Suggestions for Osborne's July budget

cells

caronoel wrote: »

All the ordinary worker wants is fairness

that's all fine and dandy but the people who risk their own savings rightly want to be rewarded for it or they will just do what you do and we can have a few mega corps instead

I know one lady that lost her home her life savings and her marriage in a failed micro business. Are you or "the ordinary worker" going to write her a cheque for fairness?

caronoel

cells wrote: »

You have it wrong again and again

in your example of charging £500 a day plus £100 VAT, using the IT contractor flat rate of 14.5%..... they pay 14.5% on the £600 total = £87.60

So they save a whole £12.40 not £30

If they are lucky enough to keep that £500+VAT per day job for a year (many contractors are in and out of work) and work 48 weeks x 5 days a week that is a £2976 saving per year as a upper limit

but as noted the scheme is meant to save a bit of money and admin no one is going to do more admin to join a scheme to lose money:rotfl:. £3k a year saving isn't that much and that's only if you are lucky to be on £500+Vat per day for a whole year which most micro business are nowhere near so the saving for most people will be lower than that

Oohh hurray! You're back

I thought you'd stormed off when it got a bit technical.

Lovely to have you back, and nice to have a worked example.

So you are saying that this tax wheeze is still worth thousands of pounds per annum to a small business? This is in addition to all the other loopholes identified above.

Nice work if you can get it!

:rotfl:

ukcarper

michaels wrote: »

Cos of course no one pays NI at 12% do they....

Would they not also save employers NI.

Mortgagefreeman

caronoel wrote: »

We will miss you searing wit and intellect

We won't miss yours. Not that you had any in the first place.

Thrugelmir

cells wrote: »

if you want to change places with a self employed micro business person I know plenty who would love a salaried job and will swap with you

While some changes are necessary. I agree whole heartedly with this statement. There's plenty of people who would love a regular monthly pay cheque, holiday pay, sickness pay and pension contributions to name just some of the benefits. Until you've done it personally there's no appreciation.

cells

cells wrote: »

You have it wrong again and again

in your example of charging £500 a day plus £100 VAT, using the IT contractor flat rate of 14.5%..... they pay 14.5% on the £600 total = £87.60

So they save a whole £12.40 not £30

If they are lucky enough to keep that £500+VAT per day job for a year (many contractors are in and out of work) and work 48 weeks x 5 days a week that is a £2976 saving per year as a upper limit

but as noted the scheme is meant to save a bit of money and admin no one is going to do more admin to join a scheme to lose money:rotfl:. £3k a year saving isn't that much and that's only if you are lucky to be on £500+Vat per day for a whole year which most micro business are nowhere near so the saving for most people will be lower than that

I had actually forgotten something in that post,

Although there is a saving of £2976 in that example. Once in the flat rate scheme you can not claim any VAT on things you buy so the actual saving is less

For example if you rent a office for £10,000 plus VAT. Have an accountant for £1000 plus VAT and buy £2000 plus VAT of other goods your £2976 saving drops to a £376 saving

And this is a scheme that is meant to save money why would anyone bother with the time and expense of joining otherwise?

caronoel

cells wrote: »

I had actually forgotten something in that post,

Although there is a saving of £2976 in that example. Once in the flat rate scheme you can not claim any VAT on things you buy so the actual saving is less

For example if you rent a office for £10,000 plus VAT. Have an accountant for £1000 plus VAT and buy £2000 plus VAT of other goods your £2976 saving drops to a £376 saving

And this is a scheme that is meant to save money why would anyone bother with the time and expense of joining otherwise?

So....

it now seems that you agree that the scheme should be closed. along with many of the tax loopholes identified in this thread.

:T:T

caronoel

ukcarper wrote: »

Would they not also save employers NI.

Yep, they would.

The tax loopholes are many and deep for contractors, and all should be looked at in the budget.

caronoel

Thrugelmir wrote: »

While some changes are necessary. I agree whole heartedly with this statement. There's plenty of people who would love a regular monthly pay cheque, holiday pay, sickness pay and pension contributions to name just some of the benefits. Until you've done it personally there's no appreciation.

Against that, the decision to go self-employed shouldnt be driven by the (many) tax advantages.

Something is wrong where tax skews investment and employment decisions.

What is needed is a level playing field for all. This will only be achieved through removing these tax loopholes.

cells

caronoel wrote: »

So....

it now seems that you agree that the scheme should be closed. along with many of the tax loopholes identified in this thread.

:T:T

what makes you say that? I showed an example where you could save upto £3k if you were paid a good contractors rate and were in work all year but I had forgotten to subtract the things you can not claim for while in the scheme so the £3k figure will actually be lower

I don't think there are many people on the flat rate scheme and I dont mind it being closed but its nowhere near as good a benefit as you claim.

I think its actually meant to be for businesses that have lots of receipts eg small retail places with maybe tens of thousands of receipts to help them with their admin so i wouldn't get rid of it on your not so expert consideration. if you think IT contractor rate is too low up it by one point instead