Official Summer 2015 Budget Thread

[administrator]

That's what I meant to type, but was multi-tab. Honest.

So we get the hit now and the better bit in five years time.

Ah, the old multi-tab issue. Yeah I get that all the time

We are taking the hit for a couple of years.

[OwlHoot]

What are the thresholds for these dividend tax rates? Is there a summary page somewhere?

If the increases are that drastic, bringing them more into line with income tax + NI, then surely IR35 must be pretty much a dead letter.

[Unix]

How is this going to be collected via self assessment?

[TheFaQQer]

Employment taxes
Employment taxes contribute over 40% of HMRC receipts. However, there are many different mechanisms that employers and individuals use to reduce taxes paid on earnings. This is not fair. Two individuals doing the same job, in the same way, can end up paying very different levels of tax. The government wants to take steps to address this.

The government recognises that many individuals choose to work through their own limited company. However, where people would have been employees if they were providing their services directly, anti-avoidance legislation commonly known as IR35 introduced in 2000 requires that they pay broadly the same tax and National Insurance as other employees. As highlighted by reports from the Office of Tax Simplification and the House of Lords, it is clear that IR35 is not effective enough. Non-compliance in this area is estimated to cost over £400 million a year.

The government has asked HMRC to start a dialogue with business on how to improve the effectiveness of existing IR35 legislation. The government wants to find a solution that protects the Exchequer and improves fairness in the system.

[TheFaQQer]

What are the thresholds for these dividend tax rates? Is there a summary page somewhere?

If the increases are that drastic, bringing them more into line with income tax + NI, then surely IR35 must be pretty much a dead letter.

The government will set the dividend tax rates at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers. While these rates remain below the main rates of income tax, those who receive significant dividend income – for example due to very large shareholdings (typically more than £140,000) or as a result of receiving significant dividends through a closed company – will pay more.

[tractor]

....

That's what I meant to type, but was multi-tab. Honest.

So we get the hit now and the better bit in five years time.

By which time there is a 50/50 that they will be out on their ears, whatever has taken the place of Labour/LibDums will take over and they will renege on it and you will get zilch-again

[escapeUK]

The dividend move seems like a more effective way of fixing the "IR35 Problem". Basically you will pay 18% corp. tax. Get a 5k allowance and then tax starting at 7.5% on all other dividends.

You are right. It makes it a lot easier to get extra tax from us, rather than going through all those investigations most of which they lose. All while not effecting 85% of the population.

[Underbase]

What are the thresholds for these dividend tax rates? Is there a summary page somewhere?

If the increases are that drastic, bringing them more into line with income tax + NI, then surely IR35 must be pretty much a dead letter.

It seems that (this is a guess) it will be the normal tax bands. So there is a little bit to be had by the increase in the band for Higher Rate tax.

[administrator]

By which time there is a 50/50 that they will be out on their ears, whatever has taken the place of Labour/LibDums will take over and they will renege on it and you will get zilch-again

With the current Labour leadership candidates I wouldn't bet on it.

[SimonMac]

Employment intermediaries and tax relief for travel and subsistence – As announced at March Budget 2015, the government has published a consultation document alongside the Summer Budget on detailed proposals to restrict tax relief for travel and subsistence for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. The changes will take effect from 6 April 2016. (Finance Bill 2016)

In English?