How workers across UK become 'companies' to cut tax rate to 20% - This Is Money

[PerfectStorm]

Although we all know what it means.

[Zero Liability]

Although we all know what it means.

We all know what HMRC would like it to mean.*

[tractor]

...

OT pensions. That industry has done a remarkably good job in explaining the tax saved. It is true. At the point of contribution.

For most people ultimately a pension will provide a modest tax saving (solely because of the 25% lump sum - which is always under threat). In reality, on the rest of it it usually provides for simple deferment. The output from the pension is taxable.

Certainly there are cases where the tax saving can be significant (and - depending upon circumstances the NI saving is definitely significant) but for the average joe chucking a few hundred in a month the tax savings will mainly turn out to be an overall illusion.

I'm not in anyway against pensions, but the taxation consequence are far from as simple as "hey I effctively get this lot tax free".

Yes, but it's the NI issue which is seen as the biggest dodge. In that respect, a pension is no different to any other 'dodge'. It's just more prudent for governments to encourage people to save because it means they are less of a drain following retirement if they don't.

[Batcher]

Probably not but it raises a lot of questions and draws bad publicity to those of use who are legitimate businesses.

Of most concern in the article is



Questions such as why is a publicly funded organisation allowed to behave in this way and why are similar questions not being asked about the way extremely large multinationals structure their affairs as to make a small profit or even a loss for many years in succession simply to avoid paying corporation tax are arguably more important.

Probably because Margaret Hodge and her cronies are friends with one and still rankled over the other because IR35 fizzled effectively (except of course as a deterrent, but it doesn't seem to deter the Beeb much)

It always amuses me when Margaret Hodge gets on her high horse about companies not paying their fair share of tax when her family's firm is known to avoid tax like the best of them.

Margaret Hodge's family company pays just 0.01pc tax on £2.1bn of business generated in the UK - Telegraph

Speaking to The Daily Telegraph, Mrs Hodge defended Stemcor’s behaviour and said that the company had “assured” her it paid “every penny of tax that is owed”, adding that she was only “a very small shareholder”.

“Clearly, I have asked them the question,” said Mrs Hodge. “They have always promised that they do absolutely nothing to avoid tax. I would be very mad if I found out differently.”

Mrs Hodge said unlike other companies under the spotlight, Stemcor did not try to shield profits or “hide information” and that was the difference between Stemcor and Starbucks.

However, when pressed about the details of why so little tax was paid by Stemcor despite the billions of pounds it makes, Ms Hodge said that she had not done “enough detailed work” and did not have the information.