This interactive chart lets you see the current rUK and Scottish marginal tax rates for 2023/24 and 2024/25, with/without child benefit and student loans. You can turn on/off different years and options by clicking on the legend below the chart. Some of these charts won’t work well on mobile; you can see static versions here.
This interactive chart plots the same data, but gross income vs net income:
Finally, this chart again plots gross vs net income, but adds in the effect of the marriage allowance and a £20k childcare subsidy:
Methodology
The calculations are performed by the python script and rate data on our github here. The key assumptions/caveats are:
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- Income tax/NI as for tax year 2023/24 and 2024/25 in the UK and Scotland (but applying the September 2023 national insurance change as if it applied for the whole of 23/24)
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- One earner in a household, who is over 21 and not an apprentice, not a veteran, and under the state pension age
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- Ignores benefits aside from child benefit (although benefits are notorious for creating very high marginal rates – not, however, an area where I and our team have expertise). Child benefit assumes three children (you can freely change that in the code).
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- Doesn’t include tapering of pensions annual allowance (starting at £240k)
Do please send us any corrections, additions or comments.
9 responses to “Interactive marginal tax rate chart – June 2024”
I twigged the various problems with having children a few years ago. My wife and I had six – consciously. We’ve largely never received any benefits bar a short period of being out of work when I got working tax credit and child tax credit. We did for a time get child benefit for all of them. My conclusion is this country hates domestic born and raised hard working people who also want to raise children (guys, if you don’t know the maths, we need to have an 2.4 per family to sustain the population – so 3 should be the aspiration for all families). We twigged we couldn’t afford childcare, so my wife was a stay-at-home mum, but that comes at such a price. When I did the maths, the sweet spot for discretionary income and an easy life was for both parents to earn about £20k each, and then you got free prescriptions, childcare, school meals, gifted and talented programmes, dental care, discounted council tax and more. However if you are a working dad earning say £45k, you get higher rate taxes and super aggressive tapers. Another kick in the balls is the way student finance works and they get penalised at university – I can’t afford to give them money because there are so many – and the loans are paltry because I earn over £60k. I realise all of this has changed now, and my youngest is 17 and getting ready for university – but it would be really useful to include all of the benefits and tapers and show the discretionary income for married, living together and single parents and how the ages and educational stages play an effect. It’s felt like this country hates parents who are middle class and who will raise the next generation of net tax payers and is doing its very best to wipe out the middle classes and reward the feckless and forlorn. The chinese study of twins separated at birth where one child is sent to a completely different family or culture or country shows that nature is actually the strongest determinant of long term outcomes and you end up ultimately where you will end up. These policies may be why the national IQ score is actually falling, as it’s now too expensive for smart people to have the 3 children, and these graphs show why.
Would be fantastic if we could enter how many children we’re claiming child benefit for… we have 5 kids so that is a considerable marginal tax rate over £60k this year !
thanks – I’d love to improve the code to allow this sort of thing!
Would be great if you could include with student loans without child benefit in the future
thanks. Is there any easy way to see the breakdown of the numbers e.g. the 70% at 120K? I don’t get the child benefit bit. Cheers
Why is student loans only ever an option in combination with child benefit? Could you add the option for student loans only, no kids? And how many kids is the ‘child benefit’ option assuming?
Thanks Dan. I find the precision of the numbers shown on the gross vs net income charts a bit strange (thousands to five decimal places). It might be worth adding something like the following at the end of your go.Scatter() in row 210: , hovertemplate=’£%{y:,.0f}’
great point – thank you! Have updated the charts and code.
I would exclude the effect of the mandatory legal minimum pension contribution, which slightly reduces the marginal rates.
I think the effect of withdrawal of benefits on marginal rates is more significant in aggregate and creates much stronger incentives not to work, or to pursue untaxed ‘side hustles’, rather than take on additional hours.