Originally posted by AtW
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The official "Autumn Statement 2015" AKA "End of Contracting" thread
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The Chunt of Chunts. -
Originally posted by AtW View PostWhat's the point in having a supposed "pro-business" Govt which in effect encourages to sell or even shut down business ASAP???Comment
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Originally posted by MrMarkyMark View PostThey could change it by April 2016 Finance Bill, if they complete the consultation by EOY.Comment
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Originally posted by chopper View PostThe thing about ER is that it has allowed people to build up a huge cash mountain in their small business, close the business and take that cash into their personal cash mountain very efficiently.Comment
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Originally posted by GJABS View PostI don't see it as especially efficient. You pay 10% tax on ER returns. But this is on top of the 20% corporation tax you've already paid on it. 30% is not especially low tax, although it is a bit lower than some.
Try doing the mathsThe Chunt of Chunts.Comment
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Originally posted by AtW View PostThe text clearly indicates that ER will be effectively nuked for PSC.
But lets wait and see before jumping to conclusions.Last edited by TheCyclingProgrammer; 25 November 2015, 16:39.Comment
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Originally posted by GJABS View Post30% is not especially low tax, although it is a bit lower than some.
Which is significantly better than if you'd paid CT plus the highest rate of CGT (42.4%) or CT plus higher rate dividends (40% now, more from next year).Comment
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Let's be honest, any ER changes are not aimed at the likes of you and I that might have a 2-300k sitting in company accounts. These rule changes will be for the people "abusing" the rules like what has been mentioned in the past and the press. Management buyouts and all that type of stuff.
Yes we may end up caught in the net, but I don't think anyone at the treasury or HMRC have sat there and thought yep, lets screw over those couple of hundred contractors a year that shut their firms down.....evil bastards
I've been a contractor for 20 years and I can honestly say I only know one person who's ever actually used ER relief in this way......and I'm talking about "psc" contractors, not other types of business interest.
The 3.8 billion a year that HMRC think they're loosing out on is most definitely not coming from IT contractors.Comment
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Originally posted by GJABS View PostI don't see it as especially efficient. You pay 10% tax on ER returns. But this is on top of the 20% corporation tax you've already paid on it. 30% is not especially low tax, although it is a bit lower than some.
Total: 100
Corp tax: 20%
Left: 80
ER: 10%
Left: 72
Total tax: 28%
Once Corp tax drops to 18% overall tax burden will be 26.2%
There are also various Corp tax reliefs that can reduce actual amount paid.
... and in Northern Ireland - only 21.25% overall with their shiny new corp tax of 12.5%!
It's much better than any other option with increase div tax and other things, so that's why it will be removed from all but big companies that FOR NOW won't be fooked over by pro-business Tory Scum.Comment
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Originally posted by TheCyclingProgrammer View PostNo it doesn't. It reads more like a tightening up/clarification of the existing rules (Transactions In Securities) plus a general anti-abuse provision aimed at those who shut down primarily to gain a tax advantageComment
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