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Muddy
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UK
Joined: Sep 2015
Posts: 31,286
Muddy is female  Muddy has posted at least 25 times and has been a member for 3 months or more 
 
16-03-2020, 04:13 PM
61

Re: Lisa Nandy on taxing wealth

Absolutely there is nothing wrong .

( except in the Queen inheriting £50 million from her unlamented old mother and not paying a penny of the £20 million owed on it

They can afford it .
So they give their child a house worth £500k
If they live for seven years that’s £200 k tax saved on IHT
Fred blogs has a small house worth £350k and £10k savings which he leaves to his three children
His estate is £35k over the nil rate band .
That means before anything else the government takes 40% of this ie 14k IHT
£14 k that Fred earned and paid tax on .

I happen to think that is not right .
Donkeyman
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Donkeyman is offline
Melton,United Kingdom
Joined: Jan 2019
Posts: 9,088
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16-03-2020, 04:18 PM
62

Re: Lisa Nandy on taxing wealth

Originally Posted by Bread ->
Whats the problem with wealthy people buying their kids a house etc ?

I would if I could afford it, wouldn't you ?
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! 😫😫😫
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Bread
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Bread is offline
Sudbury, United Kingdom
Joined: Dec 2018
Posts: 10,656
Bread is male  Bread has posted at least 25 times and has been a member for 3 months or more 
 
16-03-2020, 04:22 PM
63

Re: Lisa Nandy on taxing wealth

Originally Posted by Muddy ->
Absolutely there is nothing wrong .

( except in the Queen inheriting £50 million from her unlamented old mother and not paying a penny of the £20 million owed on it

They can afford it .
So they give their child a house worth £500k
If they live for seven years that’s £200 k tax saved on IHT
Fred blogs has a small house worth £350k and £10k savings which he leaves to his three children
His estate is £35k over the nil rate band .
That means before anything else the government takes 40% of this ie 14k IHT
£14 k that Fred earned and paid tax on .

I happen to think that is not right .
Why should people be taxed on inheritance ? The houses are bought on taxed income...

Do you want your kids to pay tax on the inheritance of your house you bought and paid for out of income you had already paid tax on ?

I wouldn't
Donkeyman
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Donkeyman is offline
Melton,United Kingdom
Joined: Jan 2019
Posts: 9,088
Donkeyman is male  Donkeyman has posted at least 25 times and has been a member for 3 months or more 
 
16-03-2020, 04:22 PM
64

Re: Lisa Nandy on taxing wealth

Originally Posted by The Artful Todger ->
No, tax avoidance. Perfectly legal.
Strictly legal because the government has been lobbied to make
it so Todgy!
If every individual tried this crap on we would get short shrift!

Donkeyman!
Donkeyman
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Donkeyman is offline
Melton,United Kingdom
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Posts: 9,088
Donkeyman is male  Donkeyman has posted at least 25 times and has been a member for 3 months or more 
 
16-03-2020, 04:24 PM
65

Re: Lisa Nandy on taxing wealth

Originally Posted by Muddy ->
Absolutely there is nothing wrong .

( except in the Queen inheriting £50 million from her unlamented old mother and not paying a penny of the £20 million owed on it

They can afford it .
So they give their child a house worth £500k
If they live for seven years that’s £200 k tax saved on IHT
Fred blogs has a small house worth £350k and £10k savings which he leaves to his three children
His estate is £35k over the nil rate band .
That means before anything else the government takes 40% of this ie 14k IHT
£14 k that Fred earned and paid tax on .

I happen to think that is not right .
👍👍👍👍
Donkeyman!
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Muddy
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Muddy is offline
UK
Joined: Sep 2015
Posts: 31,286
Muddy is female  Muddy has posted at least 25 times and has been a member for 3 months or more 
 
16-03-2020, 04:28 PM
66

Re: Lisa Nandy on taxing wealth

Originally Posted by Bread ->
Why should people be taxed on inheritance ? The houses are bought on taxed income...

Do you want your kids to pay tax on the inheritance of your house you bought and paid for out of income you had already paid tax on ?

I wouldn't
Of course they will have too !
That’s my point !
The very rich can give their excess away before they die whereas the person who has one major asset ( this home ) cannot as they need to live in it .

And I not making myself clear ?
If your house and assets are worth more than £325k your children will have to pay 40% on anything over that when you die .

So on every £1000 you leave they will have to give £400 to the tax man .

Course if you have nothing that’s ok nothing to pay .
But because of the ridiculous price of houses in parts of this country many people are caught out by this tax that used to only apply to verywealthy individuals

Some countries ie Australia do not have inheritance tax.
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Bread
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Bread is offline
Sudbury, United Kingdom
Joined: Dec 2018
Posts: 10,656
Bread is male  Bread has posted at least 25 times and has been a member for 3 months or more 
 
16-03-2020, 04:43 PM
67

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.
Donkeyman
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Donkeyman is offline
Melton,United Kingdom
Joined: Jan 2019
Posts: 9,088
Donkeyman is male  Donkeyman has posted at least 25 times and has been a member for 3 months or more 
 
16-03-2020, 07:57 PM
68

Re: Lisa Nandy on taxing wealth

Originally Posted by Bread ->
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.

Thanks for the comprehensive explanation Bread! And l understand
it completely as l was in that situation myself a few years back and
I was in the same quandry of how much to pay myself and
l chose to pay myself less and to let any profi be taxed via the company tax at year end, and as you say got no sick pay/ holiday pay/
unemployment or other so called benefits so l know your problem?
However most of my questions concern the larger companies and
corporation that are not owner operated as yo and l were, butnare
run by management teams that usually have no knowledge of the
product or service that they deal in? But know how to push paper
around to good effect? I think l have a similar attitude to you when
it comes to holding onto the oney tha is so hard won!
However l used an accountant to sort things out and usually got
some benefits via expenses etc at year end!
Donkeyman! 😜😜😜
Bread's Avatar
Bread
Chatterbox
Bread is offline
Sudbury, United Kingdom
Joined: Dec 2018
Posts: 10,656
Bread is male  Bread has posted at least 25 times and has been a member for 3 months or more 
 
16-03-2020, 08:24 PM
69

Re: Lisa Nandy on taxing wealth

Originally Posted by Donkeyman ->
Thanks for the comprehensive explanation Bread! And l understand
it completely as l was in that situation myself a few years back and
I was in the same quandry of how much to pay myself and
l chose to pay myself less and to let any profi be taxed via the company tax at year end, and as you say got no sick pay/ holiday pay/
unemployment or other so called benefits so l know your problem?
However most of my questions concern the larger companies and
corporation that are not owner operated as yo and l were, butnare
run by management teams that usually have no knowledge of the
product or service that they deal in? But know how to push paper
around to good effect? I think l have a similar attitude to you when
it comes to holding onto the oney tha is so hard won!
However l used an accountant to sort things out and usually got
some benefits via expenses etc at year end!
Donkeyman! 😜😜😜

I'm sure there are loads of ways that big companies avoid taxes DM but from what I've seen, its nothing illegal. It's not right what they do sometimes but you can't blame them for using loopholes to pay shareholders to attract further investments.
 
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