Childcare is one of the many, many problems triggered by an £100,000 salary. Taxation goes bizerk at £100,001
Read this from the Telegraph
Hunt knows, Reeves knows.
Quote:
At £100,000, families do not only lose their entitlement to free childcare worth up to £14,500 a year for someone with two children outside of London, and £20,000 in the capital.
They are also hit with a marginal rate of 60pc tax, because after reaching six figures staff start to lose the personal allowance, the sum you can earn each year without paying any income tax, at a rate of £1 for every £2 of pay until it disappears at £125,140.
In an attempt to beat the system some staff are shortening their working weeks, realising they would keep more of their pay by earning £92,000 as opposed to £115,000. Others are shunning promotions or turning down work.
Given that the median salary for full-time employees in the UK was £34,963 last year, few will have much sympathy. There’s an argument that well-paid employees shouldn’t be able to game the system in order to still access taxpayer-funded childcare perks.
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