Petition to get the gov to reconsider the dividend tax changes

[DimPrawn]

Cant believe the number of contractors I have spoken to that think the increase in dividend tax is negligible , on 100K dividend its another 6K , approx 30% increase in taxes paid and that's without all of the other things we will be dealing with like increased NI , tax on expenses , etc. etc. thinking of working abroad for a few months and then coming back here to live off the profits and then repeat.

It's even worse on a £500K dividend.

No one in the real world gives a tulip. Those buying their 70" flat screen telly from Bright House, whilst doing the weekly shop on a credit card and funding the shortfall with Wonga aren't really going to cry buckets about it and us.

Petition is pathetic. You may as well start one about what a rip-off main dealer Porsche servicing costs are.

Better if each director wrote a letter to their MP and then voted the little **** out at the next election.

[d000hg]

So are you an FLC fan, doog?

In principle I like the idea of something along those lines, though I don't know the ins and outs of what is being proposed specifically and I would want the choice rather than be forced into it... also the ability to change from a FLC to a Ltd if I end up growing to something more substantial.

[d000hg]

Cant believe the number of contractors I have spoken to that think the increase in dividend tax is negligible , on 100K dividend its another 6K

If you're taking dividends of £100k a year, do you really think anyone is going to care that you're having to pay a bit more tax?

Pick your battles, IR35 and expenses will have a far greater impact, are far less reasonable, and far easier to explain/argue than "I have to pay an additional £6k tax on my £100k+ earnings".

Also, most contractors are not taking £100k out, even those who earn a lot, so your example isn't representative.

[mudskipper]

So are you an FLC fan, doog?

[d000hg]

YOU might do that. Go use an umbrella company or go permie. Tard.

No, most people do that. People talk about "going contracting" and then deciding whether to go Ltd or brolly. Nobody talks about "starting a contracting business". The tiny minority of us who operate more like a traditional business are not representative of contractors and to suggest otherwise is either ignorance or narcissism.

We use them because the law was changed back in the 1970's in a way that meant the only way we could work was via a limited company.

If you don't understand the history of this its best not to comment.

The tax advantages or disadvantages are a sideline. We work this way because we aren't employees and don't really want to be employees.

I'm aware of that and basically said as much:

the fact is, a Ltd is just a convenience/necessity for contractors
...
A Ltd is NOT the most sensible structure for a contractor, we use them because it's the most efficient way of working

I never said anything here about tax advantages and have often described them in the past as a perk.

[motoukenin]

Cant believe the number of contractors I have spoken to that think the increase in dividend tax is negligible , on 100K dividend its another 6K , approx 30% increase in taxes paid and that's without all of the other things we will be dealing with like increased NI , tax on expenses , etc. etc. thinking of working abroad for a few months and then coming back here to live off the profits and then repeat.

[pr1]

No it wasn't, that's your interpretation. It's a minor issue compared to the other two factors - the expenses issue limits many people geographically (in terms of what is financially viable) and the agency/IR35 issue hits everyone massively. Given most contractors are advised to pay minimal wages and take the rest as dividends, paying more dividend tax is far less restricting of his contracting lifestyle.

yes, i feel you're missing my point

i agree it is a lot less significant than the other two factors

my point is, if the other two factors were not factors - would people be on here complaining about the dividend tax increase (i.e. would this petition have got 100k signatures in a couple of days)

it was a ponderous question, i dont really care about the answer

[eek]

You can write "President and CEO" on your YourCo business card, it doesn't change the facts.

A Ltd is NOT the most sensible structure for a contractor, we use them because it's the most efficient way of working not because we want to start up a business. Contractors decide "I want to go contracting" not "I want to run a business".

We use them because the law was changed back in the 1970's in a way that meant the only way we could work was via a limited company.

If you don't understand the history of this its best not to comment.

The tax advantages or disadvantages are a sideline. We work this way because we aren't employees and don't really want to be employees.

[pr1]

Why no employer's NI? That makes no sense.

If you're genuinely in business you should be free to act like a business which just happens to have one employee. Which means the employee pays the full amount of tax on what they actually earn, and the business is free to keep profits in the company to smooth out any future peaks and troughs. The worse thing about IR35 is that it taxes you on the company's income for that year whether you've personally earned it or not. They should sort that out, get rid of the reporting requirements of one man companies (and so saving us all money spent on accountants), and apply the expenses rules in a way that treats permies and contractors equally, and I'd think that would be fair to all.

"The worse thing about IR35 is that it taxes you on the company's income for that year whether you've personally earned it or not"

no, it doesn't, you can have inside IR35 and outside IR35 contracts running coincidentally

[DimPrawn]

You can write "President and CEO" on your YourCo business card, it doesn't change the facts.

A Ltd is NOT the most sensible structure for a contractor, we use them because it's the most efficient way of working not because we want to start up a business. Contractors decide "I want to go contracting" not "I want to run a business".

YOU might do that. Go use an umbrella company or go permie. Tard.