Hi, everyone and welcome back to Britain Under the Microscope. 欢迎回来【闲话英伦】Hi 安澜.

Hi, Lulu. Hi, everyone.

So, the topic I'm going to propose today, well, I say “I propose” is actually from one of our fans.

Oh, brilliant.

So she proposed this topic, because she was recently hired by this company, and she's dealing with all these social insurance tax deduction “五险一金” thing.

Okay. Oh, dear. I can imagine that's very complicated.

And she wanted us to talk about what it's like in the UK.

Okay.

But first things first, 安澜, you know the idea of “五险一金”, right?

Well, to be perfectly honest, I probably understand the Chinese system more than I do the British system.

Of course. Because fair enough, you have been working in China for all these years.

Yeah, exactly.

You have to pay all of those as well.

Yes.

But for those of you who are still students or you don't really know that much about 五险一金, let me give you a very quick crash course.

咱们说的五险一金包括五险是养老保险, This is like the pension, 医疗保险, medical insurance, 失业保险, unemployment insurance, 工伤保险, work-related injury insurance and生育保险, maternity insurance.

一金就是住房公积金housing fund.

Yes.

安澜, you don't have housing fund, do you?

No. I don't have housing fund. I don't think I actually have to pay housing fund because as a foreigner.

You don’t have access.

I don't have access.

Okay. So that's a little bit of introduction to our 五险一金. Now before we get into the UK system, I assume that the basic concept is the same, like pay, there's the idea of gross pay. And there’s the idea of net pay也有这种税前税后的概念.

Yeah. So gross pay is your full pay before tax and that's normally what is advertised when you apply for a job. That's normally what's written on your contract. Your net pay is your take-home pay.

Oh, you call it take-home pay.

Yes.

你知道中文咱们叫到手多少钱.

Yeah.

So you say we take home, we say we get in our hand. Yeah, same idea.

Exactly. And we call it net pay, because essentially is whatever you can catch in the net after everything's been taken away.

And this is after not just tax but all the deductions.

All the deductions. Yeah.

Let's talk about tax first.

Ok.

Income tax, I remember, it is relatively high in the UK.

It is. Income tax is the largest source of government revenue in the UK. Ironically, it was first introduced to pay for wars against France in the 18th century.

I'm not surprised.

Yeah. And we beat the French in these wars, but we still have to pay the tax.

In China, we have a个税起征点. So unless you reach that level of income, you don't pay tax.

Yes. So, that's what we call a tax threshold.

A tax threshold也是个税起征点.

Or the more formal word for it is personal allowance.

Personal allow - you call it “allowance”, it means the country allows you to make this amount of money without paying tax.

So everyone has a personal allowance, which is the amount of money when you start paying income tax.

Okay.

So this tax year, it is 2023-2024. The personal allowance is ?12,750.

?12,750. So unless you reach?12,750 in gross pay, you don't start paying income tax.

That's right.

12,750磅的年薪以上才会开始, 这是他们的个税起征点.

Yeah. Now we call it a personal allowance, because from above that amount of money, you pay 20% on any money earned over your personal allowance.

It's the same here阶梯式的这种. That is not very high, 20%. So, this is from ?12,750 to?

50,270 pounds.

To 50,270…, 5万多磅, 相当于人民币的四十几万的年薪, 也不到50万年薪这样, 这个里面是加到20%.

Yeah, so it's not that much money if you consider the cost of living in the UK.

Yeah, it's not that much money, but also the taxes isn't too high, I guess.

Well, the thing is in the UK there's lots of indirect tax. So, you have to factor that in as well.

All right. And above that, the next tax bracket.

The next tax bracket is from ?50,270 to ?125,140 pounds.

What? Why is it so specific? 为什么有整有0? 我们都是一个整数a round number. Why do you have 125,140?

Because they're adjusted in line with inflation. This is something that changes every single year.

就根据每年的一个inflation通胀会改变. So, this is the next bracket from 50,270 pounds a year to 125,000. So by RMB, that would be over a million.过了100万年薪之后, and this part从50万到100万年薪, 咱们就说差不多吧40%.

Yeah. 40% and anything over that is 45%.

I see. Really, it’s better than I thought.

It's not too bad, it's not too bad. But again, as I say, there's lots of indirect tax.

So for example, in the UK you have the VAT which is the tax on products, you also have council tax, if you own your own property or you rent property, you have to pay money.

Probably property tax as well.