Suggestions for Osborne's July budget

ukcarper

cells wrote: »

if you get dividends from a company, any company be that a big FTSE 100 or your own little company you are charged effectively nothing until the 40% income tax band. but the company already paid 20% (or more) so in truth you pay 20%...on the 20% band....so there is nil advantage there

The treasury isn't as stupid as some posters like to think it is

What happens when you reach 40% band

michaels

cells wrote: »

if you get dividends from a company, any company be that a big FTSE 100 or your own little company you are charged effectively nothing until the 40% income tax band. but the company already paid 20% (or more) so in truth you pay 20%...on the 20% band....so there is nil advantage there

The treasury isn't as stupid as some posters like to think it is

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

cells

caronoel wrote: »

Any thoughts on the flat rate VAT scheme, which allows contractors to charge 20% VAT to their customer but only pass on a much smaller amount to the taxman:
http://www.contractoruk.com/vat/flat_rate.html

Surely you agree that this is patently unfair, and should be closed or, at the very least, severely limited?

do you even read your own links?

it shows you an example of the flat rate scheme which for sales of £60k benefits that example person by a total of only £550

clearly no one is going to join a flat rate scheme which costs them more money. The bloomin scheme is there to try and somewhat address the problem of no vat below X and full vat above X turnover. that is to simply say its meant to save small companies a little bit of money and admin

read your own links

caronoel

michaels wrote: »

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

Not on dividends they don't, which is why so many of these one man band companies pay themselves dividends rather than through PAYE.

Yet another tax avoidance loop hole to add to the ones above, as candidates for closing out.

cells

ukcarper wrote: »

What happens when you reach 40% band

its 32.5% tax at that level, but you also get a divi credit, but remember this is all after the company has already paid 20%

cells

michaels wrote: »

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

not on investment income, be it property rentals or interest on a bank account or dividend from ANY company not just your own

to make companies pay NI on dividend income or for people who receive dividends to pay NI would be silly and complex especially considering most dividends are paid to other companies eg your pension fund.

I would be about half in support for such a move, but know the tax burden will fall mostly on pension funds. Also it would create some really odd things eg there would be a big disincentive to invest in UK companies and you would be more likely to invest in foreign ones

caronoel

cells wrote: »

do you even read your own links?

it shows you an example of the flat rate scheme which for sales of £60k benefits that example person by a total of only £550

clearly no one is going to join a flat rate scheme which costs them more money. The bloomin scheme is there to try and somewhat address the problem of no vat below X and full vat above X turnover. that is to simply say its meant to save small companies a little bit of money and admin

read your own links

Oh dear - someone is getting irrational.




It's quite simple really.

Hire yourself out to customer for say £500/day plus VAT of £100, and pass HMRC only £70 of the £100 VAT charge.

Quite a nice little earner, at the taxpayer's expense, if you do it consistently over the period of a year.

You really shouldn't take these discussions so seriously, you know.

cells

caronoel wrote: »

Not on dividends they don't, which is why so many of these one man band companies pay themselves dividends rather than through PAYE.

Yet another tax avoidance loop hole to add to the ones above, as candidates for closing out.

the general view of people who have actually been in self employment or the business world is that it is more risk than being a salaried worker. There should be a small tax advantage in my view to take into account the burden of time and money in administering a whole independent legal entity and the very real risk of losing all your investment/time in a venture

you too benefit from this in the form of lower prices as there is more competition.

of course you could go the whole other way and charge them MORE than than salaried workers and in time you will get a system with a few huge corporations and no little ones and higher prices to boot


anyway thats all from me.
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

caronoel

cells wrote: »

...of course you could go the whole other way and charge them MORE than than salaried workers and in time you will get a system with a few huge corporations and no little ones and higher prices to boot

All the ordinary worker wants is fairness

It is simply unfair that contractors can charge against tax things like new iPads, commuting costs, work lunches, the "missus" as an "employee", etc etc etc while everyone else pays the bill for this.

anyway thats all from me.
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

Bye bye now.

We will miss you searing wit and intellect

cells

caronoel wrote: »

Oh dear - someone is getting irrational.



It's quite simple really.

Hire yourself out to customer for say £500/day plus VAT of £100, and pass HMRC only £70 of the £100 VAT charge.

Quite a nice little earner, at the taxpayer's expense, if you do it consistently over the period of a year.

You really shouldn't take these discussions so seriously, you know.

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