I haven't seen this reported in this form anywhere but consider this.
If you are an earner making £49,995 you are on your standard 40% tax for the upper end of your earnings.
Now if you got a pay rise of £500 then the next year you will loose 40% of that to income tax (ie £200), ok fair enough that is how life is I suppose.
But now you will also loose 1/12 of your child benefit allowance, If you have two children that works out at £143 pounds in the year so you will therefore receive £157 of the £500 pay rise that you were awarded.
That is the equivalent of being taxed at 69% (to round it up).
That is absolutely astounding!!!!!!!!!!!
If you are an earner making £49,995 you are on your standard 40% tax for the upper end of your earnings.
Now if you got a pay rise of £500 then the next year you will loose 40% of that to income tax (ie £200), ok fair enough that is how life is I suppose.
But now you will also loose 1/12 of your child benefit allowance, If you have two children that works out at £143 pounds in the year so you will therefore receive £157 of the £500 pay rise that you were awarded.
That is the equivalent of being taxed at 69% (to round it up).
That is absolutely astounding!!!!!!!!!!!
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