Taxes and motivation?
Discussion
Completing my self assessment now and looking at how much tax I have to pay on personal income (obviously supercars are personal expenses not business), I'm getting put off having supercars. Whilst I can afford them I just feel gutted and physically ill at having to pay 60%+ tax on them.
So if you earn over £100k, then you pay 40-45% income tax, plus 14% NI (as my business so my cost in effect too), plus 11% NI, so for every £100 I spend personally over £100k I pay 70% tax.
So say you own these cars, its cheaper tax wise on finance as you have less of an annual charge / cost and hence lower tax, but if you own them in CASH or on finance, you're still paying probably £30-60k a year and they're luxurious so it's from the income you're having above £100k, so in effect that's costing you £70-210k of GROSS income just in costs of ownership MOST of which is tax.
So they cost 3x as much in tax as they cost in personal usage.
That is depressing, and puts you off owning them, as I get zero benefit from taxes generally (kids in private school, have private healthcare, dont recieve any benefits - and school, dole and NHS are 75% of total govt expenditure).
So it's putting me off spending any money at all... why bother when every £1 you spend is £2 is tax?
Does anyone else feel the same way? Tempts you to sell up as the tax is destroyed at source too (all govt spending comes from printing new money, tax is just used to control inflation, your tax money is destroyed by HMRC and all tax is just a budget balancing exercise - this is the facts, most people don't understand that, but that's how govt banking works).
Anyone else feel the same or did everyone else exit their businesses before they started enjoying toys? If you've sold shares and sold your businesses and hence had 20% cap gains so money is over the tax wall, then you're in a different position, but owning my business I'm into basically 70% tax now. Dividends same deal as you're 25% corp tax and divs come after that at the 38% (25+38 = 63% tax on anything I spend).
So if you earn over £100k, then you pay 40-45% income tax, plus 14% NI (as my business so my cost in effect too), plus 11% NI, so for every £100 I spend personally over £100k I pay 70% tax.
So say you own these cars, its cheaper tax wise on finance as you have less of an annual charge / cost and hence lower tax, but if you own them in CASH or on finance, you're still paying probably £30-60k a year and they're luxurious so it's from the income you're having above £100k, so in effect that's costing you £70-210k of GROSS income just in costs of ownership MOST of which is tax.
So they cost 3x as much in tax as they cost in personal usage.
That is depressing, and puts you off owning them, as I get zero benefit from taxes generally (kids in private school, have private healthcare, dont recieve any benefits - and school, dole and NHS are 75% of total govt expenditure).
So it's putting me off spending any money at all... why bother when every £1 you spend is £2 is tax?
Does anyone else feel the same way? Tempts you to sell up as the tax is destroyed at source too (all govt spending comes from printing new money, tax is just used to control inflation, your tax money is destroyed by HMRC and all tax is just a budget balancing exercise - this is the facts, most people don't understand that, but that's how govt banking works).
Anyone else feel the same or did everyone else exit their businesses before they started enjoying toys? If you've sold shares and sold your businesses and hence had 20% cap gains so money is over the tax wall, then you're in a different position, but owning my business I'm into basically 70% tax now. Dividends same deal as you're 25% corp tax and divs come after that at the 38% (25+38 = 63% tax on anything I spend).
Depends if you're drawing to purchase, or if you're purchasing from a backlog of savings. I find it more palatable to purchase from a backlog of savings. It becomes slightly easier thinking about £100-200k's worth of tax if it was taxed a couple of years ago and the money has been sitting in your account for a little while. Drawing to purchase makes it a much less appetising proposal, as you're effectively paying £300k for a £150k car.
Feel your pain and the tax burden in the UK is a p1ss-take at this point, that 6% rise in corp tax just ridiculous tbh.
The effective rate on corp tax and divs is more like 53% though as the div tax is applied to a net figure after corp tax...still over 50% of course which is just wrong. As another poster said if you are paying for a toy out of savings that were taxed a while ago it certainly feels a bit better. Personally I keep divs to a minimum with a view to claiming entrepreneurs relief 5-10 yrs down the road (I'm assuming it will still exist then).
