Jeder fünfte Gutverdiener gibt an, dass die 100.000-Pfund-Steuerfalle seine Karriere ruiniert
https://www.telegraph.co.uk/money/tax/income/top-earners-say-100k-tax-trap-ruining-career/
Von scotorosc
Jeder fünfte Gutverdiener gibt an, dass die 100.000-Pfund-Steuerfalle seine Karriere ruiniert
https://www.telegraph.co.uk/money/tax/income/top-earners-say-100k-tax-trap-ruining-career/
Von scotorosc
39 Kommentare
Anyone with a brain knows the tax trap needs to be tapered, but its not politically popular to.do.so. fortunately for those earning that amount mps will.be soon in the same tax trap so will.be fixed then
It’s terrible, the problem is that public sentiment is just ‘worlds smallest violin’ while the economy tanks into an unproductive wasteland.
It’s not ruining my career but it’s annoying my employer when I won’t do any extra work on overtime
Weird that the Telegraph should show that graph and then make the story solely about people on 100k. What about the more numerous poor sods on 60k-80k who are in the same ‚trap‘?
No shit. There is zero incentive in getting promoted into a managerial role to get a few hundred pounds more a month and double my stress levels.
It’s good for my pension though.
I’ll get downvoted, but for people without kids this “trap” literally doesn’t exist.
Someone put together a good set of graphs a while ago that shows this: https://www.reddit.com/r/HENRYUK/s/C0RCUQG5SR
Nobody who isn’t in the trap realises just how bad it can be, much moreso when you have kids in childcare. It’s fair enough that people just can’t sympathise but I’m convinced it is a real drag on the economy – people are reducing hours, stashing the max into pensions etc. to avoid it. DB pensions are also terrifically difficult to deal with in terms of tax planning.
Personally, I think that marginal rates above 50% always feel unfair even though in cash terms it’s not really any different than 49%. Just something about more than half being taken I guess. As well it’s hard to deal with tax codes and collecting the extra tax through payroll so most people who hit the trap find an unexpected tax bill when they do their return the first time. It can be quite a shock if a bonus pushes you up there or something.
The pension contribution taper is another nasty little surprise, if it impacts you then the whole pension regime starts to become a bad financial choice – you get almost no benefit and all the same restrictions. However it affects even less people and nobody gives a shit about them so it seems unlikely to be changed any time soon.
The various tax free allowances get removed at different levels, often in a cliff edge fashion, and rates increase at really quite low amounts these days – the 100k trap should be somewhere around 156k if it had been raised with inflation. The additional rate would be at 234k by now, rather than 125k. In fact everybody in that band earning less than 425k pays more tax now.
I suppose salary sacrifice buying EVs and bicycles are at least priming the second hand market, but that’s a very indirect benefit if it even exists. Luxury car tax is another tax which has become a joke through fiscal drag. We are all getting pumped and it feels like there is no respite in the foreseeable future.
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If electricity, housing and food were cheaper then we wouldn’t care so much about the tax. The main issue is that we have people who are higher earner and pay tax and those that earn next to nothing but borrow against their assets and completely dodge tax.
It’s a massive scam and the middle classes are getting hammered because someone has to pay and the ultra wealthy tend to give zero fs.
We’re all suffering, everyone apart from the super rich is doing their bit, some sections of society have been doing it longer than others.
This genuinely needs to be fixed. I think everyone can agree to that. But to say it’s ruining their career is a bit preposterous.
The pension solution means you still get the money, albeit deferred and you don’t hit the trap.
That solution gets worse by 2029 so we need to fix it by then. But today I don’t think this is ruining people’s careers.
Cue all the miserable people on £25k waking up because god forbid someone earns more than them.
Combined with fiscal drag and it affects more and more people. If the thresholds had kept pace with inflation over the last 2 decades I doubt we’d be having this conversation at all.
It’s actually the 50k+ earners who are the silent victims in all this…flying the petit bourgeois flag real high and getting fucked over because of it.
Think it’s time to move the tax bands tbh.
We pay more and more yet services get worse, everything just gets more expensive. People have nothing left to give.
