The Rich Got Richer?

CLAPTON

Graham_Devon wrote: »

It takes two to tango in this case.

Firstly it needs the tax credits system.

Secondly it needs the employers to design their employment policy to milk it.

'milk it'?

you mean that employers have specifically acknowledged the will of parliament and adjust their policies accordingly.

all three parties have supported this mad tax credits policy, in the full knowledge of its perverse incentives.

Graham_Devon

CLAPTON wrote: »

'milk it'?

you mean that employers have specifically acknowledged the will of parliament and adjust their policies accordingly.

all three parties have supported this mad tax credits policy, in the full knowledge of its perverse incentives.

Sorry, I forgot this was capitalist landlords are us for a second.

Will of parliament. LOL.

wotsthat

Tax credits encourage businesses to invest in unproductive activities, provide an incentive for employees to work less hours all at the expense of the taxpayer. Lose - lose - lose.

CLAPTON

Graham_Devon wrote: »

Sorry, I forgot this was capitalist landlords are us for a second.

Will of parliament. LOL.

A reasonable employer will wish to pay a little as possible for suitable and qualified people to do the job, bearing in mind all the circumstances;
what else would a reasonable employer do?

The tax credits and general benefits system creates specific incentives for people to adjust their hours to suit the benefits: obviously they respond to those incentives.

Parliament can change /scrap the madness and improve productivity in the economy to the benefit of all.

Mallotum_X

Not just the tax credit system but also employers national insurance. That only kicks in after a set level per week (i cant remember the exact amount but circa 20 hours per week at nmw) hence many firms not wanting to offer full time roles. Abuse of the system or just unintended consequences of a low pay world.

In my role I am responsible for recruitment into my team. Good London based graduates with very 12/24months of work experience are able to command £30k+, with us then spending the next 6 to 12 months training them to find out whether they are actually were any good or not.

Samsonite1

I guess not many of you have seen the pay increases at the top that I have seen, but it seems unanimous that at the lower end of the scale, people are definitely worse off. Maybe I see increases at the top due to the fact that I only work at companies that pay for outside consultants to do a lot of work, so they have made a big skills/experiences hole in the company that falls between the highly paid managers and the lowly paid ground crew.

The funny thing is that the hole was created when experienced, middle-tier workers moved on due to not getting paid enough. Many of those people moved into consulting and those companies are now paying £1250 per day for the same people (some times literally the same ex-employee).

PasturesNew

Graham_Devon wrote: »

The 15 hours doesn't qualify for the benefits. That one extra hour needed for the benefits rules the job out for great swathes of people. The higher rate of pay doesn't come close to a NMW job with added tax credits.

Except they do the Tesco job, then sign up as self-employed Avon rep for 1 hour/week

Graham_Devon

PasturesNew wrote: »

Except they do the Tesco job, then sign up as self-employed Avon rep for 1 hour/week

I've heard of people delivering parcels in their own car on a self employed basis for up to 3 hours a week. That then, so long as they are self employed entitles them to all the tax credits and other benefits etc.

Is Avon being used in the same way? That used to be simply a way of getting some pocket money!

lisyloo

I thought selling things on ebay was the latest wheeze to claim to be self-employed.

wotsthat

Graham_Devon wrote: »

I've heard of people delivering parcels in their own car on a self employed basis for up to 3 hours a week. That then, so long as they are self employed entitles them to all the tax credits and other benefits etc.

Is Avon being used in the same way? That used to be simply a way of getting some pocket money!

'Self employment' is used by many rent seekers to aid the management of benefit flow.

The definitions have changed. Prior to April there was little restriction on what self employment meant (for the purposes of claiming WTC) - basically doing something for payment.

I hadn't realised but from this tax year this appears to have been tightened up and now self employment means 'For tax credit purposes, HMRC define self-employed as meaning the self-employed activity is done on a commercial basis with a view to realising a profit and it must be organised and regular.'

Apparently HMRC are going to be backchecking previous claims to ensure they meet this new requirement.

http://www.revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/self-employed/

As I look at the requirements, particularly the records that HMRC expect a self employed person to keep, it looks like quite a tightening but I suppose how strictly HMRC will interpret or enforce the rules.