A pilot deliberately cut his salary by a quarter to avoid being caught in a £100,000 tax trap.
Mark Brown said he reduced his working hours by 25% after realising that earning just over £100,000 would actually leave him worse off.
Instead of working full-time, he focuses on his tour guide business, Let Me Show You London, with partner Denisa Podhrazska, 43.
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The 41-year-old’s net salary is £70,000.
“I do 25% less work and its a lot more tax efficient,” Mark, from Guildford, Surrey, told Need To Know.
“You could see it coming because its been tax policy for a long time now.
“At some point, you’ll run into the position when you get through that barrier into a six figure salary and there’s a small window where you end up on a 62% tax rate.
“It seems daft so be giving away more money than you’re earning.
“I have the opportunity to take that time and invest it into our business.
“We have a back up and I wanted to reinvest my time rather than spend more time in my day job getting taxed.”
According to the government website, your personal allowance goes down by £1 for every £2 that your adjusted net income is above £100,000.
This means your allowance is zero if your income is £125,140 or above.
Mark said the policy discourages people at the peak of their careers from contributing fully to the economy.
He said: “They’re drawing more people into this.
“It’s frustrating.
“At my age, I should be at my most productive in my career, I should be able to give as much as possible to the economy.
“But because theres a punitive tax barrier there, I’m doing something else with my time.
“And it costs airlines a lot more to have lots of pilots on part time contracts.
“It just doesn’t make sense.
“If they had a fairer way of approaching taxation maybe there’d be more people being productive and you could collect more tax to spend in the community.
“Perhaps they’d end up with more in the pot so more people could benefit.
“It is a first world problem but it’s still a problem.”
Mark trained as a short haul airline pilot at a cost of £70,000 funded by a bank loan.
Full-time airline captains in the UK typically earn between £100,000 and over £150,000 per year.
As a new first officer, Mark’s net salary was £40,000.
He added: “It was a big commitment but I really had a passion for it and I enjoy it.
“No two days are alike and it’s an interesting job which is why it’s frustrating to be boxed into a corner with the crazy tax situation.
“I’m not here by luck.
“It cost me a lot to get into the industry.
“I went to university for three years and then pilot training for two years.
“Then I’m assessed every six months to make sure i can still do the job.
“You’ve got people who would be willing to do more work but it’s one size fits all solution so if people have the opportunity to do less or put their effort somewhere else then they will do it.
“Everybody loses out including the customer that uses the airline.”
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