The effective rate on corp tax and divs is more like 53% though as the div tax is applied to a net figure after corp tax...still over 50% of course which is just wrong. As another poster said if you are paying for a toy out of savings that were taxed a while ago it certainly feels a bit better. Personally I keep divs to a minimum with a view to claiming entrepreneurs relief 5-10 yrs down the road (I'm assuming it will still exist then).
Move to the Isle of Man.
I did.
https://www.locate.im/relocating/uk/tax-and-ni/inc...
I did.
https://www.locate.im/relocating/uk/tax-and-ni/inc...
Edited by TheDeadPrussian on Friday 19th January 16:02
TheDeadPrussian said:
Move to the Isle of Man.
I did.
Tbh Italy is 0% cap gains now also I believe under certain circumstances.I did.
What I like and find interesting about the USA is you can drive to the next state if you're not happy about what you're paying - and people do. In California, 34% cap gains. In Nevada/Texas etc 20% (federal only, no state). In the USA also they have 0% tax on the 1st $10m of gains on shares held for more than 5 years. So if you sold $30m of equity say, in the UK that'd probably give you $29m after deal costs, 20% tax on that (10% on first 1m), equals $23m. In Nevada, Texas, Florida etc you'd instead walk away with $26m. In CA you'd only get $19m.
So relatively similar life style between Nevada, Texas and CA - in CA you'd get $19, in Nevada $26, so people just left.
https://www.dailymail.co.uk/yourmoney/property/art...
https://thehill.com/homenews/state-watch/4401350-n...
TheDeadPrussian said:
Move to the Isle of Man.
I did.
https://www.locate.im/relocating/uk/tax-and-ni/inc...
If you do, befriend a certain Mr Barrowman - he’s probably looking for someone to have a quiet pint with, and provides tax tips…I did.
https://www.locate.im/relocating/uk/tax-and-ni/inc...
Edited by TheDeadPrussian on Friday 19th January 16:02
RSbandit said:
Feel your pain and the tax burden in the UK is a p1ss-take at this point, that 6% rise in corp tax just ridiculous tbh.
The effective rate on corp tax and divs is more like 53% though as the div tax is applied to a net figure after corp tax...still over 50% of course which is just wrong. As another poster said if you are paying for a toy out of savings that were taxed a while ago it certainly feels a bit better. Personally I keep divs to a minimum with a view to claiming entrepreneurs relief 5-10 yrs down the road (I'm assuming it will still exist then).
ER only in the first million now, so hardly a huge benefit (guess if wife a shareholder you can double)The effective rate on corp tax and divs is more like 53% though as the div tax is applied to a net figure after corp tax...still over 50% of course which is just wrong. As another poster said if you are paying for a toy out of savings that were taxed a while ago it certainly feels a bit better. Personally I keep divs to a minimum with a view to claiming entrepreneurs relief 5-10 yrs down the road (I'm assuming it will still exist then).
Just make more money I guess. Not worth getting bothered about, nothing you can really do about it. Keep hammering the pensions. Always put max in each year before funding toys. That’s £120k this year between myself and my wife. The benefit in a few years compared to taking excessive dividends is massive and a 100% business expense. For many, the increase in the pension annual allowance this year could help offset the increase in CT.
IMO if you want to leave the country, off you go. Just as well some people contribute, makes my teeth itch to see the tosses like Rod Stewart whinging on about the NHS whilst skipping many years of tax at the height of his earnings.
It could always be worse I.E. living in Scotland and paying even more tax…..
Anyway probably a topic for a different section of the forum.
Ps though, you can apply the ‘oh a had to earn this much gross to pay for this” applies to everything of course
My £1.3m house actually cost £2.6m of gross earnings. Oh and then you add in interest payments and you realise it’s likely cost c£3.5m. You’ll drive yourself mad thinking about it so best just not!
Oaky said:
What does direct (income-type) tax have to do with how you spend your money? On cars or anything else? Is this just a tax rant?
I couldn't work out if it was a rant or a brag 
Personally I'm just miffed I'll have to pay any this year - bloody ERI and reducing CGT allowances.
I felt exactly the same as the OP.
My business allowed me to work anywhere in the world and with my kids now heading to Uni (reluctantly the time was right to leave the U.K.
The levels of petty crime and usual uselessness of our elected officials plus the recent (totally unfair) increase of corporation tax was the final straw for me.
