IFISAcava
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Post by IFISAcava on Jan 3, 2019 14:55:01 GMT
Given the level of responsibility, stress and skill required for some jobs in the medical field a salary of 150k+ is probably very reasonable. The government should do something ASAP if the tax system is discouraging people from working. There aren't that many on £150K plus salaries, that's rare - basic NHS consultant salary only reaches £100K after 20 years as a consultant (and that's after 6 years medical school and at least 8 years speciality training, usually more). To get over £100K you need to do extra hours or get clinical excellence awards for doing extra duties above and beyond the normal. And it's the pensions distorted taxation that gives these 70% plus marginal rates (and sometimes over 100%) that mean it is not worth working extra and often is better to work less. Government knows but either doesn't care or has that little B word slightly more on its mind at the moment.
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cb25
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Post by cb25 on Jan 3, 2019 14:58:40 GMT
So basically fix the shortage of staff and multiple unfilled posts and you can get on yer bike and we won't care if you work the extra day or not  Good luck with that! Oh yes, and that's precisely the attitude that the government has been giving towards NHS staff and why they now can't fill the posts in may areas/fields. Governments of both persuasions never fail to amaze me with their handling of tax. They look at a position - say with individuals - and say to themselves "there's lots of money there, we'll change the rules and tax some (more) of it". They never ask themselves "how will the individuals respond?". Nearly every time, governments end up with less of a tax take than expected as people move their money elsewhere and/or change their behaviour.
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Post by bracknellboy on Jan 3, 2019 15:08:24 GMT
My heart truly bleeds for all these poor unfortunate souls on over £100k a year... Grow the hell up life isn't all about you and your bloody pension contributions. Maybe grow a little empathy and humility while you're at it! It's not about that - few in the NHS lack empathy. It's about what people do when you tax them at rates of 70% plus. They stop working, and enjoy their free time, and hence contribute less to the exchequer. Empathy doesn't pay the bills. Pointing something out doesn't mean someone thinks it's all about them. and potentially then cause resources shortages in highly skilled jobs which by definition are the hardest to replace and with the longest lead time.
But that is not necessarily then about absolute tax rates, it is about marginal tax rates, (to come back to an earlier yangmills post) and consequences of them, unintended or otherwise. Tapering of pension tax relief is one example of that. Of course those earning > £150k are very fortunate (as well as probably hard working and sacrificed a lot to get to that point). So it might seem obviously fair for them to be subject to loss of pension tax relief. However, if the outcome of that is for many to conclude that they should reduce their earnings and hours as a consequence, that has impacts (as well as reducing the benefit to the exchequer of the tapering in the first place).
Arguably LTAs can have a similar unintended consequence.
The more complicated tax systems are, with more gotcha's, the more they result in behaviours you weren't actually looking to incentivise.
EDIT: Some of these points made by others while I was dithering writing my post.
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scc
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Post by scc on Jan 3, 2019 15:15:47 GMT
Given the level of responsibility, stress and skill required for some jobs in the medical field a salary of 150k+ is probably very reasonable. The government should do something ASAP if the tax system is discouraging people from working. At the moment, if making sure everyone is working to max is the goal then there are perverse incentives at both ends of the income scale. I know plenty who have optimised their work to max out tax credits for the least amount of hours worked. Perhaps it is better if more people are working fewer hours because then it creates roles for others to fill as well as give everyone a better work life balance. I have often wondered if it was deliberate eg as part of a transition to work-less society enabled by automation and AI. It also opens up broader questions - who decides what an appropriate amount of work for an individual is? Why isn't it seven days a week, or one? Why split it up on a weekly basis anyhow? It all seems fairly arbitrary.
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macq
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Post by macq on Jan 3, 2019 15:22:56 GMT
may not be relevant to the ongoing discussion plus other taxes like insurance tax etc have been created but its not that long ago the normal tax band was 33% so be careful what you wish for
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IFISAcava
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Post by IFISAcava on Jan 3, 2019 15:28:19 GMT
It's not about that - few in the NHS lack empathy. It's about what people do when you tax them at rates of 70% plus. They stop working, and enjoy their free time, and hence contribute less to the exchequer. Empathy doesn't pay the bills. Pointing something out doesn't mean someone thinks it's all about them. and potentially then cause resources shortages in highly skilled jobs which by definition are the hardest to replace and with the longest lead time.
