The new dividend tax - does this mean contractors who paid themselvs big divvies

wotsthat

theEnd wrote: »

There seems to be a presumption that employees are 100% honest when declaring their benefits in kind, but contractors are not.

Employees are probably just sore because they've less opportunity for fiddling their taxes.

Pennywise

kabayiri wrote: »

The best scam involved the use of these umbrella companies of dubious nature, often based out of Isle of Man or similar.

A fellow work colleague told me how he got 90%+ of gross as pay.

Of course, it wasn't "pay" as such; just a series of loans on ridiculously generous neverending payment terms -- reminds me of Greece really

These really annoyed HM Gov and co. I think George alluded to these as well in the budget?

HMRC and the courts have been challenging those IOM and loan schemes for a few years now. Lots of contractors have been landed with six figure tax bills that they're having to sell their houses to pay. That type of scheme has been dead in the water for a few years now.

lisyloo

There seems to be a presumption that employees are 100% honest when declaring their benefits in kind

Mine get declared by my employer (P11D), so I have no opportunity to be less honest even if I wanted to be.

theEnd

lisyloo wrote: »

Mine get declared by my employer (P11D), so I have no opportunity to be less honest even if I wanted to be.

Everywhere I've worked, everyone gets a mobile and a laptop (top of the range). In theory any personal calls they make on the mobile should be a benefit in kind, but not the phone or the laptop. Last place I was employed, we even stopped doing that.

They could lend the laptop to their kid for a school project for all anyone cares, who's going to check or declare that?

That's probably £2k of tax free benefits. Maybe £40/year on the P11D as a benefit in kind?

I would suggest that is fairly normal.

lisyloo

Maybe £40/year on the P11D as a benefit in kind?

I think you are correct that no-one cares about occassional use of laptops, phones, tea bags, charging your phone at work etc.

I can't honestly see how you get £2K worth of tax free benefits from that.

That's completely different to putting a family holiday or family car through the business without paying tax on it.
Surely you can see that.

TheBlueHorse

say someone went home and found a biro in their pocket from work and used it for writing a shopping list (for non-business purposes) - I am happy for that not to be taxed as a BIK (a bik hahaha)

chewmylegoff

theEnd wrote: »

But say you work from home once in a while and ask your employee to provide fan as it's too hot at home. No difference.

I assume you mean your employer?

Don't know about yours but if I asked mine for a desk fan for my house I would be told to buy my own desk fan...

Nikkster

chewmylegoff wrote: »

I assume you mean your employer?

Don't know about yours but if I asked mine for a desk fan for my house I would be told to buy my own desk fan...

Or that I should work from the office if my home conditions were unsuitable.

leveller2911

I've never understood how the self employed can work for a single company all year round and not be classed as an employee. In the past 20 years I've met 100's. They don't price up work, they don't decide what hours they work, in may cases they don't supply materials, don't supply their own vehicles,tools etc etc etc but they can still claim to be self employed contractors. The vast majority are not taking a financial risk.

Its just a con to allow employers to not pay NI and lay off the workers with a minutes notice.

Not forgetting all those 1 man band Ltd companies who paid themselves NMW ,claim working tax credits and then pay themselves a nice Divi at the end of the year. The sorry fact is until we trim the tax rules back to a basic system there will always be ways found to pay as little tax as possible.

theEnd

lisyloo wrote: »

I think you are correct that no-one cares about occassional use of laptops, phones, tea bags, charging your phone at work etc.

I can't honestly see how you get £2K worth of tax free benefits from that.

That's completely different to putting a family holiday or family car through the business without paying tax on it.
Surely you can see that.

An iPhone 6 and a decent Mac Book and you're at £2k.

I've never heard of anyone putting a family holiday through, but I'm sure it's been done.

I'm also not sure on the company car taxation. I've never had one, my accountant said they're taxed so much that it's not worth it, but I think the rules on electric cars are different, so might be worth while now.

But my point is that these benefits are often available for employees too and the taxation is exactly the same.