Section 660A - Changes on the horizon?

[Maslins]

IMO, to be legislated away over the next parliament or two. The proposals now in the long grass will stay there. Make no mistake, the tax benefits enjoyed to date by contractors are rapidly coming to an end.

I agree with the tail end of your comment, but I don't agree with your earlier one (that divi taxes make it irrelevant).

Doesn't matter whether dividend allowance goes down and/or tax rates go up. As long as marginal rates of tax increase as income increases, there's going to be incentive to transfer income from higher earning individuals to lower ones. This applies whether the low rates are 0% and high rates 25% (as a couple of years ago), or 7.5% and 32.5% (as now), or if they increase further.

Or have we misunderstood your point?

[Fred Bloggs]

I agree with the tail end of your comment, but I don't agree with your earlier one (that divi taxes make it irrelevant).

Doesn't matter whether dividend allowance goes down and/or tax rates go up. As long as marginal rates of tax increase as income increases, there's going to be incentive to transfer income from higher earning individuals to lower ones. This applies whether the low rates are 0% and high rates 25% (as a couple of years ago), or 7.5% and 32.5% (as now), or if they increase further.

Or have we misunderstood your point?

Perhaps I'm not so eloquent. My point really is that direction of travel is clear, the tax incentive of pretending you are a business by incorporation and then sitting next to the guy doing the same thing as an employee is coming to an end. Fact. Whether by dividend taxation or other means, the situation is changing, fast.

[TheCyclingProgrammer]

My point really is that direction of travel is clear, the tax incentive of pretending you are a business by incorporation and then sitting next to the guy doing the same thing as an employee is coming to an end.

You might be right about that, fortunately we aren't all bums on seats...