IT Contractor, Private Ltd Company & Tax credit

irs101

martinpike wrote:

That's not what this post is about. It is clearly about tax avoidance.

And it's not only about avoiding income tax, which is bad enough, it's about claiming benefits too, which is taking the absolute mickey in my opinion.

You're absolutely right, it is about tax avoidance - and that is completely legal and is practiced my millions of people around the world, even on tax credits - the accountancy magazines run articles on tax credit planning.

But that isn't to say I endorse it - so please don't tell me I do - I went into detail because the OP could get into a lot of confusion if I tell him that there is a way that he can save money, but don't point out the complications and problems. That would be irresponsible of me.

There are all sorts of tax schemes using clever devices like offshore trusts etc, they're legal, but the Chancellor has made it clear that he doesn't approve of them. If enough people use a particular strategy he will introduce legislation to stop it. That's what happened with the extra tax being slapped on dividends on companies as are being discussed here - the tax regime is much less favourable than it was.

I suspect HMRC will crack down on this sort of thing eventually, but until they do the rules say that the OP is entitled to it if he/she chooses to claim it. But it's not something to be entered into lightly. There are complications (as another poster has pointed out) and proper financial advice should be sought.

irs

dark_stranger

martinpike wrote:

That's not what this post is about. It is clearly about tax avoidance.

And it's not only about avoiding income tax, which is bad enough, it's about claiming benefits too, which is taking the absolute mickey in my opinion.

Hi Martin, I am sorry you feel this way, but I dont plan to do anything illegal (this time), but simply use the system to my advantage.

martinpike

irs101 wrote:

You're absolutely right, it is about tax avoidance - and that is completely legal and is practiced my millions of people around the world, even on tax credits - the accountancy magazines run articles on tax credit planning.

But that isn't to say I endorse it - so please don't tell me I do - I went into detail because the OP could get into a lot of confusion if I tell him that there is a way that he can save money, but don't point out the complications and problems. That would be irresponsible of me.

irs

Thanks for acknowledging what the post is about, at least you're being honest there, unlike some who were trying to hide behind some form of distasteful poverty pleading screen.

As for you endorsing it, I'm afraid we're going to have to agree to disagree on that one.

I still maintain that the thrust behind the post is immoral, and the fact that it is practiced by many others and is legal does not change that fact in my mind.

dark_stranger

Cheers girls & guys for all your advise. I am currently obtaining vast amounts of information from sources such as this & also plan getting myself an accountant. The purpose of this thread was not to be a part of benefit fraud or cheat the governement out of tax, but simply to see what options are available to me so that i am better of financial for working my B*lls off (yes i am a man), so that my kids benefit & not be worse off than before.

martinpike

dark_stranger wrote:

Hi Martin, I am sorry you feel this way, but I dont plan to do anything illegal (this time), but simply use the system to my advantage.

That's your decision. I come from a family where my parents refused child benefit because they felt it was their responsibility alone to raise their children.

Personally, I wouldn't be able to sleep at night.

It takes all sorts to make the world.

dark_stranger

martinpike wrote:

That's your decision. I come from a family where my parents refused child benefit because they felt it was their responsibility alone to raise their children.

Personally, I wouldn't be able to sleep at night.

It takes all sorts to make the world.

Thats very commendable of you, but if there is anything I can do to give my kids that little bit extra security, albeit financial or emotional, i will do it. I'm just glad i never told you how much I will be earning as that would have set you right off. Anyway, like you said, this caused a good debate & all views were expressed.

Thanks,

martinpike

dark_stranger wrote:

Thats very commendable of you, but if there is anything I can do to give my kids that little bit extra security, albeit financial or emotional, i will do it. I'm just glad i never told you how much I will be earning as that would have set you right off. Anyway, like you said, this caused a good debate & all views were expressed.

Thanks,

Nah, it wouldn't have set me off. I don't do so badly myself as it happens, as I have a good salary, pension, healthcare, sick pay and all that malarkey. I work in IT alongside many contractors, and I'm always giving them a hard time about it. None have ever engaged me in a philosophical debate about it for some reason.

I still ain't happy with paying tax for you to claim as benefits, but I'm not going to lose any sleep over it!

Anyway, like you said, a good debate was had by all.

Anyone fancy the philosophical one?

irs101

dark_stranger wrote:

I'm just glad i never told you how much I will be earning as that would have set you right off.

I hope you haven't just given the game away there. If you have certainty about your 'earnings' it indicates that you could well be caught by the IR35 rules (it's one of the tests they use), which would restrict the tax and NICs advantages of being a limited company.

irs

martinpike

martinpike wrote:

Anyone fancy the philosophical one?

Hello? Hello?

Who turned out the lights???

:beer: