised to read this about the UK. Is this everywhere or just in some regions? Anyway, the issue is not the taxation but the misuse, then?

gumballindie 3y ago

Tax hikes coupled with higher interest rates and an increased cost of living are making a dent. For software developer, contractors in particular - the only way to reach something that somewhat resembles US pay - are now subject to tightened regulation called IR35. Contracts "inside" IR53 are taxed just like regular pay even if done via an LTD and you can't claim expenses. This regulation is meant to catch disguised employees, but large clients don't want to risk it. In reality what's happening is that contract work is sent to outsourcing companies, one of which is the prime minister's wife's father Infosys. And that's one example. Outside tech there are all sorts of "traps": people's wages are increasing only to be caught up in higher tax brackets essentially meaning their pay is still low. Factoring in what I wrote about taxes, col, and interest raters, everyone is much poorer now than before. A lot of low income earners are squeaking about further tax hikes as if that's going to improve their lifes somehow. It's a crab mentality. In regards to regions, it naturally varies, but overall the situation is the same everywhere. For instance, the second largest city just went bankrupt and I suppose those people are in for a ride. The region where I live, despite being the type that pays the tax so many yearn for, roads are filled with potholes, and the local surgery constantly complains about how much work they need to do. Friday, 2 PM it's closed for the weekend, and each day there's a two hour lunch break. You can't make this up. But throughout schools, hospitals, complain about being understaffed, including private companies, yet when they try and increase wages to attract talent, said wages are immediately taxed. I can go on for ages, but something's way off about the country and it seems like a lot of factors are converging and forming a perfect storm.

KaiserPro 3y ago
Its not direct taxes that people is causing pain for those on lower income. taxation for people on £250k is very different to those on £25k Sure _graduates_ are feeling the pinch of tax. No, the cost of living is driven by three things: Rent. Staple inflation (food, basic travel, etc) fucking fuel prices. If you're outside of london and you are earning the average of £27k after tax its £1800 a month. rent for a two bed place is between £850-1200 a month, thats going to go up your heating is £250 a month (thats doubled ) your food bill has doubled Your car insurance has gone up to £1k a year Thats the real squeeze. Yes taxing them harder is bad. However taxing someone on £250k a year a bit more, fine they can fucking take it. removing the ridiculous contractor loophole where you can go from 45% income tax to <30% even if you earn megabucks is great.(hello IR35) Now increase captial gains tax.
- flir 3y ago
  Fun fact: when you take account of inflation, petrol's pretty cheap (135p in 2012 would be 184p today according to the BofE's inflation calculator - you get different results with different starting points of course, but it's hard to cherry-pick one that's that runs much above inflation over the same period). I reckon fuel costs feel worse now because salaries have flatlined. > removing the ridiculous contractor loophole where you can go from 45% income tax to <30% While paying your own holiday, insurance, employer's stamp, sick pay, pensions, bench time, etc. If you've got an in-demand skill and you're healthy I'd say it's definitely an improvement, but it's not quite as simple as comparing tax rates.
  - KaiserPro 3y ago
    > While paying your own holiday, insurance, employer's stamp, sick pay, pensions, bench time, etc. Whilst also being able to write of a bunch of things against tax (insurance, car, property if you're clever, loans etc etc etc). I am fully aware of how big the loophole used to be. Its also being abused to keep costs down at high turnover jobs as well. but that's another issue. > If you've got an in-demand skill and you're healthy I'd say it's definitely an improvement, but it's not quite as simple as comparing tax rates. Its entirely to do with tax minimisation, otherwise people wouldn't go through the faff of doing it? Why on earth would you give up employment rights and stability, just so you can have the privilege of doing accounts each year? Its avoiding tax, something that low/middle earners aren't able to do/cost effective enough.

flir 3y ago

Local government has two sources of funds - money raised locally via taxation, and a grant from central government. To take Birmingham as an example, the central government grant in 2010 was £1.125bn, but that had been reduced to £250m by 2020. Some of this was offset by locally retained business rates (£550m which previously went to central government) but there's still a shortfall of £525m (more when you account for inflation). Local government has responded by cutting services to the bone, and focusing on those services that they are required by statute to provide. Some councils also took a shot at commercial property investment (they're barred from investing in residential property for ideological reasons). You can imagine how those investments are doing in the post-WFH world. So over the past decade all the slack (and then some) has been removed from the system. So when something unexpected comes along (like a £760m equal pay award) it's the straw that breaks the camel's back. But the root cause is the decade of austerity we've just suffered. Cutting back even further isn't the answer.

drcongo 3y ago
Thank you for explaining what's actually going on. Groups like the "Taxpayers Alliance" (which is where I suspect our friend is getting their information from) are actually very right-wing, extreme libertarian think tanks pushing an agenda that's supposed to make people feel like taxation is unfair. Personally, I don't actually pay myself particularly well but I still pay as much tax as I possibly can, even though I despise the current government. I claim none of the deductions I'm entitled to, and I still have enough to live comfortably. The tories and austerity have spent more than a decade destroying this country.
- flir 3y ago
  Tufton Street. Meh. When someone starts in on them I always ask if they've ever tried joining the Taxpayers Alliance.