MartinLuther

Do you think (or perceive) that Aussie Tax is higher, lower or the same as UK tax?

BadgeIsBack

My perception is that there is not much in it. Both systems have followed a long running trend to attempt to put the dollar in your pocket through much flouted cuts (which helps everyone - even if some proportionately benefit more than others). This may put up inflation though.

Think back to the 80s and how much more tax people paid then. I'm guessing it was the same in Australia.

GinaUK

My perception is that it is lower.

The income tax rates are roughly the same. But there are no National Insurance contributions to pay. Or rather, Medicare is only 1% whereas NI is 11% plus.

GST, the Australian version of VAT is also less. There is also much less tax on petrol.

Gina

P.S. There wasn't an option in the poll to vote for thinking that Aus tax is lower than UK tax. Therefore I didn't vote.

Geelong Gent

Stamp Duty!!

Bix

That would be option two = UK tax is higher.

Wakey wakey Gina

spartacus

Agree with Gina. Feels lower all in all.

Direct taxation roughly the same, indirect taxation less here.

No tax on petrol (QLD), lower coucil 'tax'.

Andy

TJUK

I have just been looking thro' the ATO website and found a document that has pleased me and probably many other servicemen and women. The ADF can claim back "heaps" more than tax than what we could with the British Services.

NedKelly

Don't forget the employer also has to stump up more NI as well. Another 12% odd, whereas in Oz the employer pays an extra 9% but that is yours to keep in a pension fund.

Then there are all the other stealth taxes in the UK.

MartinLuther

There's a few interesting points here.

Typically the OECD reports Aussie tax as being about 31-33% of GDP and the UK as 36-38% of GDP.

A lot of people don't seem to see NI as a tax. When labour came to power in 1997 they promised not to raise income tax rates. They did however introduce a 1% NI charge that was on the whole of the employee's salary. This, for PAYE employees, is effectively the same thing. For those that don't pay NI or pay a reduced NI contribution, the UK tax in most cases will be lower.

A lot of people see the 9% Employer Super Contribution as a tax. Although this 9% is taxed slightly (at 15%) it is an actual payment to the employee, albeit one that they will get in the future. With the UK equivalent (the 12.8% of salary over the tax free threshold) some of it will be returned in the future but how much you get back is not linked to how much you pay in. Most people don't think about the UK Employer's contribution as it goes into the goverment's pocket rather than their own. The upshot of all this is that most people see a tax where there isn't one and don't see a tax where there is one.

A lot of people see the $6000 tax free limit and think that's a lot lower than the UK's £5k (approx). However most people know nothing of the low income tax offset which means that you can earn up to $11k before getting taxed at more than the 1.5% medicare rate. Still not as good as the UK but not as bad as some perceive.

As most people have suggested indirect taxation is lower in Aus (even with the addition of stamp duties). Some of the stamp duties have a UK tax equivalent (e.g. insurance stamp vs insurance tax). It is worth noting that the two largest costs for most households (mortgage payments and food bills) are relatively (but not completely) free of indirect tax in both countries.

Ultimately the lower tax in Aus is to some degree offset by higher school costs and health costs. However I'm happier to have more control over my money.

spartacus

Very good points. Especially the last as that's how it feels to me also.

GaryKristensen

Can you post a link please as I am moving over to the ADF (Army) on 13th November and will be interested to have a read of it.

Ta in advance.

Gary

Amazulu

For me tax is definitely higher here but taxation is falling in AUSTRALIA and rising in the UK so this will change in the future.