Petition to get the gov to reconsider the dividend tax changes

[eek]

Most contractors who have done the maths know that they're onto a good thing as things are currently, the dividend tax actually does make things fairer and complaining "us high earners now have to pay as much tax as permies" is probably dangerous boat-rocking.

+1. I was and am perfectly happy to accept the dividend tax change.

Now the T&S and IR35 changes are a totally different matter. And the basis of those are now wrong to begin with as the dividend tax changes half the estimated benefits....

But if this was the only bit that was impacting us I would just accept it...

[cojak]

..as would most contractors I've spoken with.

So no, I'm not going to sign your petition.

[northernladuk]

Most contractors who have done the maths know that they're onto a good thing as things are currently, the dividend tax actually does make things fairer and complaining "us high earners now have to pay as much tax as permies" is probably dangerous boat-rocking.

Absolutely this. I can't remember too much that hasn't gone our way in recent budgets. Many other groups have been hit year on year. Something was going to happen eventually. Yes it narks me but isn't going to affect my lifeatyle. The other issues however.....

[AtW]

And people running a traditional small business, who do typically work extremely long hours for little income, are not really going to be affected to the same extent, if at all, because they are not maxing out their personal income to the higher rate using dividends.

Now that's pretty fooked up.

Working extremely long hours and having combined income from business less than high income threshold, what's the point then???

[AtW]

I thought the 5K dividend band is within the existing income bands, not in addition to it? That's what makes it rather nasty.

No, what makes it rather nasty is that dividends tax is now separate and can be easily increased at any time, it won't take long before it is aligned with income tax rates.

[d000hg]

Now that's pretty fooked up.

Working extremely long hours and having combined income from business less than high income threshold, what's the point then???

Many people starting up their business do this at the beginning - many take no salary at all and live off savings. You never watch Dragons' Den? The hope is it's a sacrifice for a short period that will pay off.

Didn't SKA work like that for you in the early days - coding 15 hours a day because it's your business and you can't spare the money to pay someone else?

At the other end of the spectrum, loads of small business simply don't every generate a lot of profit. Running a nice boutique teashop or similar quirky/independent business often just about makes a living for the owner but no more. A "lifestyle business" I thin it's called.

[mudskipper]

No, what makes it rather nasty is that dividends tax is now separate and can be easily increased at any time, it won't take long before it is aligned with income tax rates.

I would still prefer that to some crass attempt to crowbar us all into IR35. It still allows me to choose what levels of profit to take as dividend or leave in the company for a rainy day. It still allows for > 1 shareholder.

[d000hg]

No, what makes it rather nasty is that dividends tax is now separate and can be easily increased at any time, it won't take long before it is aligned with income tax rates.

I think that's a silly suggestion. The dividend tax closes a loophole where company owners can pay very low tax on a high income, and the tax levels chosen make it very similar to income tax levels, which suggests that is deliberate.

[DimPrawn]

Many people starting up their business do this at the beginning - many take no salary at all and live off savings. You never watch Dragons' Den? The hope is it's a sacrifice for a short period that will pay off.

Didn't SKA work like that for you in the early days - coding 15 hours a day because it's your business and you can't spare the money to pay someone else?

At the other end of the spectrum, loads of small business simply don't every generate a lot of profit. Running a nice boutique teashop or similar quirky/independent business often just about makes a living for the owner but no more. A "lifestyle business" I thin it's called.

I think a certain ex prime minister does this also. He lives on a super yacht with billionaire chums, but his company tax receipts say he makes a huge loss every year. Must be because he loves his job I guess.

[AtW]

Many people starting up their business do this at the beginning - many take no salary at all and live off savings. You never watch Dragons' Den? The hope is it's a sacrifice for a short period that will pay off.

Didn't SKA work like that for you in the early days - coding 15 hours a day because it's your business and you can't spare the money to pay someone else?

At start of the business there are no dividends, it took us many years to get to the point when we could pay them - taxation does not recognise backdated sacrifices as personal allowance gets lost if not used, even worse now there is no personal allowance to taxpayers like myself - no taper relief and ER can go at any time, now there is dividends tax which makes company owners to pay out money as dividends instead of keeping them in the company (just in case), so business environment got considerably worse and that's under "pro-business" Govt, at the same time old money are all right.