But that is not necessarily then about absolute tax rates, it is about marginal tax rates, (to come back to an earlier yangmills post) and consequences of them, unintended or otherwise. Tapering of pension tax relief is one example of that. Of course those earning > £150k are very fortunate (as well as probably hard working and sacrificed a lot to get to that point). So it might seem obviously fair for them to be subject to loss of pension tax relief. However, if the outcome of that is for many to conclude that they should reduce their earnings and hours as a consequence, that has impacts (as well as reducing the benefit to the exchequer of the tapering in the first place).
Arguably LTAs can have a similar unintended consequence.
The more complicated tax systems are, with more gotcha's, the more they result in behaviours you weren't actually looking to incentivise.
EDIT: Some of these points made by others while I was dithering writing my post.
It's even worse with defined benefit pensions because you don't know what your tax liability will be until afterwards when any CPI and pay increase has been decided, and you can't control how much your deemed pension accrual actually is because it is an all or nothing scheme - unlike a defined contribution scheme where it is easier to simply contribute a pre-defined amount or £x. Also, the tapered pension relief had to be paid back in hard cash which meant a £13.5K lump sum to the government at year end. Add to that the fact that the actuarial calculation on the pension benefits at the beginning of the noughties that led to a near tripling of pension contributions to almost 15% for higher earners did not take into account this increased taxation, which has led to many higher earners opting out of the NHS pensions scheme, which makes that scheme less viable as the higher earners contribute the most to it, and hence the employer (i.e. government) has had to increase contributions!
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cb25
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Post by cb25 on Jan 3, 2019 15:33:07 GMT
Given the level of responsibility, stress and skill required for some jobs in the medical field a salary of 150k+ is probably very reasonable. The government should do something ASAP if the tax system is discouraging people from working. It also opens up broader questions - who decides what an appropriate amount of work for an individual is? The individual?
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scc
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Post by scc on Jan 3, 2019 15:36:14 GMT
It also opens up broader questions - who decides what an appropriate amount of work for an individual is? The individual? I agree, but society seems to think otherwise and those expectations seep into all of us.
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coop
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Post by coop on Jan 3, 2019 15:42:05 GMT
So basically fix the shortage of staff and multiple unfilled posts and you can get on yer bike and we won't care if you work the extra day or not Good luck with that! Oh yes, and that's precisely the attitude that the government has been giving towards NHS staff and why they now can't fill the posts in may areas/fields. Not sure I follow you on this one... My point is the govt should be doing all they can to fill the void - this includes higher pay, and better/cheaper/free access to training and education. If the govt were actually doing this then the issues around taxation for higher earners would be less of a big deal to the NHS - if we had adequate Doctors we wouldnt be having to ask them to do so much overtime and extra shifts! There are two issues here and I think the more pressing one is the lack of new recruits and this is as a direct consequence of govt policy, eg. making nurses pay for their own training despite us having a massive shortage!
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Post by bracknellboy on Jan 3, 2019 15:43:00 GMT
and potentially then cause resources shortages in highly skilled jobs which by definition are the hardest to replace and with the longest lead time.
But that is not necessarily then about absolute tax rates, it is about marginal tax rates, (to come back to an earlier yangmills post) and consequences of them, unintended or otherwise. Tapering of pension tax relief is one example of that. Of course those earning > £150k are very fortunate (as well as probably hard working and sacrificed a lot to get to that point). So it might seem obviously fair for them to be subject to loss of pension tax relief. However, if the outcome of that is for many to conclude that they should reduce their earnings and hours as a consequence, that has impacts (as well as reducing the benefit to the exchequer of the tapering in the first place).
Arguably LTAs can have a similar unintended consequence.
The more complicated tax systems are, with more gotcha's, the more they result in behaviours you weren't actually looking to incentivise.
EDIT: Some of these points made by others while I was dithering writing my post.
......- unlike a defined contribution scheme where it is easier to simply contribute a pre-defined amount or £x. .....
Oh if only it was that simple. In fact, its considerably MORE complex in a DCS scheme. It is NOT based on your contribution, its based on the calculated VALUE of the DCS pot at the point at which you crystallise it (or part crsystallises it: a Benefit Crystallisation Event) e.g. when you use all or part of it to purchase an annuity or drawdown. This makes it considerably more difficult to calculate than DB pension valuations.
Oh, and while we are on that subject. People who are not on DB schemes suffer a major inequality: namely the way the "value" of DB pensions is calculated for LTA purposes. This massively underestimates their actual value compared to the size of investment you would need in a DC pot to be able to buy the same level of benefit through an annuity.
