Earning over £100,000 a year and can't get a mortgage?

Dithering_Dad

dudleyboy wrote: »

Am I right in thinking that you're self-employed having registered yourself as a limited company, paying yourself minimum wage for tax purposes but receiving large annual dividends from your own one man company?

I know it's perfectly legal, and I'd probably do the same if I was a contractor/consultant because it is legal, but I think this is one of the many loopholes/policies that the government needs to crack down on.

It's all well and good forcing the thick / unskilled / lazy back to work by cutting their benefits but if the government really wanted to boost it's revenue I know which loophole I'd tighten first. People earning above the 40% tax threshold should be paying 40% tax, not claiming they're on minimum wage and pocketing their salary via discreet unethical channels.

Consultants, contractors, restaurant / take away owners, cab drivers, to name but a few. They're all at it.

I have to ask, if it's legal then why should it be clamped down on?

Here is a list of some other legal activities, do you also think these need to be clamped down on?

1. Watching TV in your own home, on a TV you paid for and while in receipt of a valid TV license.

2. Going for a walk on a public footpath, fully clothed and not causing a nuisance.

3. Eating food that was bought from a local restaurant.

4. Going to the toilet, making sure the door is closed and all decency laws are observed.

Need I go on?

boinging_2

Dithering_Dad wrote: »

Perhaps it's the amount you have an issue with rather than the principle of posting income onto a thread?

Yes you're right.

All hail the big man, earning his big bucks, in his big house and with the big car...

Dithering_Dad

boinging wrote: »

Yes you're right.

All hail the big man, earning his big bucks, in his big house and with the big car...

All hail the small man, jealous of those who work harder and provide better for their families.

boinging_2

Dithering_Dad wrote: »

All hail the small man, jealous of those who work harder and provide better for their families.

I agree. No compensating hard work.

dudleyboy

Dithering_Dad wrote: »

I have to ask, if it's legal then why should it be clamped down on?

Because it's white-collar fraud, just in the same way as claiming state benefits that you're not entitled to is blue-collar fraud.

The only reason this is "legal" is because all the corrupt/deceitful/unethical politicians, their corrupt/deceitful/unethical family members and their corrupt/deceitful/unethical friends and peers are also at it.

That is why it is "legal" but, of course, you already knew that.

In the meantime, the government that allows this wide-scale, middle-class, white-collar fraud to continue is the same government that has recently increased taxes for Britain's lowest paid and set to reform the state benefits system to force people back to work to reduce expenditure and increase their income tax revenue.

Now, while I think it is high time for a reform of the benefits system, it doesn't sit comfortably with me knowing that this government - a Labour government(!) - allows this to continue. In fact, I would imagine that few working class people are even aware that it goes on at all.

So if you sleep well at night knowing that you pay the same income tax as the "small man" thanks to the exploitation of a cunningly conceived accountancy loophole, while also living a lavish lifestyle on what should be public money, which could be spent on improving our hospitals, schools, communities, safety and security, bailing out banks, etc, then so be it.

I'm not judging you, I'm just voicing my disdain.

BobProperty

dudleyboy wrote: »

Am I right in thinking that you're self-employed having registered yourself as a limited company, paying yourself minimum wage for tax purposes but receiving large annual dividends from your own one man company?

I know it's perfectly legal, and I'd probably do the same if I was a contractor/consultant because it is legal, but I think this is one of the many loopholes/policies that the government needs to crack down on.

It's all well and good forcing the thick / unskilled / lazy back to work by cutting their benefits but if the government really wanted to boost it's revenue I know which loophole I'd tighten first. People earning above the 40% tax threshold should be paying 40% tax, not claiming they're on minimum wage and pocketing their salary via discreet unethical channels.

Consultants, contractors, restaurant / take away owners, cab drivers, to name but a few. They're all at it.

It is legal though, you are under no obligation to pay any more tax than you are required to. Anyone with DD's sort of earnings will be looking to mitigate their tax situation. I'm old enough to remember (and IIRC did) paying a massive salary in one week to avoid NI. Using dividends is the established way at present to minimise tax. It's all right to say that 40% tax rate avoidance should be clamped down on, but all 40% tax payers will say is clamp down on taxi drivers pretending to live on £8,500, builders and waiters pocketing cash, and shopkeepers creaming off cash before putting the money through their books. All the preceding are illegal, paying yourself by way of dividends isn't.
DD, you outside IR35?

BobProperty

dudleyboy wrote: »

Because it's white-collar fraud....

No it's not, it is perfectly legal. You might not like the social morality aspect but it is not fraud.
Ask yourself why contractors use limited companies. The answer goes back to the 70's and the taxman not believing that people can work for themselves through agencies. So, having being forced to use limited companies, people started using the tax breaks that are available to them.

neverdespairgirl

Dithering_Dad wrote: »

People also post financial details onto the Pension, investments, MFW, loans, house mortgage/purchase boards.

Nothing new here.

You mustard mitt he makes a fair point there!

neverdespairgirl

boinging wrote: »

Yes you're right.

All hail the big man, earning his big bucks, in his big house and with the big car...

I think he lives in a studio in Hoxton, from other posts. I could be wrong.

neverdespairgirl

dudleyboy wrote: »

So if you sleep well at night knowing that you pay the same income tax as the "small man" thanks to the exploitation of a cunningly conceived accountancy loophole, while also living a lavish lifestyle on what should be public money, which could be spent on improving our hospitals, schools, communities, safety and security, bailing out banks, etc, then so be it.

Every man is entitled if he can to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax.

Inland Revenue Commissioners v. Duke of Westminster (1936) 19 TC 490

No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.

Ayrshire Pullman Motor Services and Ritchie v. IRC (1929) 14 TC 754