UK workers refuse promotions to avoid tax trap |
| Research for the Telegraph suggests that a number of high-paid workers in the UK are turning down promotions, cutting hours or donating to charity to avoid a £100,000 (€115,000) tax threshold. The analysis saw 43% of managers say they or their employees have deliberately reduced income to avoid punitive tax rates. Frozen thresholds and growing awareness of a tax trap which removes childcare benefits and tapers the personal allowance - creating effective marginal tax rates of 62% - have led many to boost pension contributions, use salary sacrifice schemes, cut hours, turn down promotions, retire early or donate to charity. Economists, tax experts and NHS leaders warn the cliff edge is irrational and damaging productivity. Petra Wilton, from the Chartered Management Institute, said: "When employees make those decisions, organisations lose experience and valued leaders, and teams feel the impact immediately." |
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