Me neither, tbh. And I'm terrified of the number of people who don't understand how their money is taxed - I was one of them once. Here's how tax in the UK works, average UK salaries and why £80,000 a year definitely puts you in the top 5% of earners in the UK. https://twitter.com/hankgreen/status/1198011841068314629

Our tax system is MARGINAL; this means that you pay different tax on each £ over certain tax bands.

Let's start at the beginning; everybody gets £12,500 Personal Allowance, which is not taxed at all. Sweet! That goes straight into the bank account.

You are then taxed at 20% on every £ you earn between £12,500 - £50,000.

ie. If you earn £25,000 (a common junior rate in the animation industry, for example) you only pay 20% tax on £12,500 of that, in other words every £ you earn on top of your Personal Allowance.

Once you earn over £50,000, every £ over £50k is taxed at 40%. You aren't paying 40% on your whole salary all of a sudden, as I once thought!

ie. If you earn £51,000, you only pay 40% tax on the £1k, and the rest is still taxed as normal. You're still taking home more money.

Currently, the margin for 40% tax is between £50-150k, with anything over £150k being taxed at 45%. This is a ridiculous margin! Someone earning £50k looks far different to somebody earning £150k, but they are being taxed at the same rate.

What Labour is planning is to lower the 45% tax margin to £80,000, a far more reasonable margin for higher taxation. Earning over £80k DOES put you in the top 5% of earners in the UK. EASILY. There's many reasons why the man on Question Time might not think he is, however;

1. The mean average salary of workers in the UK is skewed by the figures of the top 1% of earners; the millionaires and billionaires. Compared to them, it's easy to understand why Mr. £80k a year might feel like he is not even in the top 50%. But HE IS.

You can see that it's around £80k that salaries start to drastically increase, in this graph measuring average salaries broken down into percentiles. When increases in pay start to skyrocket like that, you might easily feel like you're not earning much in comparison.

2. £80k a year puts you in the top 5% of EARNERS, but it doesn't necessarily put you in the top 5% of WEALTH. To be in the top 5% based on wealth, you need to own assets worth +£1.7million. You can earn £80k a year but not fit that bill, and feel rather average in comparison.

3. Similarly, £80k in our economy does not make you rich like it used to. You aren't living in a mansion with a yacht and a holiday home. To be accused of being in the top 5% alongside the upper class can be a kick in the face to somebody from a modest, lower-middle background.

However, £80k a year IS in the top 5%. Doctors, Lawyers, Solicitors, Teachers, Firefighters, Police Officers, Engineers (the list just keeps going) all earn less than £80k a year. Approximately 95% of the country earns less than £80k a year.

Here's a good website for calculating how much more you'll be taxed under a Labour government. It's probably not that much more. https://calculate.forlabour.com/?fbclid=IwAR2l0_wORxDiHZ7chzLmh_mLYJmShy7YwI_CccJvPkz_uObDS4AZ9HQ-SdQ

I'm not really sure why I spent so long writing this.

Sources;

1. https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2019provisional
2. https://calculate.forlabour.com/?fbclid=IwAR2l0_wORxDiHZ7chzLmh_mLYJmShy7YwI_CccJvPkz_uObDS4AZ9HQ-SdQ
3. https://www.bbc.co.uk/news/amp/50517136?__twitter_impression=true
4. https://www.theguardian.com/politics/2019/nov/22/factcheck-earning-80000-or-more-top-5-of-uk-earners-labour