Share dividend tax increase

MoJoeGo

Late to the party as always but my 2c:

1) I'm ok with this in principle (speaking from the perspective of a family income that will pay several thousand more a year as a result - uncapped NI basically goes from 2% to 3.25%!). Provided I can actually see a demonstrable link to improved standards of care. And that's the bit I'm sceptical about.

2) I do however think there should have been a higher starting point for the extra 1.25% - and/or perhaps some sort of exemption for people working in medical/care roles (yes I know that would get messy in practise but still...)

3) Without wishing to stoke the IHT debate again, the thing that is often overlooked is that it's such an EASY tax to avoid. And those that are fortunate to have larger estates are also (very generally) better educated/clued up and able to pay for good estate planning services. Whatever you believe is right or wrong here, it would take a pretty draconian set of tax law changes to make much of a dent there...

4) I'm very interested to see how the financial services industry responds in terms of insurance products to cover maximum care costs. Especially given that the devil is in the detail there - to be attractive to me, I'd want any such product to cover both the capped care as well as the uncapped board and lodging costs that weren't really clearly outlined...

On that last point, the cynic in me says that capping the care costs could well even further reduce the quality of council funded care (if such a thing were possible). But that will be a longer term decline...

Prism

Daliah said:

eskbanker said:

Daliah said:

Prism said:

It affects me as a company director paying myself dividends but I don't pay national insurance. Also, dividend tax only starts after the tax free allowance (plus the £2k) rather than the NI which begins at the secondary threshold. So I will pay a little less than a PAYE employee. I also won't need to pay the employer NI increase.

Seems like a reasonably fair tax overall that gets everyone to pay a little.

@Prism: if you don't pay NI, are you foregoing your state pension rights?

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions highlights that you can earn up to the primary threshold of £797 per month without paying NI, but as long as your income exceeds the lower earnings limit (£520/month) then "Employees do not pay National Insurance but get the benefits of paying [such as pension rights]", so many will calibrate their earnings accordingly....

@Prism seems to be self-employed though

I am a director of my own limited company and so can pay myself as Eskbanker suggests.

Alexland

Prism said:

I am a director of my own limited company and so can pay myself as Eskbanker suggests.

Let's hope Eskbanker remains fair when setting your income.

MoJoeGo

Alexland said:

Prism said:

I am a director of my own limited company and so can pay myself as Eskbanker suggests.

Let's hope Eskbanker remains fair when setting your income.

Minimum wage plus tips?

Daliah

Prism said:

Daliah said:

eskbanker said:

Daliah said:

Prism said:

It affects me as a company director paying myself dividends but I don't pay national insurance. Also, dividend tax only starts after the tax free allowance (plus the £2k) rather than the NI which begins at the secondary threshold. So I will pay a little less than a PAYE employee. I also won't need to pay the employer NI increase.

Seems like a reasonably fair tax overall that gets everyone to pay a little.

@Prism: if you don't pay NI, are you foregoing your state pension rights?

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions highlights that you can earn up to the primary threshold of £797 per month without paying NI, but as long as your income exceeds the lower earnings limit (£520/month) then "Employees do not pay National Insurance but get the benefits of paying [such as pension rights]", so many will calibrate their earnings accordingly....

@Prism seems to be self-employed though

I am a director of my own limited company and so can pay myself as Eskbanker suggests.

So are you saying you get state pension rights without ever paying NI?

sevenhills

Albermarle said:

In my intermittent visits to NHS hospitals ( mainly with family for outpatients/day surgery) there seems to be an excess of staff rather than a shortage .
Clearly in some areas that is not the case though.

Surely that is desirable? I am sure patients would be suing the NHS if they were whizzed through A+E like on an Aldi conveyor belt.

p00hsticks

Daliah said:

Prism said:

Daliah said:

eskbanker said:

Daliah said:

Prism said:

It affects me as a company director paying myself dividends but I don't pay national insurance. Also, dividend tax only starts after the tax free allowance (plus the £2k) rather than the NI which begins at the secondary threshold. So I will pay a little less than a PAYE employee. I also won't need to pay the employer NI increase.

