Why isn't the UK income tax threshold tied to the minimum wage?
It seems ridiculous to me that in the same time period that the threshold has remained fixed (£12,570 since April 2021), the minimum wage has risen from £8.36 to £12.71 per hour; an increase of 52%.
That means in 2021 the minimum wage was £16,051.20 per annum, leaving people paying tax on £3,481.20 - or giving back £696.24 from their "minimum" wage.
But now the minimum wage is £23,386.40, but people are paying tax on £10,816.40, or giving back £2,163.28 from their so called "minimum" wage.
So although tax remains at 20%, the "net" minimum wage after tax has gone from £8.34 an hour to just £11.75.
Tax is still at 20%...but people on minimum wage have gone from paying are paying just £0.38 tax per hour to a whopping £1.18 per hour.