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BBC article on micro-Ltds

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    BBC article on micro-Ltds

    Coronavirus: 'We could end up with no business or savings' - BBC News

    Fairly unbiased and reasonable portrayal of my thoughts on this. The first case of a tradesman just starting to grow their business especially.

    It'll be interesting to see if Rishi does do anything as part of his "whatever it takes" mantra for this sector. If so, can anyone posit ANY theoretical scheme - regardless if you support it - that would help those who need it without being hideously abused by the likes of us?
    Originally posted by MaryPoppins
    I'd still not breastfeed a nazi
    Originally posted by vetran
    Urine is quite nourishing

    #2
    Abuse will happen. So trying to design a system that won't be abused is a waste of time. Being able to identify and deal with abuse swiftly is a better route.

    Looking at turnover may work for micro businesses.

    Comment


      #3
      Originally posted by d000hg View Post
      If so, can anyone posit ANY theoretical scheme - regardless if you support it - that would help those who need it without being hideously abused by the likes of us?
      People who have paid themselves dividends have benefited from hugely preferential tax treatment on a significant part of their income. Perhaps the treasury could allow such people to benefit from the scheme if they agree to (in future) back-pay tax at the equivalent level of an employee for all dividends paid in the last 3 years.

      So, if you received, say, £30K dividends each year, for which you paid 7.5% tax, you can claim up to £2,500 per month now, based on your average income including dividends (capped, as per the employed/self-employed), but agree to owe the equivalent tax as if those dividends had been taken as salary.

      So, you'd owe the tax man 12.5% on those dividends (assuming a simple case). It would not have to be paid now, but due over the next 3 years from 2021. It could be called the Dividend Charge.
      Last edited by Paralytic; 17 April 2020, 14:26.

      Comment


        #4
        While they are looking at individual scenarios to apply a cash fix there will always be individual scenarios that are overlooked.

        One journo asked Rishi at a recent daily briefing why a universal basic income wasn't provided to everyone of working age instead to keep it relatively simple and he said it wasn't the appropriate solution.

        I suspect like the self-employed assistance that doesn't start until June (though will be backpaid ) they are hoping things ease by then so many don't take them up on the it. Other support is reliant on banks and only a small percentage of requests are being paid out.

        It's a total shambles.
        Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

        Comment


          #5
          Originally posted by Paralytic View Post
          People who have paid themselves dividends have benefited from hugely preferential tax treatment on a significant part of their income.
          It's not that hugely preferential. That's the whole point of introducing dividend taxes, to fix what WAS effectively a huge tax relief.
          Remember, self-employed are able to claim 80% of their profit while still working as well. I don't think you save 80% of your tax switching from SE=>Ltd.

          Either way Rishi's measures are not about who "deserves" what. They are about what is needed to protect jobs and businesses so the recovery can be fast. "Whatever it takes" - surely tiny businesses like those in this article (apart from the recruiter obviously!) are just as worth protecting as a self-employed person. They are being protected for our benefit, not theirs.
          Originally posted by MaryPoppins
          I'd still not breastfeed a nazi
          Originally posted by vetran
          Urine is quite nourishing

          Comment


            #6
            The most democratic way was to send to everyone a fix sum irrespective of their earnings as America did.
            Sending someone 80% of their normal income then zero to others just because they have a convoluted way of receiving pay. Is non democratic. Some bathe in luxury some can't afford bread.
            Who is saying that they chose to be LTD's because of their big bollocks(or feminine equivalent) not because of companies needing this solution and accepting to deal with it in the first place is lying himself. You might have some control over your fate or you might not.

            They are just trying to keep appearances of "the system" working and keeping order especially for the people over their ears in debt, the generation paying 60-70% of their income on rent. It is designed to keep the housing market afloat which is an essential pillar to the establishment.

            I do hope they manage because I can't imagine how a world different than this would look like.

            PS: A good friend is very anxious that his long term tenure for a blue chip company might jump from furlough to severance package. If all the permies wake up to the reality that their rights and promises of "stability" and "care for their employees" don't mean much... you'd have a very tough time whipping them into place in the future. Should be fun times...

            Comment


              #7
              The biggest problem I see is that the one tax counts more than the other, despite having the same amount of money.

              That suggests that the tax system is completely broken and big reform is needed.

              There is small difference between LTD contractors vs employee pay due to dividend tax changes. Statistically speaking, contractors are the healthiest workforce and don't enjoy benefits like holiday pay and so on. Therefore I believe the small difference in tax is justified.
              I would argue that the difference should be bigger given the risks contractors are taking and they have company to run alongside doing "the same job".

              Unfortunately, the push for IR35 that mostly benefits banks and big corporations, comes with negative language that portrays small entrepreneurs as tax dodgers. The comments under the article show how misinformed and hostile general public is.
              The climate that has been created I think will cause long term damage to the economy.

              I think the main reason the reform is being plough through is because IR35 will give large companies truly flexible workforce as permanent staff could be laid off and given inside IR35 contracts to sign. Companies will no longer have to deal with unions or pesky employment law.

              I believe this was designed as a mechanism to help big companies to navigate through the EU exit so they can allocate and free resources as the situation develops.

              This at a cost of destroying small business and entrepreneurship.
              Last edited by elsergiovolador; 19 April 2020, 14:46. Reason: grammar

              Comment


                #8
                As someone on LinkedIn said the new criteria for IR35 determinations should be:

                I got help from a government scheme: Inside
                I didn't get help from a government scheme: Outside

                (before anyone lays into the legalities of it I fully appreciate they were being flippant but I understand the sentiment behind it).

                Comment


                  #9
                  Originally posted by SussexSeagull View Post
                  As someone on LinkedIn said the new criteria for IR35 determinations should be:

                  I got help from a government scheme: Inside
                  I didn't get help from a government scheme: Outside

                  (before anyone lays into the legalities of it I fully appreciate they were being flippant but I understand the sentiment behind it).
                  I mean i get the sentiment. However, any company using a PAYE scheme is entitled to use the CJRS so it seems a little harsh

                  Comment


                    #10
                    Originally posted by Paralytic View Post
                    People who have paid themselves dividends have benefited from hugely preferential tax treatment on a significant part of their income. Perhaps the treasury could allow such people to benefit from the scheme if they agree to (in future) back-pay tax at the equivalent level of an employee for all dividends paid in the last 3 years.

                    So, if you received, say, £30K dividends each year, for which you paid 7.5% tax, you can claim up to £2,500 per month now, based on your average income including dividends (capped, as per the employed/self-employed), but agree to owe the equivalent tax as if those dividends had been taken as salary.

                    So, you'd owe the tax man 12.5% on those dividends (assuming a simple case). It would not have to be paid now, but due over the next 3 years from 2021. It could be called the Dividend Charge.
                    Except you forgot to mention that dividends come from profits, which have corporation tax applied to them, currently at 19%, before then having dividend tax applied at 7.5% (lower rate)

                    Comment

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