After running under the radar for over five years, the 60p stealth tax has now been thrust into the spot light. More than 500,000 professionals are affected by the 60p tax, which was introduced by the previous labour government. The tax affects those earning between £100,000 and £120,000, and basically means that for every extra pound earned in this bracket, 60p has to be paid in income tax. This absurd tax is penalising middle class professionals, and here’s why:
|Up to £100,000||40p|
|£100,000 to £120,000||60p|
|£121,000 to 150,000||40p|
Those earning between £100,000 and £120,000 lose their tax-free personal allowance, which therefore means they have to pay a higher rate of tax instead. However, this does not seem to be an adequate enough explanation, considering that people who fall within this bracket have to pay a third higher tax rate than those earning considerably more than themselves.
The labour government introduced these changes, yet the coalition is also being blamed due to them making no attempt to rectify this inappropriate tax rate.
This is yet another area where middle class professionals feel they are being targeted. It is important that people are aware of the different salary brackets and the tax that applies. This way there will be no nasty surprises and adjustments can be made accordingly to ensure that you are getting the most out of your money.
I am interested to hear your thoughts on this, please use the comment board below to air your opinion.