Not illegal, but probably unethical?

kennyboy66_2

Dithering_Dad wrote: »

I just hate those tax credits SS, they're a crackpot idea and a huge overhead on the Inland Revenue. If Gordo wasn;t PM I reckon the new Chancellor would do away with them.

Just don;t take the money off people in the first place, that's the correct way to do it. If you want to help low income families then simply increase their tax free allowance and allow married couples to share their taxfree allowances, so that if one person works and one is a home maker, then they're not losing £5k's worth of tax free allowance. Simple, surely?

The answer would be to have much higher personal allowances, the problem is that 40% earners gain most by increased personal allowances. However they seem to manage to claw back the aged related personal allowances for higher income pensioners so I would imagine its not difficult to devise a scheme that works.

We badly need some simplification in the tax and benefits system.

Lotus-eater

Dithering_Dad wrote: »

It's a slow day in SAP HR today, so I was just quietly number crunching and looking at www.entitledto.co.uk.

I worked out that if I paid myself just my PAYE salary £972.50 and no dividends and paid my wife a salary of £360 with no dividends, we would receive enough of a top-up from child benefits and tax credits to be able to live comfortably off this sort of income. I'd qualify for quite a lot of tax credits (over £5k) and even help with my council tax.

Our mortgage would be interest only and our bills would have to be pared back to the bone (they are pretty much anyway, thanks to MSE), our pensions would be paid via my Ltd company and we'd also be able to have little treats if I was working away (such as free meals and nights in hotels).

This means that the remainder of my income (over £100k) would sit quietly in my company and gain interest, and once the recession was at an end, I could pay myself a huge one-off dividend and pay off my mortgage and buy a couple of BTL houses (prob not, I don't think I could stand the hassleof BTL - ok I'll settle for mortgage free and Ferrari!).

I'm sure this would be legal, but would it be ethical?

Support and hatred happily accepted for this Wednesday Afternoon debate

I believe we have spoken about this in the past.

As far as I know its not illegal and my accountant did tell me one year of maybe a way to wind up a company and withdraw all the profits without paying any tax, but he was umming and ahhing whether it would work or not.

I do know of someone who has done this for a long time. No income no maintenance to pay
I also know of someone else who has a family and does it with a large 6 figure sum in the (business) bank.

I sort of did it for one year to keep my income below a certain figure to receive nursery help.

Not very ethical, but looking at the banking industry, being ethical doesn't get you personally very far.

Dithering_Dad

It could eb a good way to get through a prolongued recession/depression. Keep as much money in the company accounts as possible and get your personal salary subsidised by tax credits.

The government would get their money in the long run via corp taxes and then subsequent income taxes and it'd be preferrable to you paying yourself a larger income and then folding the company and going on job seekers allowance!

We're doing the government and tax payers a favour by doing this scam erm scheme.

housesitter

steadysaver wrote: »

There is a place in America called W*nkers Corner

There is a place in Germany called W*nk and obviously there is F*uking in Austria as well.
Lucky enough to have been to both. Not a lot to see or do tho. :rolleyes:

Sorry.
I have nothing of value to contribute to this thread, but it makes for interesting reading as an ex-contrator and payer of 0% income tax whilst doing it.

Work with the system to beat it.
Ethics? The system has none so why should you?

drc

Sorry to go off topic slighty but can I just ask - if you 'own' a property (whether you have a mortgage or own it outright) this is not counted as equity for benefits etc?

So you could hav £25k in savings and not be eligible for any benefits but have a house worth £500k and no savings and be eligible for every benefit under the sun? I am hoping I am wrong otherwise something is surely amiss in the benefits system...

michaels

WE discussed this a few months ago on the benefits scroungers (or something similar) board. I am PAYE but contemplated making a huge additional voluntary pension contribution to achieve the same effect (although obviously I wouldn't be able to get the money back the following year but could gradually have recouped by no longer needing to make pension contributions for a few years).

Taking it to the next level could your company lend you any extra money you need to live on during the first tax year at zero interest and you could then pay back the loan in year 2 out of your earnings?

I might also add that the guy who suggested it on the Benefits Board got an awful lot of vitriol.

lonestar1

Shouldnt this be on the Benefits board ?

lostinrates

housesitter wrote: »

There is a place in Germany called W*nk and obviously there is F*uking in Austria as well.
Lucky enough to have been to both. Not a lot to see or do tho. :rolleyes:

Sorry.
I have nothing of value to contribute to this thread, but it makes for interesting reading as an ex-contrator and payer of 0% income tax whilst doing it.

Work with the system to beat it.
Ethics? The system has none so why should you?

Hmm, why have ethics?

I don't knw, it seems trying to be ethical can at times make life harder not better, but not always. My major problem would be living with my self if I thought I wasn't being so. I can be a pompous PITA and really find very uncomfortabl bing subjct to my own disapproval.

FWIW though its highly likely I shall be self employed in the future, and of course I will not want to pay over the odds for this dubious privilidge. However, as its highly likely my employ will be very low income anyway, by nature of the work not tax design, so perhaps its an ethical decision I will never have to take.

mr_jetlag

Dithering_Dad wrote: »

Yup! Do you work for the DFT then?

Word on the grapevine is that they hate it and were moaning to the press that it output's messages in German. lol.

Not when I configure it though :cool:

Buy cheap, buy twice.

DD - another SAP consultant? what are the odds? :rolleyes: For me the only thing worse than actually DOING config is all of the admin explaining what I've just done and how it'll revolutionize their lives forever.

michaels

Here we go:

http://forums.moneysavingexpert.com/showthread.html?t=738223&highlight=pension