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hazellend
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Post by hazellend on Jan 3, 2019 15:43:56 GMT
Good luck with that! Oh yes, and that's precisely the attitude that the government has been giving towards NHS staff and why they now can't fill the posts in may areas/fields. Not sure I follow you on this one... My point is the govt should be doing all they can to fill the void - this includes higher pay, and better/cheaper/free access to training and education. If the govt were actually doing this then the issues around taxation for higher earners would be less of a big deal to the NHS - if we had adequate Doctors we wouldnt be having to ask them to do so much overtime and extra shifts! There are two issues here and I think the more pressing one is the lack of new recruits and this is as a direct consequence of govt policy, eg. making nurses pay for their own training despite us having a massive shortage! We need at least 10k more doctors and 40k more nurses
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coop
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Post by coop on Jan 3, 2019 15:48:42 GMT
Not sure I follow you on this one... My point is the govt should be doing all they can to fill the void - this includes higher pay, and better/cheaper/free access to training and education. If the govt were actually doing this then the issues around taxation for higher earners would be less of a big deal to the NHS - if we had adequate Doctors we wouldnt be having to ask them to do so much overtime and extra shifts! There are two issues here and I think the more pressing one is the lack of new recruits and this is as a direct consequence of govt policy, eg. making nurses pay for their own training despite us having a massive shortage! We need at least 10k more doctors and 40k more nurses That's frightening! As you're in the profession would be interesting to know: If you think the govt dropping the bursary has had a big effect on this (it was only 18 months ago so maybe we would still need most of the 40k nurses but it can't be helping?) If you think good A level results are important to be a nurse? I hear some people say that there's an unneccessary education burden placed on nurses and that bedside manner and caring attitude more important than good A levels but I don't know enough about the profession to form an opinion on this matter.
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coop
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Post by coop on Jan 3, 2019 15:51:32 GMT
......- unlike a defined contribution scheme where it is easier to simply contribute a pre-defined amount or £x. .....
Oh if only it was that simple. In fact, its considerably MORE complex in a DCS scheme. It is NOT based on your contribution, its based on the calculated VALUE of the DCS pot at the point at which you crystallise it (or part crsystallises it: a Benefit Crystallisation Event) e.g. when you use all or part of it to purchase an annuity or drawdown. This makes it considerably more difficult to calculate than DB pension valuations.
Oh, and while we are on that subject. People who are not on DB schemes suffer a major inequality: namely the way the "value" of DB pensions is calculated for LTA purposes. This massively underestimates their actual value compared to the size of investment you would need in a DC pot to be able to buy the same level of benefit through an annuity.
I've got a crappy DCS pension; I don't understand it and wish I just got out what I put in plus interest/investment growth! I feel like I'm just waiting a few decades to get diddled! Better still let me invest my own pension cos I don't trust any financial services company whatsoever!! Unfortunately I can't pay into a SIPP unless I forgo my employer's contributions which wouldn't be a smart thing to do...
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Post by bracknellboy on Jan 3, 2019 15:55:59 GMT
Good luck with that! Oh yes, and that's precisely the attitude that the government has been giving towards NHS staff and why they now can't fill the posts in may areas/fields. Not sure I follow you on this one... My point is the govt should be doing all they can to fill the void - this includes higher pay, and better/cheaper/free access to training and education. If the govt were actually doing this then the issues around taxation for higher earners would be less of a big deal to the NHS - if we had adequate Doctors we wouldnt be having to ask them to do so much overtime and extra shifts! There are two issues here and I think the more pressing one is the lack of new recruits and this is as a direct consequence of govt policy, eg. making nurses pay for their own training despite us having a massive shortage!
If you've got a leaky bucket, you need to fix the leaks, regardless of whether you also need to pour more water in to it. And the more society is investing in pouring in the water, the more it should want to and needs to prevent the leaks so as to get the most from that investment.
Coming back to the question who should decide how much to work, obviously it should be the individual. But clearly that will always be in the context of the incentives and disincentives that exist. At least in a democratic and free society.
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scc
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Post by scc on Jan 3, 2019 15:58:14 GMT
Better still let me invest my own pension cos I don't trust any financial services company whatsoever!! Unfortunately I can't pay into a SIPP unless I forgo my employer's contributions which wouldn't be a smart thing to do.. I believe you can transfer the balance of your company pension to a SIPP if you wanted to.
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