Baadil

Hello there,

Just wanted to give your guys an update on the move and ask you a few questions.

We moved back in August and so far it has been a much easier move than I expected. I am loving being close to family and kids are enjoying themselves as well. They have joined a really goos school and are on their way to success (1st grade and nursary :-) ) My job is going well as well (same company I had in the UK but working as a UK employee here in the UK office). Mrs. is settling well as well, just busy in opening boxes.

Now on to my question... I seem to be a bit disappointed how much attention is given to umemployed while nothing for employed individuals. I am a hard worker and will probably never sit on government money like most in the UK. What really bothered me was that my kids had lower status on the school waiting list than the ones on the benefit. WTF?

My question... I currently make around 45K. Excellent salary by a lot of standard here in the UK. My take home is not much after the taxes and pension but I am happy with it. In my work field, I have the potential to grow and make as much as up to 80K but for some reason I do not see any insentive to get there. First, taxes go higher and net pay isn't that much different. My benefits also are non-existant. As a matter of fact I have to pay for almost everything, unlike people on benefits. Another issue I have is that I am a US citizen as well so if I make any more than what I make now I will probably end up paying taxes over in the US as well. Back to same net pay (or close it) what I make now.

Where is my incentive to work harder?

Thanks for listening to my rambling...

MsElui

personal pride? I always try and do my best and ive usually been rewarded. Not always salary or promotion but in allowing me to do more of the things tha interest me, or go on training courses to learn new skills or update old ones, or try a new role on secondment (ie team leader) etc.

Its not always about working harder - but working smarter. It also depends on if you are happy doing the daily things you do now. If you would prefer to do another job in the same firm or your managers job etc (either because its more fullfilling or you think it would be a change, or that you would just prefer it - then you will have to show them why you should get it over anyone else

JAJ

You still have the NHS, don't you? And child benefit?

British taxes are generally higher than U.S. federal taxes and you can offset your British tax against U.S. federal tax. As far as income tax goes, you would normally only have to pay extra to the U.S. if your American tax was higher than British tax.

Some "tax free" investments in the U.K. are not tax-free as far as the United States is concerned (and vice versa), so this is one aspect to consider for your savings.

As for the rest of what you say, many things have changed in the United Kingdom since the mid 1990s, not all for the better. That said, if the community around you is a good place to be, then the wider state of the nation should not be as much of an immediate problem. Things may improve under a different government and if they don't, then as long as you and your children have your American citizenship there is always somewhere else to go if you do change your mind about where you want to be.

lobby lou

the harder u work the more u r paying back xxx
my 18 yr old has just come back from 2 weeks in uk ......3 of her old friends have babies /free houses/etc etc ........their parents had to sign for their houses as they were not yet 18 and they were given 3 beds as so young they would have more kids!!!!!!!!!why do they need to work when itss handed them so easy!!!!!!!!:curse:

islandergirl

I haven't got UK tax experience but surely there are ways to improve your financial lot without taking the tax hit.

Can you package a vehicle, or a computer for example?
What about investments like ISA's etc, putting more into the pension.

Sounds like you need to go and see an accountant and get some decent financial advise on the best way to structure your income.

Also I don't know anyone who pays 100% tax on their income, even if you take home a smaller proportion it is still worth getting a raise.

backagen

My salary has gone up from $27,500 to well over $65,000 in the last 6 years (due to changing jobs and promotions) and I now pay 40% tax instead of 30%.

Am I better off? Well obviously yes!

$27,500 less 30% = take home pay of about $19,250
$65,000 less 40% = take home pay of about $39,000
so I have a higher tax rate yes, but about double the 'real' income.

This is in Australia. I may be wrong but I just looked up UK tax rates and it looks like if you earn anything over 34,600 you pay 40% tax, so therefore surely you wouldn't pay a higher rate of tax if your income was higher because it appears that you're already in the highest tax bracket now.

http://www.hmrc.gov.uk/rates/it.htm

Baadil

Thank you everyone for your responses.

Well, I used a calculator and here is what I came up with.

- 8% to Private Pension

Gross: 45,000 Net:28,292
Gross: 55,000 Net:34,000
Gross: 60,000 Net:36,570
Gross: 80,000 Net:46,770

I did not see any difference showing for Married,Unmarried,w/Children. Does it not make any difference on your taxes?

crystal23

On 45K pounds you would be entitled to apply for Child tax Credit. The upper limit WAS 56K ish pounds but might be more or less now. I'm not up to date with the tax stuff in the UK. You will also get Child Benefit which is universal regardless of what you earn.

Personal Tax Allowance was around 6K pounds before any tax is paid. Again not sure what it is now.

I Know this sounds vague but my tax was complicated as I got paid partly in foreign currency so alot of the tax rates didnt apply for me in the UK.

Worth you checking out the UK tax website though and the CTC.

Edited to add just seen your last post. Married mans tax allowance was stopped years ago so marital status doesn't matter. That's why the CTC was brought in.

Bevm

I'm assuming that the higher rate, 40%, applies on income over 27,500, not on the whole income?

Bev

JAJ

For income tax, that is correct. And there is also a personal allowance.

Cape Blue

What justification do they give for giving your kids a lower status? What does it actually mean?

backagen

I completely agree with you on the unfairness of giving kids with parents on benefits a higher priority. That is completely unfair and doesn't make any sense at all (except maybe in a "politically correct" kind of way. Absolute stupidity.

Baadil

I guess it is all about PC. People on benefits are 'poor' and they need all the assistance they can get. To be honost, I am not trying to knock them down. God forbid I may need the same help some day but having said that, you would think they would give priority to working couples. On school waiting lists, kids on benefits get priority which does not make any sense to me. you would think kids of working parents would get priority or at least equal rights as an insentive for them to keep working.

TruBrit

so have you asked the school head "why this is" and if they don't know ask who you can contact who will know...your MP for one? (I'm pretty sure I know what you're thinking but you can but ask) ... it doesn't hurt to have your voice heard.

Baadil

It was about 6 weeks ago when we were told this information. Unfortunately, we did not ask the questions you posed as we had recently moved and were a bit stressed. Later, they realized that we live10 homes away from the school so they gave us space for kids.