I will cross into the 100k threshold before salary sacrifice with this years pay rise.
I know, tiny little violins, though I’m aware I have it much better than most.
I’ve already agreed with work that any future bonuses or pay rises will be in the form of additional leave rather than additional money, because there’s just no point in working when ~70% will go to the government in income taxes, and then an additional ~8-10% will go to the government in point-of-use taxes (VAT, fuel are the main ones).
That’s a massive net loss to the exchequer – both in the lost VAT, in the lost income taxes, the lost employers NI, **and** in the lost corporation taxes from my employer being able to bill clients for my work.
In the real world, without tax brackets having been frozen for 10+ years (when they maybe unfreeze in 2028), the loss of personal allowance threshold would be around £150,000 and the additional rate tax band would start closer to £200,000k, and I would simply take the pay rise and pay more tax – and every additional £15k I would be earning contributes more to the national finances than the entire PAYE, NI & VAT contribution of a minimum wage worker, who receives 0 government benefits.
For most people on minimum wage, what they pay in tax is returned to them in benefits and free childcare hours, which is why people talk about being a net positive to government finances after you earn £35,000+ a year.
Of note, in 2016, additional rate taxes started after £150,000 in PAYE earnings – in 2026, additional rate starts at £125,000 in PAYE earnings – that’s not even a freezing, it’s a reduction on what it was 10 years ago.
Also of note – higher rate tax starting at £50,000 in 2026 is crippling those that **should** be comfortably well off, but are, instead, struggling.
In all honesty the government’s job is to work to get the economy to where the cost of basic living is affordable and more average people have disposable income to spend in said economy. Everyone’s £1 isn’t going as far as used too and people work damn bloody hard to make £30-40k and the right wing view point of „everyone will leave for more money“ will be short lived once those countries stop paying mad premiums.
They should do what other countries do and set up a leaving or return tax. I guarantee the moment things start going the other way these right wing organisations like the telegraph will be “ the government is abandoning citizens!“
In other words, 80% of high earners are fine with it? Doesn’t sound like that big a deal, you always have the Dubai/UAE type who hate contributing anything.
The difference between “wealth” & “income” really ought to be taught at school.
The fact that in this day and age people think £100k is some vast some of money and nobody should earn it, is baffling.
The tax trap absolutely affects the whole economy, regardless of what you personally earn. We should be encouraging these higher earners as much as possible, it ultimately generates more tax for the country.
Hiding money in pensions and working less hours or reduced weeks, not bothering to look for promotions to avoid all the childcare going out of the window. Joke, absolute joke.
I don’t get in this day of age of computer why tax can’t be much more progressive and not just have these big cut of point. ps: everyone moaning spare a thought for a warehouse worker on 17k a year, lucky to go out for meal once every 3 or 4 month. What annoys me is gov say your in poverty if earning under £14k a year, so why the hell does tax kick in at 12.5k at 28%!
The sad thing is that £100k is nothing like what it was… the fiscal drag and tax rates really are killing productivity!
as someone who has never earned over 25k this is relatable
It’s genuinely a massive injustice but this crab bucket island makes it politically impossible to fix.
Surely it remains the case that every £1 above £100k you earn _increases_ your take home pay, even if that rate is slowed
That’s ridiculous. I have been fortunate to earn enough to pay the higher tax for a while now (retiring soon so that will change!). In no way does it ruin anybody’s career. I have always argued that if anything I should pay more tax.
It’s honestly stupid. Nursery ends next year thankfully, still think I’ll contribute to the pension though as the tax savings are too good not to. Unless you blow past it around 200k basic or so it’s just not worth it.
Due to company matching I’m banking more than the median household income in to the pension each year, IMAGINE if even a fraction of that made could actually be put back in to the economy rather than the US stock market.
Does it ruin my career though? Lol, fuck no. Would be nice to actually feel some of that benefit NOW rather than when im older.
It doesn’t seem like it should be a hard problem to solve. It makes me wonder why nothing’s been done about it.
No. What is completely unfair is 1 person earning 60k will pay about 5k more tax than 2 people earning 30k. Marriage allowance stopping as soon as you get into higher tax just adds insult to injury. Taxes should be a choice of houshold or individual.
