@ricequackers
The tax system of the UK seems especially designed to pick the pockets of the middle and upper middle classes. The 62% tax band between 100k and 125k, cleverly disguised as the "personal allowance taper" is especially egregious and is the reason I tend to go into an incoherent rage about taxes. When you factor in that you instantly lose tax-free childcare and 30 hours free childcare the moment you earn a pound over 100k (no taper at all), the effective marginal tax becomes greater than 100%, so you're actually worse off than if you earn under the threshold. That's why when my kid was in nursery, I deliberately had to contribute large sums of my pay into my pension to stay below this crucial threshold. Everyone lost out as a result of this maddening corner case - I lost out on disposable income, the government lost out on income tax revenue, and the economy lost out because that money is being saved instead of spent. Then there's the fact that the taxation system heavily penalises families with a stay-at-home parent and a high-earning breadwinner because there's no joint assessment unlike other countries. A friend of mine is in the worst possible situation as he earns roughly 100k from consulting while his wife doesn't work. Overall they get taxed significantly more than a couple earning 50k each, and also miss out on child benefit, despite both situations having the same amount of gross income coming into the household. Finally, other countries provide plenty of deductions that just don't exist in the UK. Things like mortgage interest or public transport commuting costs are deductible in many other European countries but not here. Why? Commuting by bus or train is an expense of doing a job, it's a publicly funded service and it encourages people to not drive which has social benefits, you shouldn't have to pay income tax on the cost of it.
@lostandfound2893
I'm glad someone is talking about how garbage the UK tax system is. Needs a full revamp.
@lspcie
UK tax system is crazy, completely disincentivises working or starting businesses.
@ravenmad9225
Weird is the wrong word. Immoral could be the word.
@davidoldboy5425
Only persons who benefit the overcomplicated system are accountants
@jonnyb7466
5:40 I think this quite misleading. As stated in the previous slide, council tax is based on the value in 1991, or an estimate of what that would have been. The Southend property may be worth 321k now but that is not a band H property at all. The message that council tax is regressive is true but this is not illustrating it properly. The main point of council tax being regressive that it isn't proportional to the property price - a small house in the north will be paying a higher percentage of the property's value in council tax than a large house in london.
@migsteele
You’ve also missed out the loss of the free childcare hours once you reach £100k which result in a >100% marginal tax.
@tatianastarcic
higher taxes = higher inflation = government subsides to quell inflation, The rising interest rate can surely control inflation, but won't prevent erosion of the eroding purchasing power of the bank note. I have learnt my lesson this time. The banks can't be making money off my money, while inflation eats into it. I have set aside 650k to invest in the stock market now, since that keeps up with inflation, but I don't know how to get started.
@junedhussain6252
The UK tax system is one of the reasons why we're facing problems today. Unfortunately, none of the politicians are focusing into making the tax system simple to understand. People talk about the lack of productivity and ambition to work even harder. How are you gonna achieve this if the tax rates are too high and too complicated. There needs to be a complete overhaul of the tax system and keeping tax rates down.
@jonnyb7466
The other thing about the child benefit is that it based on one parent's income, meaning one parent earning 80k gets nothing but if two parents are on 59k they get the full benefit.
@davidcarter8320
It also gets worse if you have a student loan as you lose another 9% over a certain threshold.
@vencik_krpo
The key term here is “tax system”. And the point is: there is none. Not only in Britain, our (Czech) one is just as weird. And the reason is: taxes are introduced and cut not as a systemic mechanism, but as a way to score political points. Basically to buy votes. Everywhere, that’s no secret…
@caseysmith4206
To add to complexity it’s different in Scotland
@jackbrownio3
At least most of our taxes are automatic rather than having to file them manually like they do in the US. But Yes the UK system should definitely be simplified from the Government Admin side and made fairer for poorer households
@archierch0463
Got a copy of Too Long for Christmas. Thanks for a great year of TDLR on YouTube and a great magazine too.
@beauthestdane
Meanwhile, the US says "Hold my beer"
@sirloin8745
Companies & individuals pay Accountants hundreds of thousands for a reason. Turning assets into expenses is a lucrative business.
@shaneintheuk2026
You missed the highest marginal tax rate which is when you’re on benefits. Getting off of benefits is made difficult by the government taking away 55% of what you earn. So the lowest income earners pay as much as people on £100k. If you add in how hard it is to go back on to benefits there’s a huge disincentive to take the risk of taking insecure work which traps people in benefits dependency.
@jamesardron
The problem with tax is the changes are too low. Nowadays 40k being an increased tax rate is mad! It should be higher to improve people moving into those and getting comfortable
@faar2faar