Don’t understand tax? You’re not alone!
Last Updated on 13 July 2024
For nearly 20 years I’ve been helping people to understand how tax works as part of my Finance for Freelances workshops.
The income tax quiz and the tax bathtub graphic are always the highlights!
David’s famous income tax bathtub © 2024
This is not just for fun. If you understand the tax system you will be much less anxious about it.
And most people have never been told how their tax bill is calculated. They think it’s complicated, and it really isn’t.
We’re ignorant! It’s official!
Now there’s been some research which shows half the nation misunderstands one crucial element of tax.
This is the fact that if you’re in a higher tax bracket, it’s only some of your money that’s taxed at that higher rate, not all of it.
Getting this wrong stops people trying to earn more, so it’s a very damaging kind of misunderstanding.
The research was carried out by a not for profit called Tax Policy Associates, which campaigns to help public understanding of tax. For that alone they deserve a shout out.
If there was ever a good argument for teaching people in school how tax works, it’s in this article.
You can read what they found here >
Tax Policy Associates is basically a former tax lawyer and campaigning journalist, Dan Neidle. He’s terrier-like when he sniffs something isn’t right.
His analysis of former chancellor Nadhim Zahawi’s tax affairs makes fascinating reading:
Nadhim Zahawi’s SLAPP results in disciplinary action for his lawyer >
NB: David Thomas Media Ltd is not responsible for the content of other sites nor any financial advice provided by them.
Posted on 12 July 2024
