HMRC Tax Calc The Inland Revenue’s latest on-line tax calculator fell flat on its face when it was launched last week – swamped, no doubt, by starving millionaires desperate to know how much their 5 per cent tax cut was worth. HMRC Tax Calc iOS app HMRC Tax Calc iOS app Quick input and summary calculation And even when it was up and …
That marginal rate of 32% does not include Employers NI which is money that the company pays to the state on behalf of the employee instead of using it elsewhere such as paying it to the employee. So it's effectively part of the tax grab. That takes it up closer to 40% for basic rate tax payers.
Ancient Oracle, perhaps you're the one showing naivety. We work so we can have goods and services. We use money so that we don't have to barter. The basic process is work - get stuff. The point is, how much of the stuff goes to the government, and how much does the worker get? You must include all the taxation points. The marginal rate is indeed 40% or so. But it's worse than that; when you buy your goods and services, there's 20% VAT to be paid. So in fact, the marginal rate at which the government taxes the benefits of your work is not 40%, but 52%.
Oblige employers to quote pay net of all taxes in job advertisements. Since they would probably have to work out the net amount on the basis that it might not be your only job, then you might even end up with more than you thought (unless the tax system was reformed, but that is another argument for another day).
I think of my salary as £17 000 p.a., because that is how much of it I get for myself. I don't really care about what the taxman takes, as long as I get something. It's enough not to have to decide each night anymore whether to catch the bus home, walk home and have the fire on or walk home and eat -- those are days I don't miss.
The only problem is that net pay depends on things like tax rates and tax code. I suspect it would be even more confusing to be told that the net pay is £17,000 pa only to find that because your tax code has been reduced, e.g. underpaid tax in a pevious year, you only get £16,000.
Sorry, but I think that would be a rather daft idea - simply because there are so many variables.
By quoting gross pay, it's known. No guessing about what assumptions they made etc, gross pay is gross pay.
Knowing that, anyone can work out what **their** net pay would be - taking into account all the variables as they apply to them. It's not like there's a a complete absence of websites where you can fill in a few numbers and it'll work it out for you.
In any case, you can do a very quick estimate very simply if you have a baseline to work from. Say you are looking at a job which pays £k/yr more - marginal tax rate is 32%, or near enough 1/3. So of that £3k you'll get to keep about £2k/yr. £2k/12 is about 1k/6, or about £160/month. So add 160 to whatever you take home now, and that would be about what you'd take home with the new job.
And the only "tax figure" you need to know is the marginal rate - near enough 1/3 until you are earning well in excess of £40k/yr.
(Based on the Android version)
* Doesn't show your monthly income (yes I can use a calculator but how hard is for the app to x/12 the result?)
* Doesn't allow you to specify your tax code (so it gives me a higher gross income than is reality)
I'll stick with ListenToTaxman thanks.
The problem with the app is not that it isn't comprehensive, nor that whatever it cost to produce was four times what it should have, as the total cost was a very small drop in a very large bucket.
The problem is the underlying approach to expenditure which this app represents. It is another form of vanity publishing which one can find throughout sectors spending other people's money. Do they ever ask themselves the question "if it were my money, would I use it in this way?"
For example, a better calculator has long since been available here:
http://www.moneysavingexpert.com/tax-calculator/ and it didn't cost the taxpayer (including the ones that didn't want it in the first place) anything.
The Treasury expenditure options appraisal requires proper consideration of "do nothing" not that you'd notice.
And of course the IT crew would not be able to self-actualise at our expense by producing apps for the iPhone
> Back in January, I was utterly traumatised by the task of filing my tax return on-line for the first time,
Just for info and for anyone else leaving it to the end of Jan: you don't have to PAY when you file. So file online as soon as you are ready and have all the info to hand. Do this at your leisure, stress free, non-traumatised etc. (Don't worry if something changes: you can go back and make an amendment.)
Then pay in January (by cheque or bank transfer). (Or was it the amount that left you traumatised?) ;-)
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