Originally posted by HairyArsedBloke
View Post
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Exposed: the confidence trick that supports banks
Collapse
X
-
-
Originally posted by HairyArsedBloke View PostYup, that's the idea. Constrict the money supply and keep inflation down.Comment
-
Originally posted by AtW View PostI'd make a good chancellor. Whoever made IR35 will be sacked among the first
Yes net salary is important. It always amused me during morgage boom time that banks used gross salary in full knowledge that 40% tax bracket would leave a lot less disposable income, this is especially true for place like London where salaries were higher and so were house prices but in terms of net salary the difference was even higher. If morgage payments were tax deductible (which they used to be I believe) then it would have made sense, but it was not making sense for the past 10 years. This just shows how irresponsible banks were - if I was running bank and had to decide whether to give morgage to someone then I'd obviously want to see if they get enough disposable income to pay the morgage! Gross salary is totally irrelevant - for all you know that person might have drug addiction that won't leave any money left for morgage payments.
When they asked how much I spend on my drug habit I lied! I suppose they could ask my dealer......Comment
-
Originally posted by BrilloPad View PostBanks do ask about outgoings - leccy, gas, phone.
This is especially the case due to higher taxation which I think banks were not factoring in - in fact I don't think they gave a tulip because house pricing were growing so even if the person could not repay debt the bank would make get money back by selling house. A winning strategy no doubt.Comment
-
Originally posted by AtW View PostIt makes no economic sense to use gross salary multiplier because actual disposable income will be different for different people who may have same salary and live in the same place, do you agree with this?
This is especially the case due to higher taxation which I think banks were not factoring in - in fact I don't think they gave a tulip because house pricing were growing so even if the person could not repay debt the bank would make get money back by selling house. A winning strategy no doubt.Comment
-
Originally posted by BrilloPad View PostI think people will do ANYTHING to keep their house so will cut back on other things.Comment
-
Originally posted by AtW View PostIncluding income tax? 40% bracket reduces take home pretty considerably (ratio wise).Comment
-
Originally posted by BrilloPad View PostThis is true. But then less NI at that point. Its small beer relative to my other points.
If you compare say someone on 80k gross to someone on 40k gross: the former would normally have less than 2x the net income of the latter; but he would be able to spend much more than 2x the amount on the mortgage, if he wanted to.Comment
-
Originally posted by expat View PostMore to the point, someone on a higher income has much more discretion in allocating net income to mortgage payments if he chooses.
If you compare say someone on 80k gross to someone on 40k gross: the former would normally have less than 2x the net income of the latter; but he would be able to spend much more than 2x the amount on the mortgage, if he wanted to.
You'll have to forgive atW. He's never been in the top tax bracket and never had a mortgage so he doesn't know how it works.
To compensate though he did once do a simple Economics course at the Polytechnic of Ulan Bator.Hard Brexit now!
#prayfornodealComment
-
Originally posted by sasguru View PostYou'll have to forgive atW. He's never been in the top tax bracket and never had a mortgage so he doesn't know how it works.
To compensate though he did once do a simple Economics course at the Polytechnic of Ulan Bator.
Shame to had to sleep with his tutor to get it!Comment
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Comment