Grayling

Ah.....but that doesn't give people a reason to gloat about the so called demise of the motherland.

G

bjohn

I'm not sure its a demise. Financial services is the UK's biggest industry and that's taken a battering at the moment. It will come back.

If you graph the $AU to $US and the $AU to £GBP its a very similar progression. Lots of outside influences going on here.

Amazulu

You've just got to push it as far as you can.
Everything I did was legal and above board.
IR35 was a joke - one (of many) of the worst Gordon Brown cluster f**ks and has been largely negated by skillful accounting (maybe accountants are worth something!)

MartinLuther

Push what? I just highlighting that you can get any result you want if you compare apples and pears.

chasmw

As someone who is moving to Oz next month, I hope we've reached the bottom of the downward curve! Positive thinking.....
http://www.ft.com/cms/s/0/694139b4-9...44feabdc0.html

chilliman

I'm with you on the move next month so am also hoping.

One consideration for the UK longer term ....

quantitative easing ... increased inflation ... increased interest rates!????

BAY

Yes it shows the true state the UK economy is in. Thanks Gordon, thanks Tony, its going to take years to repair the damage you've done. Maybe one day the people who voted for NuLabour will wake up and smell the coffee :curse:

mecheng

Does anyone really have any idea where it is is going to end up with so much uncertainty in the current economic climate. Personally, I'm not shifting anything over until it gets to the loftier heights of around 2.5, which means I should be waiting a couple of lifetimes.

Pommie Granite

I'm moving back early next year. Moved here a couple of years ago and exchanged at $2.50.
Stand to make over 100k pounds by moving back. This combined with the impending next leg down in the UK housing market, makes it too good an opportunity to turn down

renth

Good on ya! Even I have done a few sums and realise how much more house I could get in the UK compared to when I left. ...

hawkshaw

Well I pay much more tax here too, and I'm just an individual whose sole income happens ro derive from a UK occupational pension and a frozen UK state pension. This month my money came in at $1.92 to the £, so I'm suffering a hefty drop in income over even last year's.

btw I'm here because my wife is an Aussie, not because I had a rose-tinted view of an idyllic country.

MartinLuther

I guess pensioners who derive their income from UK schemes are worse off in Aus than in the UK (maybe?). That does not change the reality that overall, Aus has a lower tax take than the UK which was the point I made. I did not at any point assert that all people would pay less tax here than there. I'm not sure what point you, Grayling and Amazulu are trying to make. Are you trying to tell me that because you as individuals have managed to get yourselves into a situation where you pay more tax here than there, then Aus, as a whole, takes more tax than the UK? If so then I'm not convinced.

btw: I'm here because I love living here not because I have a rose-tinted view of an idyllic country. I loved living in the UK too and didn't have a rose-tinted view of it being an idyllic country either.

iamthecreaturefromuranus

Australia
$1 – $6,000 Nil
$6,001 – $34,000 15c for each $1 over $6,000
$34,001 – $80,000 $4,200 plus 30c for each $1 over $34,000
$80,001 – $180,000 $18,000 plus 40c for each $1 over $80,000
$180,001 and over $58,000 plus 45c for each $1 over $180,000

UK
Starting rate: 10% £0-£2,230
Basic rate: 22% £2,231-£34,600
Higher rate: 40% Over £34, 600

Again, exchange rates are effecting things, but for anybody really interested these are the current basic tax rates. On the whole I would say that looks like basic tax rates are higher in Australia, with a 30c in the dollar kicking in at what currently works out at about £17,000.

MartinLuther

You've been sucked in by the advertised rates. Now add 11% to the lower UK figures and 1.5% to the Aus lower figures. Add 1% to the higher UK figures and 2.5% to the higher Aus figures. Add in also LITO which means in Aus that you don't pay any tax if your earnings are below $14k and a different picture starts to emerge.

I used to have a spread sheet which gave a more realistic PAYE vs PAYG picture. I might update it later and see how it looks nowadays. I think it takes people by surprise when they realise they'e been suckered by the advertised rates. Others go into denial - but that's a different story.

MartinLuther

Okay here we go. I've updated the sheet with the following info.

Aus rates (up to)
$6000 - 0%
$34000 - 15%
$80000 - 30%
$180000 - 40%
above $180k - 45%

LITO fall off $30k - $60k

Medicare Levy Surcharge $100k

UK rates (up to)
£6475 - 0%
£43875 - 20%
above £43875 - 40%

NI lower = £110pw
NI upper = £844pw

Lower % = 11%
Upper % = 1%

Results
Notes:
This is a simple comparison of tax on income. It does not take into account deductable items or tax offsets in either country (except Oz low income offset).
Medicare included, including the high-earners medicare levy ($100,000 threshold)
UK tax would be lower if income is from savings
Calculations do not include any consideration of CGT which has complex tax rules in both countries.
I have not included employers contributions to super/pensions (currently 9% in Oz and 12.8% in UK)
Exchange Rate used = 2.00

So as a result of all that it looks like Aus income tax does not exceed UK income tax until you get to £95k/$190k. One consolation for higher earners in Aus is that most of the employers contribution is going into their future pocket whereas, in the UK, only a small percentage of the employers contributions would go into their future pocket. I reckon you'd still be better off.

Not sure about the pensioner one. Do they not pay NI in the UK? (I can't remember.) This would give then a huge tax advantage. I know they have higher tax free limits and possible access to a 10% band which would lower their UK tax take.