Part 160

Hello and welcome back to Mortgage Advisor on FIRE.  This week I talk about tax codes, tax bandings, and how the autumn statement impacts on the tax you pay.  Also, updates from my Lego Rocinante project, and a frustrating learning experience.  

Quote of the Week:

“I only built it on a computer.”

Those following me on social media will have seen my posts about my Lego build of the Rocinante; the main ship of The Expanse series.  The model has over 5,000 pieces and has cost over £600 to obtain the parts needed.  When complete, the model is almost a meter long and is built at a scale of roughly 1:60.  It’s an amazing-looking model.  The only problem is the design doesn’t work in the real world.  

For those who don’t know there is a community of Lego enthusiasts who design their own models for things not officially licenced by Lego such as Star Trek, Babylon 5, and so on.  There is software out there that allows you to build models and publish designs for other people to build.  The designs have to work within the rules of Lego; pieces that don’t fit together can’t be forced together, is what I mean.  What the software does not simulate is gravity.  If you put a model together in the software, no matter how flimsy the connections, it will stay connected.  

Anyway, the design for the Roci has 1,010 steps.  All was going well until around step 800.  Then, some of the components would simply not stay connected because of, well, gravity.  I ended up making some modifications to the design for it to work.  I then got to the final stage of the build, which was the drive cone at the rear of the ship.  I picked up the model to change its position to allow me to build that part, and several components fell off and smashed apart.  

I went back to the person who designed the model and it turns out they’ve never actually built the physical model; they’ve just played about with it on a computer.  It’s such a shame because if it could be completed it would be absolutely stunning.  I’ve left the partially completed model on display, but each time I look at it I just get angry again.  

Weekly Update

I’ve felt extremely stressed for much of this week.  It’s not been because of anything that serious, in the bigger picture, but rather little things here and there that have accumulated to the point where I’ve felt like I needed some time out.  Here’s one example of something that happened this week;

I went to Boots to pick up several prescriptions for myself and one for Oana, my girlfriend.  I am medically exempt from paying for prescriptions and Oana has an annual prepayment certificate.  So, I go up to the counter and this is how the conversation goes.

Me: Hi, I have some items to collect *I hand my exemption card over so they can find my details”.  Also, I have an item to collect for my partner.

*I notice that the person didn’t seem to hear me, so I repeat myself.  However, they’re still engrossed in something on their screen so I let them finish.”

Boots: It’ll be around ten minutes.

Me: Thanks, but I also have an item to collect for my girlfriend and this is her prepayment certificate *I show my iPhone screen that has the info on it*.

Boots: Ok, thanks, it’ll be ten-fifteen minutes.

*I check the time and it’s 11:15.*

At 11:35 the pharmacist calls my name and hands me a bag with my name on it.

Me: What about my partner’s meds?

Pharmacist: Did you tell them when you came here?

Me: Yes, three times and I showed your colleague my partner’s payment info.

Pharmacist: Ok, well I’ve got something else to do now so you’ll just have to wait.

Me: Excuse me? First, this isn’t my mistake.  Second, it’s one item which I can see on the shelf behind you.  How long does it take to grab that item and get a colleague to check it?

Pharmacist: You’ll have to wait as I’m busy now. 

*Twenty more minutes pass by*

Pharmacist: *calls out Oana’s name*

Me: *takes bag* is that all?

Pharmacist: what do you mean?

Me: An apology? Some basic politeness or acknowledgement of the mistake you’ve made?

Pharmacist: An apology for what?

At this point, I kind of lost my shit a bit.  It was now almost an hour since I entered the pharmacy.  Mistakes happen, I get that, and if there’d just been a simple apology and acknowledgement they’d got it wrong, it wouldn’t have been a big deal.  The attitude of the pharmacist was awful though.

This pharmacy is used by a few people I know because of its convenient location.  Everyone says the same thing though; the attitude of the staff is awful.  

Over the last couple of years, it’s seemed as though I’ve had one bad experience after another when it comes to customer service.  When I speak with other people, I hear the same horror stories.  Is customer service generally getting worse, or are people becoming less tolerant of poor service?  Is it a bit of both?

