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This is a really easy Maths question - economics related?
On the ITN news this evening, the news reporter asked us to feel sorry for the high earning tax payers as they have to pay 50p in the pound. The example they gave was out of £150,000.00 a person would pay £54,000.00. That seems more like approx 33p in the pound to me. Of course, I know enough about PAYE to know that Tax is only charged after a certain percentage of your income. I also know that a good accountant could easily bring the drastic 50p which really equates to 33p down considerably as if you can afford a good accountant, legal tax dodges are a breeze.
Could someone please tell me if my maths is wrong??
1 Answer
- Diapason45Lv 79 years agoFavorite Answer
It isn't all a matter of fiddling the tax return or paying a crooked accountant to do it for you. Everyone is entitled to a personal allowance before tax is assessed. In addition, memberships of professional bodies are allowed against tax; and these are very likely to be substantial for big earners. Institute of Bankers, Institute of Directors, Institute of Chartered Accountants; maybe some charitable societies such as Royal Society of Arts, Friend of the British Museum and British Library, Royal Academy, Thomas Coram Foundation, National Trust and so on. These can mount up to tens of thousands every year and they are not a fiddle. They are real expenditures and are allowed against tax - and they enable important worthwhile charities to continue their work.
Also, some everyday expenditures are allowed against income if they are a requisite for the job or in support of pro bono work for a charity. This could include new formal business clothes [for men and women], computer hardware and software, travel, some hospitality and such like.
Does that give you some ideas?