Whats your views on Budget 2015?

[DaveB]

Reading the detail, I think its safe to assume it does come on top...watch this space though.

Thats the way I read it. Dividend income is treated seperately from your regular income. So you get your normal PA, then normal IT rates, plus £5k tax free dividends, then 7.5% etc on dividend income after that.

Could be wrong though, we need it properly clarified though.

[Jessica@WhiteFieldTax]

Also in your defence, it is also too early, since there are many specifics we don't know yet.

Like whether the £5K for dividends comes on top of the £11K basic rate threshold....

Yes, there are unknowns like this and I caveated that in the assessment. That said I think it will be on top, in the same way as the savings rate band is, and it fits in with the speech about 85% of shareholders not affected, but we don't know yet.

[WordIsBond]

Believe me its not great for accountants. I was a million times happier at 12.29pm yesterday! (other than the irritation of the early wicket falls in the cricket)!

I believe you! But it's great for your job security.

[Jessica@WhiteFieldTax]

I've updated my analysis work (and uploaded to my web site) to look at (a) phasing of CT change and (b) the effects on two shareholders.

There are a myriad of permutations, but as an example:

£70k with salary at PA level, one shareholder, there is initially a rise of £2,392 in tax, falling to £1,590 once the associated CT cut is implemented.

£70k before salary, 50:50 shareholding split, assume one salary only (spouse uses PA elsewhere) - initially a rise of £2,814 falling to £1,715 once the CT increase is implemented.

Heavily caveatted (a) on the basis of reasonable assumption inferred from speech and documents as to how this will work, (b) assume the promised CT cuts happen and (c) ignore tweaking salary or shareholding percentages which may mitigate a little. INOW this is still raw.

[Dan@OrangeGenie]

I believe you! But it's great for your job security.

Brilliant, another threat/deterrent to my potential client base. We won't be charging our clients for the extra work either, same flat monthly fee as always.

How can we put our fees up/make more money when you guys will be earning less because of the treasury...we're in this together!

[Snarf]

You can't pay £1 per hour - remember the national minimum living wage will be £9...heheheeee

National minimum wage does not apply to family members of the employer living in the employer’s home.

[Maslins]

Coupled with the additional complexity, any SME accountants that operate in a similar way to contractors will be double fecked.

To a small extent, yes...but the posters saying how they've been screwed and they'll stop contracting at the next opportunity, it does seem a bit toys out of pram.

Tax rules change, sometimes you're better off, sometimes you're not. Sometimes you can tweak how you do things to "get round it" (for want of a better phrase), other times you just have to suck it up. Chucking it all in is a bit drastic, especially given as some have pointed out there'll likely be two more "budgets" before these rules actually come into place, so plenty of time for the chancellor to backtrack.

Being honest from a tax perspective contractors have had it extremely good for quite a while now. The threat of IR35 seems to be a "bark worse than bite" scenario (though I appreciate horrible for anyone actually going through an enquiry). Contractors long in the tooth who do it not for the short term tax benefits but because it makes sense for them/their clients will no doubt continue as is, undeterred by the fact a handful of the late joiners to the contractor party might leave.

Also, whilst yes this will be bad for me personally, partly through possible loss of Maslins clients who return to permie, also due to my own profit extraction...every cloud, these changes in isolation seem to suggest more people might be looking at MVL Online as an option. No doubt that'll get stomped over in due course though!

[jamesbrown]

To a small extent, yes...but the posters saying how they've been screwed and they'll stop contracting at the next opportunity, it does seem a bit toys out of pram.

Tax rules change, sometimes you're better off, sometimes you're not. Sometimes you can tweak how you do things to "get round it" (for want of a better phrase), other times you just have to suck it up. Chucking it all in is a bit drastic, especially given as some have pointed out there'll likely be two more "budgets" before these rules actually come into place, so plenty of time for the chancellor to backtrack.

Being honest from a tax perspective contractors have had it extremely good for quite a while now. The threat of IR35 seems to be a "bark worse than bite" scenario (though I appreciate horrible for anyone actually going through an enquiry). Contractors long in the tooth who do it not for the short term tax benefits but because it makes sense for them/their clients will no doubt continue as is, undeterred by the fact a handful of the late joiners to the contractor party might leave.

Also, whilst yes this will be bad for me personally, partly through possible loss of Maslins clients who return to permie, also due to my own profit extraction...every cloud, these changes in isolation seem to suggest more people might be looking at MVL Online as an option. No doubt that'll get stomped over in due course though!

Completely agree. This doesn't change the big picture. Those reviews of expenses and IR35 OTOH... Even then, it would take a lot to return to the dark side.

[WordIsBond]

Brilliant, another threat/deterrent to my potential client base. We won't be charging our clients for the extra work either, same flat monthly fee as always.

How can we put our fees up/make more money when you guys will be earning less because of the treasury...we're in this together!

Yeah, I was talking about the complexity, not the tax increases.

The tax increases are bad for everyone, even those economic illiterates who don't know they are bad.

But honestly, if my accountant put up fees because of increasing complexity, I'd shrug and say, "Can't blame you." The service he provides me is worth more to me now than it was yesterday, it would be churlish of me to quibble over a couple hundred pounds a year extra, if that's what he does.

[Sausage Surprise]

May be time to start looking at the alternatives to ltd company with min wage and split divis.
LLP?