Re: Lisa Nandy on taxing wealth
Originally Posted by
Donkeyman
->
Yes l would Bread! But lnhave a couple of questions, on the question
of businessess paying the tax they should, if a company makes
30million profit, it should in theory pay 30% tax on this, how is it
that they end up paying tax at lower rate than an individual?
Amazon is a good example of this!
And the other question is acompany can move its offices out of
uk whilst still working and earning inside the uk, consequently
Invoicing and accounting i is out side leading to manipulation etc!
Imo i money is earnt here it should be taxed here just like you and
me?
I dont know why these things are allowed but money talks is all l
can think of
I believe the laws are there but are only implemented in the case
of us poor saps?
Donkeyman! 😫😫😫
Corporation tax and income tax are two completely different things DM.
If a company makes a profit then there are 2 taxes that come out of it. One is the 19% corporation tax on the total amount of profit for a start. Then, on the remainder of the profit, it can be distributed to the share-holders in one of two ways.
1. In dividends, which accrues a 20% tax across the amount paid out.
2. As a directors loan, which has no tax on that tax year, but accrues until the debt is paid off (when its declared as dividends and taxed at 20%) plus interest of the loan is not paid off within a certain number of years (2 I think).
However ...
A company may not declare any profit at all because of investment or buying another company etc etc - all perfectly legitimate, so my building company (for example) may buy a new 20K van with the profit and that asset then becomes property of the company, written off over a number of years.
And ...
What other part of this is relevant is that Directors paying themselves in dividends (above the tax free allowance) do not pay National Insurance as they are not "payroll". This is because the self employed do not :
1. Have a guaranteed income
2. Receive sick pay
3. Receive holiday pay (including national holidays)
4. Receive maternity / paternity pay
5. Have a contributory pension
6. Have a guaranteed notice period
7. Receive severence Pay
8. Have guaranteed work (often not paid if no work)
9. Have a pay grade and a guaranteed pay-rise each year.
.. as they would as a payroll (staff) worker.
So, when it comes to taxation, self employed people (like me) have a choice - receive a higher income with no workers rights and pay less tax BUT having the high risk of no continuity of work, plus the anguish of long periods of unemployment with hardly any (or none) out of work benefits, plus the added burden of paying accountants, insurance, office equipment, IT equipment and your own expenses.... OR be a employee and play it safer.
So, as you can see there are bonafide businesses playing by the rules (like mine) and a few others who do not. It's similar for employees who receive "bungs", "cash in hand payments", "guvvy jobs" and the like. On one hand, the self employed and the employee AVOID tax by limiting their liabilities and on the other there are both companies and individuals (like the "guvvy jobs guy) who EVADE tax - which is illegal.
The bottom line is that there are benefits and risks to both of these types of worker but at the end of the day, as long as the tax that is required to be paid, is actually paid, there is no problems.
EDIT :
A quick calculation on 100K as salary or company profit would mean as an employee I would pay around 12-15K a year more tax (and NI) than the limited company, BUT the limited company would not get the benefits of the employee.
EDIT 2 :
Tax and NI are both taxes - they should be bundled together in my opinion.
EDIT 3 :
I have been informed by my company I work for that I fall under the new IR35 rules. This means I have to pay about £2000 a month extra in tax and in return I still get
1. No Pension
2. No Sick Pay
3. No holiday pay
4. No pay grade, bonus or expenses
5. etc
So as from 5pm tonight, my company will no longer exist and I will not be working at all. I simply refuse to work as a second class worker.