The week has come to a positive end though.  On Friday my Dad came over to see us, Oana and myself.  We had some good food and my Dad got a chance to see the place now that much of the work is complete.  

Understanding Autism

This might seem like a sudden change of subject but there is a loose connection to customer service.  Since receiving confirmation that I’m autistic I’ve stepped up my research into autism.  I already had a foot in the door, so to speak, as my Dad had been identified as autistic a few years ago.  My Dad writes a popular blog about his autistic journey, and through him, I’ve been able to network with other autistics.  The point is, I am fortunate enough to not be dealing with being autistic alone.  I have a good support network around me, so I’ve been able to filter out the harmful myths around autism whilst learning what it is to be Actually Autistic (the #ActuallyAutistic tag is one of the best to search for on social media if you want to know more about the genuine autistic experience).  

Anyway, I was made aware of a course on Understanding Autism via The Skills Network.  The course was free, but if you failed to complete it there was a £100 fee to pay.  The other day I loaded up the course and I had my head in my hands within just a few minutes muttering FFS.  The material was not just awful, it was out of touch, offensive, and potentially harmful.

Some examples include;

  • Using the term “high-functioning autism”.
  • Using the puzzle/jigsaw piece as a symbol of autism.
  • Referring to the autism spectrum as a linear line with “low” at one end and “severe” at the other.
Screenshot from the learning material.

There is no such thing as high-functioning autism, just like there is no such thing as low functioning autism.  Autistic people, like all people, have areas in which they can perform better or worse, and times at which they perform better or worse.  In short, we are all high, medium, and low functioning at different things, at different times, and in different situations.  As a term, it adds nothing, means nothing, and is harmful and misleading. 

You may see the puzzle piece used as a symbol of autism in promotional material, books, and other media.  However, to the vast majority of autistic people, the puzzle piece is a symbol of hate.  This symbol is used by the group Autism Speaks which views autism as an illness that needs eradicating, and they share views that are dangerously close to eugenics.  Talking about Autism Speaks and all their dangerous bullshit could take up a book on its own.  The point is, autistic people, in the main, do not like this symbol.  Another reason the symbol is hated is because of the way the puzzle piece is used, in which it suggests that autistic people have something missing or are somehow deficient.  It’s insulting.

As for the autism spectrum…. I don’t even know where to begin with this one.  I remember when I was doing A-Level psychology back in 2001, the spectrum was described as a linear model ranging from low to severe.  However, this was not how the spectrum was conceived and it’s not how the spectrum actually works.  The best way to describe the autistic spectrum is to look at an image like this one:

Within this spectrum each autistic person has their own pattern which is unique to them, almost like a fingerprint or retinal scan.  We are not “all a little bit autistic”.  

I contacted the course provider with my concerns and they replied quickly to confirm I could withdraw with no penalty.  However, no comment was made regarding the content of the course, and this is where I get frustrated.  Let’s use an imaginary scenario…

Imagine you are learning about autism having almost no prior knowledge.  You’ve seen some examples in fiction and think you have a rough idea of what autism is.  You are instructed to take a course titled Understanding Autism.  You read through the slides which have a high production value and watch the videos that explain that the autism spectrum is a straight line from low to severe.  You come out of the course thinking you have a good, basic, understanding of autism.  

A few days later you are talking with a colleague and you mention the course.  The colleague states that they’re autistic and they ask a few questions.  You are confused because the course seemed to suggest that autistic people would struggle to pass as “normal”.  You ask your colleague where on the spectrum they are, and they sigh gently and start explaining what the spectrum actually is.  Just think about this for a second because this sort of situation happens a lot in life, not necessarily about autism, but about lots of things.  You are told something and you believe it because you have no reason not to.  Then, someone tries to correct you, but you don’t believe them because your (incorrect) information came from an official course with slick production values.  Sometime later, be it days, weeks or even years, you look up the subject and realise that you were wrong and your colleague was right.  In general, people have a tendency to believe what they are told first, and a tendency to believe what they are told from positions of authority.  The thing is, authority does not always correlate with accuracy.  