It’s not meant as a brag and I have nothing but admiration for the people paying tens / hundreds of millions each year in tax - they must be wired up differently to me - and shame on me for bailing out of my responsibilities.
Simply feels unfair and wrong to give away over half your earnings which you have generated from zilch through determination and hard graft, when you taking nothing from the system you are paying for. I’m sure some will disagree and think me disloyal but I also think most people would do the same if they could.
My move was Dubai and south of France and 3 months in London and not a day longer. Works for me and couldn’t recommend it highly enough (ducks for cover…)
We need a flat tax rate in the U.K. / say 20% which everyone pays regardless of earnings. It will release lots of civil servants to fulfil their own potential in the private sector and raise far more tax revenue for the UK also.
Bin the ridiculous stealth taxes on property, ban people from wearing ballaclava’s in public, mandatory 10 year sentence for carrying a knife…..god I sound like Farage and I’m the son of an immigrant too..
My business allowed me to work anywhere in the world and with my kids now heading to Uni (reluctantly
the time was right to leave the U.K.The levels of petty crime and usual uselessness of our elected officials plus the recent (totally unfair) increase of corporation tax was the final straw for me.
It’s not meant as a brag and I have nothing but admiration for the people paying tens / hundreds of millions each year in tax - they must be wired up differently to me - and shame on me for bailing out of my responsibilities.
Simply feels unfair and wrong to give away over half your earnings which you have generated from zilch through determination and hard graft, when you taking nothing from the system you are paying for. I’m sure some will disagree and think me disloyal but I also think most people would do the same if they could.
My move was Dubai and south of France and 3 months in London and not a day longer. Works for me and couldn’t recommend it highly enough (ducks for cover…)
We need a flat tax rate in the U.K. / say 20% which everyone pays regardless of earnings. It will release lots of civil servants to fulfil their own potential in the private sector and raise far more tax revenue for the UK also.
Bin the ridiculous stealth taxes on property, ban people from wearing ballaclava’s in public, mandatory 10 year sentence for carrying a knife…..god I sound like Farage and I’m the son of an immigrant too..
It’s a first world problem rant. You have to be able to recognise that and laugh, grumble at yourself otherwise, as a previous chap said, you drive yourself nuts.
I gave myself two days cursing this week after talking with the accountant at the tax return being dbl what I expected. Given that “earnings” were roughly similar to last yr, you have your processes in place for a reason and then your accountant explains that HMRC want something different.
So you grumble. Grouse. b
h at the injustices of life. Whilst accepting this impacts the purchases of silly Italian things. Then you remember that they’re but for the grace of the flying spaghetti noodle monster, you could be/live in an entirely different situation.
The moral of story being - don’t waste your energy whingeing at the aholes in London, spend it on enjoying what you do/can have.
I gave myself two days cursing this week after talking with the accountant at the tax return being dbl what I expected. Given that “earnings” were roughly similar to last yr, you have your processes in place for a reason and then your accountant explains that HMRC want something different.
So you grumble. Grouse. b
h at the injustices of life. Whilst accepting this impacts the purchases of silly Italian things. Then you remember that they’re but for the grace of the flying spaghetti noodle monster, you could be/live in an entirely different situation. The moral of story being - don’t waste your energy whingeing at the a
holes in London, spend it on enjoying what you do/can have. FourCs said:
I felt exactly the same as the OP.
My business allowed me to work anywhere in the world and with my kids now heading to Uni (reluctantly the time was right to leave the U.K.
The levels of petty crime and usual uselessness of our elected officials plus the recent (totally unfair) increase of corporation tax was the final straw for me.
It’s not meant as a brag and I have nothing but admiration for the people paying tens / hundreds of millions each year in tax - they must be wired up differently to me - and shame on me for bailing out of my responsibilities.
Simply feels unfair and wrong to give away over half your earnings which you have generated from zilch through determination and hard graft, when you taking nothing from the system you are paying for. I’m sure some will disagree and think me disloyal but I also think most people would do the same if they could.
My move was Dubai and south of France and 3 months in London and not a day longer. Works for me and couldn’t recommend it highly enough (ducks for cover…)
We need a flat tax rate in the U.K. / say 20% which everyone pays regardless of earnings. It will release lots of civil servants to fulfil their own potential in the private sector and raise far more tax revenue for the UK also.
