More executives back Tory National Insurance plans

Thrugelmir

kennyboy66 wrote: »

What difference does it make to the owners of a company whether NIC goes up or Corporation tax goes up ?

It doesn't make the slightest difference (unless the company is making a loss perhaps).

CT is determined and paid after a profit is made. NIC is liable whatever the financial outcome is. Its a cash drain more than anything. Companies pay over their liabilities by the 20th of the month following. There's no extended payment terms.

Best examples are any business opening new a shop, factory, increasing headcount to sell a new product etc. From day one the Company is burdened with higher costs. Yet profit may two to three years into the future. As the venture is initially loss making.

kennyboy66_2

Thrugelmir wrote: »

CT is determined and paid after a profit is made. NIC is liable whatever the financial outcome is. Its a cash drain more than anything. Companies pay over their liabilities by the 20th of the month following. There's no extended payment terms.

Best examples are any business opening new a shop, factory, increasing headcount to sell a new product etc. From day one the Company is burdened with higher costs. Yet profit may two to three years into the future. As the venture is initially loss making.

All fair points, but by the same argument increasing corporation tax favours, low productivity, low margin businesses compared with capital intensive, high productivity, high margin businesses.

Thrugelmir

kennyboy66 wrote: »

All fair points, but by the same argument increasing corporation tax favours, low productivity, low margin businesses compared with capital intensive, high productivity, high margin businesses.

Low margin businessess are often labour intensive. A seasonal fruit business has little choice but to employ labour and incur higher costs.

A piece of expensive equipment can be run for 18 hours rather than 12, with a minimal increase in overhead. So profit is greatly increased.