Seems like a reasonably fair tax overall that gets everyone to pay a little.

@Prism: if you don't pay NI, are you foregoing your state pension rights?

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions highlights that you can earn up to the primary threshold of £797 per month without paying NI, but as long as your income exceeds the lower earnings limit (£520/month) then "Employees do not pay National Insurance but get the benefits of paying [such as pension rights]", so many will calibrate their earnings accordingly....

@Prism seems to be self-employed though

I am a director of my own limited company and so can pay myself as Eskbanker suggests.

So are you saying you get state pension rights without ever paying NI?

Yes - anyone earning between the Lower Earnings Limit and the Primary Threshold gets NI credits without actually paying any NI (as do people claiming certain benefits such as Child Benefit, Univeral Credit, ESA and JSA)

Thrugelmir

IanManc said:

sevenhills said:

Albermarle said:

In my intermittent visits to NHS hospitals ( mainly with family for outpatients/day surgery) there seems to be an excess of staff rather than a shortage .
Clearly in some areas that is not the case though.

Surely that is desirable? I am sure patients would be suing the NHS if they were whizzed through A+E like on an Aldi conveyor belt.

Recently the whiteboard in my local A+E bore a message informing patients that the waiting time before they would be seen was currently 13.5 hours. And no, that isn't a typo.

The patients may have thought a conveyor belt would be preferable.  🤔

Major incidents can quickly absorb capacity. 

Prism

Daliah said:

Prism said:

Daliah said:

eskbanker said:

Daliah said:

Prism said:

It affects me as a company director paying myself dividends but I don't pay national insurance. Also, dividend tax only starts after the tax free allowance (plus the £2k) rather than the NI which begins at the secondary threshold. So I will pay a little less than a PAYE employee. I also won't need to pay the employer NI increase.

Seems like a reasonably fair tax overall that gets everyone to pay a little.

@Prism: if you don't pay NI, are you foregoing your state pension rights?

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions highlights that you can earn up to the primary threshold of £797 per month without paying NI, but as long as your income exceeds the lower earnings limit (£520/month) then "Employees do not pay National Insurance but get the benefits of paying [such as pension rights]", so many will calibrate their earnings accordingly....

@Prism seems to be self-employed though

I am a director of my own limited company and so can pay myself as Eskbanker suggests.

So are you saying you get state pension rights without ever paying NI?

Yes that is currently the case although I did contribute for around 15 years while employed.

lozzy1965

Prism said:

Daliah said:

Prism said:

Daliah said:

eskbanker said:

Daliah said:

Prism said:

It affects me as a company director paying myself dividends but I don't pay national insurance. Also, dividend tax only starts after the tax free allowance (plus the £2k) rather than the NI which begins at the secondary threshold. So I will pay a little less than a PAYE employee. I also won't need to pay the employer NI increase.

Seems like a reasonably fair tax overall that gets everyone to pay a little.

@Prism: if you don't pay NI, are you foregoing your state pension rights?

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions highlights that you can earn up to the primary threshold of £797 per month without paying NI, but as long as your income exceeds the lower earnings limit (£520/month) then "Employees do not pay National Insurance but get the benefits of paying [such as pension rights]", so many will calibrate their earnings accordingly....

@Prism seems to be self-employed though

I am a director of my own limited company and so can pay myself as Eskbanker suggests.

So are you saying you get state pension rights without ever paying NI?

Yes that is currently the case although I did contribute for around 15 years while employed.

And it is - or at least was - the case for many single owner 'limited companies' who work as contractors.  It was particularly rife for IT in the NHS and in Banking.  The company gets paid a huge salary, the individual pays themselves the minimum 'wage' to qualify for yearly NI contributions without actually paying NI, then tops up with dividends/bonuses etc.  Boris has done quite well to cover off this avenue by including NI and Dividends in the new tax.  Lots of people who 'work for themselves' have - or had -avenues to 'earn' as much as they can whilst paying 'tax' as little as they can - possibly including MP's of all parties. 
Note the word "possibly"!