There will be people out there that take this course and walk away with, what they think, is an accurate understanding of autism.  It’s wrong, it’s harmful, and it perpetuates many myths about autism that make it much more difficult for autistic people in a world designed for neurotypical people.    

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2022 Goals – to be achieved by 31/12/2022

1 – Reduce weight to 90kg.  (Current weight 126.4kg).

2 – Complete 10 “classic” books (4/10)

  1. Crime and Punishment by Fyodor Dostoevsky (1866)
  2. Moby-Dick by Herman Melville (1851)
  3. Dracula by Bram Stoker (1897) ✅
  4. Catch-22 by Joseph Heller (1961)
  5. The Iliad by Homer (8th century BC) ✅
  6. The Count of Monte Cristo by Alexandre Dumas (1844) ✅
  7. War and Peace by Leo Tolstoy (1867)
  8. A Tale of Two Cities by Charles Dickens (1859)
  9. Les Miserables by Victor Hugo (1862)
  10. Don Quixote by Miguel de Cervantes (1605) ✅

3 – Read 10 authors I’ve not read before (24/10)

  1. John Birmingham ✅
  2. Nicole Perlroth ✅
  3. Sabine Durrant ✅
  4. Luke Smitherd ✅
  5. Max Skittle ✅
  6. Harlan Coben ✅
  7. Jo Spain ✅
  8. Kate Elizabeth Russell ✅
  9. Kiersten White ✅
  10. Rob Hart ✅
  11. Edward Aubry ✅
  12. Marina J. Lostetter ✅
  13. S. J. Morden ✅
  14. C. J. Tudor ✅
  15. Greer Hendricks ✅
  16. Clare Mackintosh ✅
  17. Stephen Baxter ✅
  18. Pete Wharmby ✅
  19. Devon Price ✅
  20. Nick Jones ✅
  21. Nathan Hystad ✅ 
  22. J. P. Pomare ✅
  23. Max Hastings ✅
  24. Brian Lumley ✅
  25. Steve Richards ✅

What Am I Doing?

Reading: Fake History by Otto English.

Listening: The Expanse series by James S. A. Corey

Watching: nothing at the moment.

I’ve decided to go back and listen to The Expanse series again, this time in complete chronological order including the novellas.  The series has nine main novels that are loosely split into three trilogies.  Between the main books, some novellas were published that add a bit more context to some of the major events and characters.  

The Expanse is the finest science-fiction series out there, and that’s a hill I’ll die on.  The TV show was also excellent but sadly not able to hit the heights of the original book series.  If you feel like you want to read this series, or even listen to the amazing audiobook versions, just do it.  Whilst it helps to have a basic understanding of physics it’s hardly essential to enjoy the story.  

I started watching Elite season six but gave up partway through the first episode.  The early seasons of Elite, which focused on the original students, were fantastic television.   However, it quickly suffered from the same problem as the Fast and Furious series in which each new instalment had to be bigger, louder and more absurd. 

Financial Update

Assets

Premium Bonds: £9,595.00 (+£235.00). 

Stocks and Shares ISA: £63,244.80 (+£1,743.77). 

Fuck It Fund: £1,675.00 (+£50.00).

Pensions: £54,653.81 (+£622.87). 

Residential Property Value: £233,989.00 (no change). 

Buy-to-Let Property Value: £150,993.00 (no change). 

Total Assets: £514,150.61 (+£2,651.64). 

Debts

Credit Card: £0.00 (no change).

Residential Mortgage: £180,466.52 (no change). 

Buy-to-Let Mortgage: £105,193.90 (no change). 

Total Debts: £285,660.42 (no change). 

Total Wealth: £228,490.19 (+£2,651.64)

Investment Income in 2022: £5,102.27 (target £6,000).

The stock market seemed to respond well to the Autumn statement from the new Chancellor.  My investment income climbed a little as I received rent from my BTL.  However, the dividend payment I was expecting on Friday seems to have been paid late, so it will only be counted from next week’s blog.  

