The way the "comment from the editor" is written ("Unfortunately, in England, higher salaries will mean higher tax rates." and "England's tax brackets can be slightly confusing") make it sound like this is not commonly how it works in other counties.
Could anyone tell me about how this differs from where you are?
If I explain to the same people that I use a spreadsheet for all my daily transactions I am looked at like I’m some kind of weirdo.
Of course, there are always edge cases, and the government has deliberately made some areas a mess (case in point: contractors); but the base use case of standard salary is insanely simple. And, for our American friends, the NHS is included.
"Unfortunately, in England, higher salaries will mean higher tax rates. Data released late in 2020 showed that Londoners contribute to nearly 30% of the country's capital gains tax"
??? Either the author mistakenly wrote capital gains instead of income, or they were just citing something completely irrelevant to the discussion.
Regarding the "confusing progressive tax rates", I agree with you. "Most systems around the world contain progressive aspects." [0] And a look at "tax rates around the world" shows most countries have higher marginal tax rates for higher incomes [1]
[0] https://en.wikipedia.org/wiki/Progressive_tax#Examples [1] https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates
0-£12,570 (0%) £12,571-£50,270 (20%) £50,271-£99,999 (40%) £100,000-£125,140 (60%) £125,141-£150,000 (40%) £150,001+ (45%)
The 60% arrises because your personal allowance is reduced by £1 for every £2 you earn over £100,000 until is disappears entirely.
https://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom...
And here's a chart to go along with it to show where people fit along the X axis:
https://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#/...
And even that isn't quite the whole story, because you'll also lose certain child-related benefits starting from £50K if you have kids, so your effective rate for the next £10K or so can work out much higher than 40%.
Then there are the effects of not-unusual things like pension contributions and charitable donations, which can move things around a bit more.
It's hardly a surprise that people find the system confusing!
Also if you pass a certain income threshold you're required to fill in your own tax return anyway.
That is correct. However, HMRC sends you a letter with every tax code change, which is calculated and posted automatically; I've once received two separate letters, with two different tax codes, sent literally one day apart from each other. :D
And if you feel that you tax code is incorrect it is very easy to check your online HNRC account and correct any information they might have.
The most commonly used salary calculator [0] does a good job of taking all of that into account, so you can clearly see all three actual figures.
For some reason this isn’t common practice. I’ve always found it weird that salaries are quoted in gross amount.
In some cases the round number may not be the “net” amount because eg maybe you have some rental income, or income from last year, moved to a new state, etc. But in most cases it’ll be pretty close.
Most people never interact with capital gains tax in their lives.
This used to be an easy way to minimise tax, although now it's a more complex calculation. And HMRC have to be persuaded that you really are freelance, and not just a long-term contractor working on-site.
There other semi-legal dodges including companies which loan you your income - minimal tax - and then for various more or less credible reasons the loan is written off and never has to be repaid. HMRC usually take a while to catch to these kinds of schemes. But short term gain can lead to long-term pain because if they're ruled unlawful HMRC can claw back tax retrospectively.
I moved out of the UK a few years ago, and while there's a lot to dislike - which is why I moved - the tax laws are fairly generous to one-person small businesses. Brexit has now massively complicated this for anyone selling internationally, but UK B2B is not so bad.
The total number of countries (50) only matters if you're using relative terms, like "most".
In the middle of the desert outside of a population center, one might call a group of 6 people "many", but one would never use the same term to refer to 6 grains of sand.
50 countries is stretching it, isn't it? TBH I meant EU (27), but I don't even know what are all the 23 other?