tax

[miss_me]

is it true that if i start work earning �14,000 that i will be paying 22% as this is a huge chunk of money!!

[Oneeyedvic]

You will have a tax code - single person is currently something like 507L - this means that you can earn �5070 tax free. The next rate is 10% for the next �2000. Anything after that (ie �14,000 - 5070 - 2000 = approx �7000) will be taxed at 22%

[dzug]

You'll also be paying National Insurance which will take another chunk of your earnings once you reach the threshold which is roughly the same as the single person's tax allowance.

[miss_me]

my national insurance is going to be roughly �87 per month - its silly. Do i not get any exceptions as i have only just finished uni??!! hehe!

[gammaray]

No exceptions and when your salary rises above �15000 (I think) you'll start to pay back any student loans...another chunk. Wecome to the real world!

[Catso]

Still, if you've just left Uni, only another 44 years to go till retirement (unless it goes up again). Then you start getting money back again.

[sixpence]

As catso says, there's something to look forward to, but if you plan ahead and pay for a private pension, you'll still have to pay tax, so don't get too excited.

[scoobydooby]

Blimey, if my kids are only going to earn �14,000 when they finish Uni, I'm going to try to put them off going. I thought the whole idea was to have a better education and secure the best paid jobs?

[Catso]

Not implying this for miss_me, but my own daughter finished uni. last year and it's one of her ambitions never to earn above the loan repayment threshold so she never has to pay the loan back.

[miss_me]

scoobydooby - thanks for negative vibes(!) No its not great money but i am doing this until i do two other exams i want to do to then go on to become a teacher. At least im not signing on and taking all your tax payers money which i'm sure you would complain about. I am going to be successful and earn more money than this but at the moment this is what i could get in the area i am in. I could just not have a job at all but i dont want to rely on my parents financially anymore and also want to start paying them back. Money isnt everything - i'd settle for being skint and happy rather than rich and miserable

[sixpence]

Good luck with your other exams, miss_me. I'm sure no-one meant to put you down. It's a bit of a shock for everyone when they have to start paying tax, though, isn't it?

[miss_me]

Shock?? i nearly had a heart attack!! i think i did shed a tear or two... lol!! i'l be paying more in tax thean i do in rent!! was talking to my mum about it and she is in a higher band than i am obviously, for every �1 she earns the tax man gets 40p!!!!! Just doesnt seem worth it sometimes!! Ho hu never mind everyone is in same boast arent they?! xxx

[JudgeJ]

Well, miss_me, from your sheltered upbringing and your dabble at self-sufficiency at university, you have now found out what most of the rest of us are moaning about!

From your modest salary of �14,000 you will see total deductions of �1715 in Income Tax and �986 in so-called National Insurance (which is just income tax by another name). This total of �2,700 is just a fraction short of 20% of your gross income, meaning you work one day a week to provide funds for the government to squander.

Should you be fortunate enough to be able to save any money from what is left, the pathetic interest your savings will attract will also be taxed at 22%. Almost all of the money that you spend from what remains (apart from some zero-rated items such as food and children�s clothes) will see 14.89% (17.5% of the 117.5% you pay in the shops) of the sum spent going to the exchequer. This is amusingly known as "Value Added Tax" (VAT), whereas it should be known as Price Added Tax because only the price has increased, not the value.

If you spend money on certain other things these attract special additional taxes called �duties� (on top of which, of course, VAT is charged). Insurance policies (5% or 17.5% depending on type), Alcohol (35p per pint of beer, �6 on a bottle of spirit), fuel (about 75% of the money you spend on fuel goes to the exchequer). Don�t forget Council Tax should you ever be lucky enough to own or rent a property - the list is endless.

I once did a calculation of the amount of my income which eventually returned to the exchequer and estimated it to be well in excess of 65%. Soon, we shall simply be given a few pence pocket money each week, with our employers being forced to pay our salaries direct to the government.