Bin the ridiculous stealth taxes on property, ban people from wearing ballaclava’s in public, mandatory 10 year sentence for carrying a knife…..god I sound like Farage and I’m the son of an immigrant too..
Dubai is all fun and games until you get locked up despite being innocent.My business allowed me to work anywhere in the world and with my kids now heading to Uni (reluctantly
the time was right to leave the U.K.The levels of petty crime and usual uselessness of our elected officials plus the recent (totally unfair) increase of corporation tax was the final straw for me.
It’s not meant as a brag and I have nothing but admiration for the people paying tens / hundreds of millions each year in tax - they must be wired up differently to me - and shame on me for bailing out of my responsibilities.
Simply feels unfair and wrong to give away over half your earnings which you have generated from zilch through determination and hard graft, when you taking nothing from the system you are paying for. I’m sure some will disagree and think me disloyal but I also think most people would do the same if they could.
My move was Dubai and south of France and 3 months in London and not a day longer. Works for me and couldn’t recommend it highly enough (ducks for cover…)
We need a flat tax rate in the U.K. / say 20% which everyone pays regardless of earnings. It will release lots of civil servants to fulfil their own potential in the private sector and raise far more tax revenue for the UK also.
Bin the ridiculous stealth taxes on property, ban people from wearing ballaclava’s in public, mandatory 10 year sentence for carrying a knife…..god I sound like Farage and I’m the son of an immigrant too..
garystoybox said:
RSbandit said:
Feel your pain and the tax burden in the UK is a p1ss-take at this point, that 6% rise in corp tax just ridiculous tbh.
The effective rate on corp tax and divs is more like 53% though as the div tax is applied to a net figure after corp tax...still over 50% of course which is just wrong. As another poster said if you are paying for a toy out of savings that were taxed a while ago it certainly feels a bit better. Personally I keep divs to a minimum with a view to claiming entrepreneurs relief 5-10 yrs down the road (I'm assuming it will still exist then).
IMO if you want to leave the country, off you go. Just as well some people contribute, makes my teeth itch to see the tosses like Rod Stewart whinging on about the NHS whilst skipping many years of tax at the height of his earnings. The effective rate on corp tax and divs is more like 53% though as the div tax is applied to a net figure after corp tax...still over 50% of course which is just wrong. As another poster said if you are paying for a toy out of savings that were taxed a while ago it certainly feels a bit better. Personally I keep divs to a minimum with a view to claiming entrepreneurs relief 5-10 yrs down the road (I'm assuming it will still exist then).
It could always be worse I.E. living in Scotland and paying even more tax…..
Have you lived there?
Zero crime and being able to be relaxed when out and about is liberating. Might be a poor choice of words from me there but that’s how I feel about it. Everyone knows the rules and what you can do and can’t. If you want to have sex in public or get hammered and start fighting - you are going down. And frankly - good.
The UK could learn lots from Dubai. All my opinion and if you don’t agree, don’t move there!
Zero crime and being able to be relaxed when out and about is liberating. Might be a poor choice of words from me there but that’s how I feel about it. Everyone knows the rules and what you can do and can’t. If you want to have sex in public or get hammered and start fighting - you are going down. And frankly - good.
The UK could learn lots from Dubai. All my opinion and if you don’t agree, don’t move there!
FourCs said:
Have you lived there?
Zero crime and being able to be relaxed when out and about is liberating. Might be a poor choice of words from me there but that’s how I feel about it. Everyone knows the rules and what you can do and can’t. If you want to have sex in public or get hammered and start fighting - you are going down. And frankly - good.
The UK could learn lots from Dubai. All my opinion and if you don’t agree, don’t move there!
It's rather less "liberating" if you value freedom of speech, workers rights, gay rights, democracy.Zero crime and being able to be relaxed when out and about is liberating. Might be a poor choice of words from me there but that’s how I feel about it. Everyone knows the rules and what you can do and can’t. If you want to have sex in public or get hammered and start fighting - you are going down. And frankly - good.
The UK could learn lots from Dubai. All my opinion and if you don’t agree, don’t move there!
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