Some elementary maths
I filled my car up the other day – £55 for 50 litres of your basic unleaded, I never have understood why anyone would buy the "premium" and indeed have never seen anyone do it! It got me to thinking where all that money goes, which lead me on to a little mental arithmetic while I was driving. I rounded the figures up of course to make the maths simpler.
So lets say you are a high rate tax payer, and have £60 of your hard earned wedge in your pocket and need to fill up. Well to start with you’ve paid £40 income tax so the current score is:-
The Government £40
You £60
You have £60 worth of petrol in your tank – or have you?
The current tax rate on petrol is about 60%, so now your score is:-
The Government £76
You £24
mmmm – the government seam to be doing quite well here – but I thought deeper and remembered that there is the 17.5% VAT on fuel, isn’t there?
So now the score is:-
The Government £86.50
You £13.50
Oh dear! I forgot about national insurance on my original £100 of income – how much is that – 10%? yes, let’s use that.
Running score:-
The Government £96.50
You £3.50
So from my £100 of income I actually only have £3.50 worth of petrol, while the government has a bulging pocket with £96.50 in it – or do they?
I’v forgotten about employer’s National Insurance – which is what – 12%?
So now it looks like this:-
The Government £108.50
You £3.50
So the government has a tax take that is actually more than I earned in the first place! But at least that’s the end of it – Oh! – Hold on…..
The petrol companies make huge profits and pay enormous sums to the tax man – more for the government. And the petrol companies employ the forecourt staff, thay all pay tax and they employ drivers and admin staff and oil rig workers – they all pay tax too!
The Government take on my £100 of income must be close to £110.00 – now that is creative!
Some thrilling news for you all, I was chatting to my cousin the other night and he has just got a amazing new position at an hr management software company. Well done Jake