I got paid last week.
After paying out all my outgoings, I found that I had the usual amount left to live on and it really wasn't much.
I wanted to know ask one of you to help me come to terms with the following so I really hope the experts among you can jump in and justify the following.
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Day 1
My wage slip arrives at my desk and the money went into my account.
Before I have even spent a penny of it, the Government has taken two cuts from me and one from my employer.
1/4 of my wage is gone before I even see it due to Income Tax and National Insurance
1/10th of the total is paid by my employer directly to the Government as Employer's National Insurance.
Day 2
I start to pay my outgoings.
Each month I pay for the following:
1 iPhone - £25
TV License - £12.13
Electricity - £60
Broadband - £12.50
XBox Live - £3.33
Travel - £318.80
Phone line - £13.50
Rent - £500
Council Tax - £167
I am then left with what little 'spending money' there is.
Day 3
I go through the next month, counting down the days to my next pay day so that I can repeat the above.
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Now, I have worked since I left school at 18 so taxation is nothing new to me but until now, I had only thought of tax as being the deductions on my payslip each month. I had failed to view the bigger picture.
Let's look again at the figures above and how much tax I actually pay.
For this, we shall assume that my wage is £30,000 a year. I wish it was as high as this is just to give a total we can work with that allows me to not have to go into detail on my actual wages.
By using the tax calculator at Listen to Taxman, the break down is as follows:
£2500 Gross Pay
£375.42 Income Tax
£227.72 National Insurance
My employer would also be paying £263.67 in Employers National Insurance
This would leave me with a total of £1896.86 to play with for the month
The total monthly deductions above are £1112.26
Once they are paid I would be left with £784.60 a month that would be classed as mine but we will come back to this later.
Going back to the deductions, the things that have me paying VAT are my iPhone, Electricity, Broadband, XBox Live and my Phone Line and the total is £22.87
I count all of my tax as Income Tax, National Insurance, Council Tax, VAT and the TV License since these are all things I have to pay for by law that the Government has a hand in, my total from my wage and my outgoings is £805.14 in taxes before I get to day 3 above.
Going back to the £784.60 a month I would have to live on. Across a month, this equates to about £186.80 a week which is more than enough to get by on but we then need to look at how else I can be taxed on it.
VAT is not applied to most supermarket purchases but here is a list of the things which do carry a charge:
Beers, wines and spirits Fruit juices Bottled water
Carbonated drinks Greeting cards CDs andDVDs
Pet food Cigarettes Petrol
Clothing Potato crisps Confectionary
Stationery Cut flowers and plants Toiletries
Electrical household goods General merchandise
From this and based on my receipts for the previous month which I won't show my working on, I spent a further £54 in VAT
My place of business has a canteen and vending machines too and all purchases from these carry VAT so across the month I spent a further £22 in VAT
My total in taxes so far is £881.14 once I have fed myself for the month.
I don't have a car but if I did, I would have to add Road Tax, MOT and Insurance prices to the above. I would also factor in the overall VAT cost of the car based on it's life as well as petrol and breakdown cover. I would count both the Insurance and MOT as tax since you can't actually get Road Tax without both hence you have to pay it by law and the Government has a hand in it.
If I smoked 20 a day then I would add £217 to my deductions above based on £7 a day as well as all of the taxes associated there in.
To summarise, my gross pay was £2500, my NET Pay was £1896.86, my total after my usual deductions was £784.60 - when my next pay packet hits, I would have paid the Government on average £881.14 in taxes across the month. If we add on the Employers N.I. then I make the Government £1108.86 a month.
This is based on a 30 year old man who doesn't drive or smoke and who earns £30,000 a year (which I do not)
With what little I have left each month, what am I to do with it?
Should I invest it?
I am not going to go into detail as to how little a burden I am on society and how I am getting a bum deal on the above, I guess I will just sit patiently and look forward to my state pension when I am 66. Of course, living in Glasgow, I doubt I will live that long.
If we step outside of the individual element and instead look at where my money goes a nightmare cycle of taxation occurs.
Everything I buy leads to profits for a business who in turn pay tax on dividends, corporation tax, employers N.I., rents, rates, import tax and wages which in turn leads to PAYE tax for employees.
Every tax I pay leads to wages for the rather alarming number of Civil Servants we have here in the UK.
When I pay my rent, my landlord has to declare it as well as having to pay other taxes such as landlord registration which again leads to more tax.
Every one involved above will then start their own cycle of taxation when they receive their wages/payments and then pay their bills and taxes.
In summary of the above, I guess what I am saying is that I do not believe that the majority of those living and working in the UK have any claim to any money whatsoever. We are instead just moving money around at all times and every time it changes hands, the Government has a new excuse to take a cut.
As a result, while we are not just being born to consume, we are being born to fund our Government with every action we choose to take that involves any kind of spending.
In fact, the only person who is truly exempt from this is The Queen who is someone that takes our tax money and in turn pays tax on a voluntary basis.
Fitting no?
Given that I have no recollection of a Government actually making moves to cut tax on it's populace (if you count the reduction of VAT to 15%, I think the subsequent increase to 20% balances that out), why are we standing for cuts to our Police Forces, the proposed destruction of the NHS and the tuition fees controversy?
In my example above, the Government make over £1100 a month from me and that is not counting how my other purchases inevitably turn into tax. Given that I earn less than £30k a year yet still have the outgoings I have above, the real truth would shock you yet my actual personal outgoings are nothing compared to the taxes I pay.
Why don't you work out how much they make from you and then post it below?
Everything I buy leads to profits for a business who in turn pay tax on dividends, corporation tax, employers N.I., rents, rates, import tax and wages which in turn leads to PAYE tax for employees.
Every tax I pay leads to wages for the rather alarming number of Civil Servants we have here in the UK.
When I pay my rent, my landlord has to declare it as well as having to pay other taxes such as landlord registration which again leads to more tax.
Every one involved above will then start their own cycle of taxation when they receive their wages/payments and then pay their bills and taxes.
In summary of the above, I guess what I am saying is that I do not believe that the majority of those living and working in the UK have any claim to any money whatsoever. We are instead just moving money around at all times and every time it changes hands, the Government has a new excuse to take a cut.
As a result, while we are not just being born to consume, we are being born to fund our Government with every action we choose to take that involves any kind of spending.
In fact, the only person who is truly exempt from this is The Queen who is someone that takes our tax money and in turn pays tax on a voluntary basis.
Fitting no?
Given that I have no recollection of a Government actually making moves to cut tax on it's populace (if you count the reduction of VAT to 15%, I think the subsequent increase to 20% balances that out), why are we standing for cuts to our Police Forces, the proposed destruction of the NHS and the tuition fees controversy?
In my example above, the Government make over £1100 a month from me and that is not counting how my other purchases inevitably turn into tax. Given that I earn less than £30k a year yet still have the outgoings I have above, the real truth would shock you yet my actual personal outgoings are nothing compared to the taxes I pay.
Why don't you work out how much they make from you and then post it below?