How do B2B contracts work in the UK?
At that point, can’t you start your own firm as a sole trader and switch to providing invoiced services to your former employer now client?
The uk is absolutely tax mad Labour is even worse than Tory and it just needs to stop
It’s part of why you can’t see a doctor these days. Why would a GP work 5 days for less money than 4 days, especially if they’ve got kids and losing the childcare allowance?
That wipes out 20% of appointments and puts a bottleneck into getting into the system. Same with specialists. I’ve had 2 things that would have been a couple of weeks of antibiotics turn into major surgery and lifelong medical conditions because i couldn’t get an appointment in time.
Then the government wonders why the health service is grinding to a halt and the long term sick numbers are going through the roof. Could solve it with a stroke of a pen too.
One thing to consider for those declaring “the worlds smallest violin” this artificial salary and productivity cap, and the same one at 50k is holding back those that sit the tier under it, if I’m not pushing for a pay rise (not a lot of point), then I am sitting in the promotion point for someone in £80k and they have no where to go. It’s creating a massive ambition and productivity bottle neck, sheer policy madness
If I’m not misinformed, as of april MP salaries will now fall into this range, do you think we will see change then?
I started investing at 19 when I had two jobs while at Uni, and have been chasing FIRE (Financial Independence Retire Early) ever since. My income including bonus is now at 28 years old, right on the tax trap line. If I get any big promotions or job hop again, I’ll be into 71% tax and it’ll be entirely pointless.
My parents grew up on council estates and worked very hard to become eventually middle class, I like to think I’ve kept building on that a bit, no financial help but plenty of work ethic and good examples learned.
At first glance the above all sounds like a woe is me high earner whine, the truth is I love my life and I earn enough, it isn’t me this causes an issue for. The tax trap just means my next move is a four day week and then doing my job but never again going above and beyond, pushing boundaries and really driving things, because why would I, it’s 71% to the government?
The result is my life will be fairly similar except maybe a bit less stress and better work life balance, but HMRC will get 15-20 years of substantially less tax from me, and the economy will get substantially less productivity. I’m not the one this hurts primarily, for me it’s an annoyance, for the net recipients of tax money it’s a massive issue.
I’m not sure I’ve met anyone who thinks that income tax being scaled in a progressive manner is a bad idea. That’s exactly what we have (income tax and employee NI only):
39,521 / 50,000 =79% take home
54,058 / 75,000 =72.1% take home
68,559 / 100,000 =68.6% take home
78,058 / 125,000 =62.4% take home
91,287 / 150,000 =60.9% take home
There’s plenty of people who are able to see past marginal tax rates to see that the 60% tax trap is merely part of a mechanism that enables that and they don’t really mind. Sure everyone would ideally like to pay less tax but that scale doesn’t look terrifically iniquitous to me and someone has to bear the burden of taxation, why not those with the broadest shoulders as the cliche has it.
Yes we do have a significant problem with the withdrawal of childcare support at the same point but the ‘trap’ itself, it’s a tool, a clumsy inelegant tool that produces a perverse incentive (especially when diverting income to pension is so easy and prior to recent changes also provided and inheritance tax shelter) that damages our economy and our tax revenues and we should get rid of it but there are people who see past those perverse incentives and look at the effective rate.
This is me. Child in nursery, base pay just below 100k, commission takes me solidly over it. I’ve effectively already earned all the commission I can for the year, as my April pay plus base pay for the rest of the year is 100k. This means I won’t see any of my „incentive“ pay as it’ll all be going into my pension. I guess it does mean I’ll have a great retirement, but I’d much rather put some into a nice new house.
It’s funny how you can’t afford a house for most of your life, and then it’s made difficult to bring home money to pay for a nice one.
I’m miles away from that point and I can understand why people are unsympathetic to those that fall into that trap, but it really does need to change.
I am certainly of the opinion that high earners should pay more tax, but 100k is quickly becoming a good but not super high salary. Certainly not one that warrants effectively a 60% tax.
Ruining their career, how? Just salary sacrifice it down to £100k. Unless you’re well above £125k.