Official Summer 2015 Budget Thread

[DaveB]

Yeah, can someone explain this? I thought that the current rate of tax due on dividends in the higher (not highest) tax bracket was already 32.5%

Does this change mean I should empty the company's reserves now and take the tax hit?

It means you need to talk to your accountant.

If you are taking divi's up to the higher rate threshold after taking the 11k salary next year that will leave you with a £32,000 divi payment.

OF that the first $5000 is tax free, so you then pay 7.5% on the remaining £27,000.

Thats an extra £2025 per year in income tax.

If you've been taking divis over the higher rate threshold then you will pay more and it;s probably worth taking the hit this year rather than next. If you havn't it's probably not worth it as the net extra tax from going into the upper bracket this year will be more than the 7.5% you'll pay next year.

I think.

[darmstadt]

[SpontaneousOrder]

So Up-North vs London you have the salary as 40k vs 90k but the daily rate 350 vs 450. Don't think so mate, this is first hit on Jobserve for London

https://www.jobserve.com/gb/en/searc...2ADC6D9FDF5F5/

1) That's Scala, not Java.
2) Functional programming is is totally different, and a new fashion which means that the few that are competent can command a higher rate.

3)
Risk systems experience
Fixed Income knowledge desirable
Trading systems experience desirable

And getting that experience is very difficult. Hence why IBs pay so much.

That experience isn't so mandatory for permies, and those same IBs are currently paying 450/500 per day, typically, for roles which don't require that risk / equities /etc experience.

[centurian]

Isn't that basically just removing relief from "ir35 caught" contractors, whether that be ltd or umbrella?

Not quite - IR35 requires three things D&C, RoS, MOO

This proposal only requires D&C, so easier to nail the contractor than IR35.

This is intended for brollies, but I don't see anything that precludes LtdCo contractors.

[tractor]

....

Yeah, can someone explain this? I thought that the current rate of tax due on dividends in the higher (not highest) tax bracket was already 32.5%

Does this change mean I should empty the company's reserves now and take the tax hit?

Marginal tax rate. Explained here.

[expat]

Makes sense - scrap pensions tax relief as it currently stands - and basically just extend the ISA concept

Pay in with post-tax salary, get some tax free growth, but don't pay tax on the way out.

Much simpler than flat rate pensions tax relief.

Will take some sorting out with final salary schemes - the final salary will need to recalculated at a lower amount, but with no tax to pay on it

Did nobody see it coming? You get a tax break in return for saving in a vehicle where it is locked up, so that you will have a pension and not be a burden on the State. Pensions tax breaks are a deal with the government: you give up flexibility and they tax you less.

It's a carrot, to persuade people to contribute to a pension. Much easier just to make pension saving compulsory, then the carrot is irrelevant and can be dispensed with.

[SimonMac]

Not quite - IR35 requires three things D&C, RoS, MOO

This proposal only requires D&C, so easier to nail the contractor than IR35.

This is intended for brollies, but I don't see anything that precludes LtdCo contractors.

The wording is brollys and "personal service company" so does this mean we go back to not ticking that option on the CT600 or SA?

[SpontaneousOrder]

Not quite - IR35 requires three things D&C, RoS, MOO

This proposal only requires D&C, so easier to nail the contractor than IR35.

This is intended for brollies, but I don't see anything that precludes LtdCo contractors.

It would be nuts for it to affect ltds. Arguably even many brolly contractors.

Day rates would have to shoot up overnight, or the workforce will collapse as so many people travel so far to work on contracts.

[WordIsBond]

If she is paid a salary (not dividends) then presumably you would still be able to claim the allowance.

Seems it will make sense to pay a spouse's salary (and your own) up to the income tax threshold. The only cost is the Employee NI, and it saves on corporation tax.

[tractor]

...

It would be nuts for it to affect ltds. Arguably even many brolly contractors.

Day rates would have to shoot up overnight, or the workforce will collapse as so many people travel so far to work on contracts.

But where will they go?

Permanent. HMRC win/win.

This is where it has all been heading for 20+years. The push is and will be relentless on both the red tape and taxation fronts.