The Autumn Statement

There was a lot of stuff in the autumn statement which may not even come to pass.  Several measures are not due to be implemented for some time and, with the current clusterfuck of a government, things can change from one day to the next.  However, I want to touch on one point which a few people have asked me about; the freeze on personal tax-free allowances.  

Before we get into the changes announced we need to look at how employed people pay income tax.  In the UK each person has a personal tax-free allowance which is denoted by their tax code.  The standard code is 1257L, which means the first £12,570 you earn is not subject to any tax.  However, what you earn between £12,571 and £50,270 is taxed at 20%.  There are two additional tax bands for those earning £50,271 or more, and those earning £150,000 or more.  

One common misconception is that if you are earning £50,000, and you get a pay increase to £51,000, you will somehow take home less money.  This comes from a misunderstanding of how the tax brackets work.  If your earned income is £51,000 then you pay 20% tax on the amount that falls between £12,571 and £50,270, and you pay 40% tax on the amount that falls between £50,271 and £150,000.  Let’s break it down…

Examples

Steve earns £12,000 p/a and his tax code is 1257L.  He pays no income tax.

Naomi earns £27,500 p/a, and her tax code is 1257L.  She pays no tax on the first £12,570 of her income.  This leaves £14,930 subject to tax.  This is taxed at 20%, because her total taxable income (£27,500) falls in the 20% band of between £12,571 and £50,270.  So, 20% of £14,930 is £2,986.

James earns £59,400, and his tax code is 1257L.  His tax liability can be calculated simply, using the following bandings:

Up to £12,570 – no tax.

Between £12,571 and £50,270 he pays 20% tax.

Between £50,271 and £150,000 he pays 40% tax.

The calculation for James looks like this;

£7,540 tax due from the 20% band.

£3,652 tax due from the 40% band.

Note; James only pays 40% tax on the amount that falls into that tax bracket, i.e. (£59,400-£50,270)*0.4 = £3,652.  

I have known some people who think that if you fall into the higher tax brackets, then the higher rate of tax is applied to all your income.

So, coming back to the autumn statement… The Chancellor announced that the tax-free allowances are going to be frozen for the next few years.  Whilst technically not a tax increase, it does mean that more people will pay more tax.  The tax bandings have been amended meaning that more people will fall into the 45% banding, but if you earn less than £125,000 this will not impact you.  The impact comes from the tax-free allowance being frozen.  Like many financial concepts, it is best explained with an example.

Jim earns £20,000 p/a and has the standard 1257L tax code.  

Year 1: Jim pays £1,486 tax.

Year 2: Jim has had a 5% salary increase.  He now earns £21,000.  He now pays £1,686 tax.

Year 3: Another 5% salary increase; salary £22,050, and tax paid is now £1,896.  

As your salary increases, but your tax-free allowance remains the same, you pay more tax.  

The people who are really going to get hit hard with this are those earning £40,000+.  It is entirely plausible that someone earning over £40,000 could soon find themselves creeping into the higher tax bracket, as well as paying more in the 20% bracket as their tax-free allowance does not increase in line with inflation and wage increases.  Take the following example;

Kate earns £47,000 p/a with a standard tax code and receives a 5% increase in pay each year.  Her tax liability looks like this:

Year 1: £6,886

Year 2: £7,356

Year 3: £8,159

Year 4: £9,195

Year 5: £10,283

So after five years of 5% wage increases, Kate’s new salary is approx £57,129 p/a; and her tax liability has increased by almost 50%.

I’m not anti-tax, and I appreciate money to pay for public services has to come from somewhere, but this is a catastrophe that the Tory party had a huge role in creating, and I predict these measures will see the Tory party weakened as a serious political force at the next election for a long, long time.  

That’s all for now.  Thanks for reading.

Disclaimer

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, nor should they be considered advice.

If you want personalised financial advice, seek an appropriate professional.  If you are in financial difficulty, seek advice via the resources below:

StepChange

MoneyHelper

Biolink and other links

You can now find all my social media pages by checking out my Biolink:

bio.link/davidscothern.

Also, check out Darren Scothern’s blog which talks about autism, being autistic, and general mental health:

www.darrenscothern.com

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