DOOM: Taxes

[AtW]

And again, you are a one man band, not a proper company. You seem to think that corporation tax is personal. It's not.

They could have easily create dividend tax credit which would be exactly the shame of corp tax paid by the company, so that big companies that say pay 0% would not have any credit against dividends they pay, I'd be ok with that model, but this ain't happening - if anything Govt killed that link with a passion under fooker Osborne, obviously this allows them to tax same money twice, so why not?

What you don't see (and I'd like to see) dividend taxes apply to ALL dividends regardless where recepient is resident - they should be using double taxation agreements to offset that UK tax paid. Not even Labour under Corbyn proposed that, I wonder why?

[hugebrain]

And again, you are a one man band, not a proper company. You seem to think that corporation tax is personal. It's not.

I get my dividends from proper companies that I invest in.

[AtW]

Tax property heavily, I sold all my BTL already.

[hugebrain]

Seriously though. If the sort of house a poor person would have lived in 100 years ago costs say, £700,000 pounds now. The mortgage cost doubles that to £1,400,000. Then assume you are paying 80% tax. You have to bill £7,000,000 to pay for it which is 35 years of contracting. So, currently a contractor is about as well off as say a railway manual worker was a hundred years ago. If they raise taxes 10% then suddenly it’s 70 years contracting which makes things a bit tricky!

[WTFH]

Then assume you are paying 80% tax.

If you are paying 80% tax, the issue isn't the price of your house, but your accountant.

[hugebrain]

If you are paying 80% tax, the issue isn't the price of your house, but your accountant.

I am not, I am a proper contractor.

But at the moment I’m looking for something new and keep hearing the dreaded “inside IR35” thing where I believe I would be paying 80% tax (I think it’s actually 79.something you pedants) on some of my earnings.

Since they plan to raise this even more, I am looking at flights out too.

Now that you mention it, my accountant is a bit rubbish.

[WTFH]

But at the moment I’m looking for something new and keep hearing the dreaded “inside IR35” thing where I believe I would be paying 80% tax (I think it’s actually 79.something you pedants) on some of my earnings.

Such a vague statement.
But the idea that in your earlier post and this one you have stated that tax is 79-80% on earnings inside IR35, that is incorrect.
Perhaps it is all the little caveats that you put around things that are your way of justifying your position, but pumping the numbers through a calculator, tax on an inside IR35 gig going via an umbrella is about 40-45%, or half of the figure you keep repeating.

[northernladuk]

OK - fair points.

What I am try to say is that £150k may be a high income but it does not make make one wealthy.

It's hard to argue it doesn't though. Unless you are blowing the entire lot on hookers and coke then it's going somewhere. Could be massive houses, expensive cars or what have you but that meets the definition of wealthy. They will have assests of some form. Granted not everyone will but they have to draw a line in the sand to link weath and income and 150k a year isn't a bad one. I think your issue is understanding the term wealthy.

Here is a page on it.
https://www.ons.gov.uk/peoplepopulat...018tomarch2020

It says the median net wealth of the Uk is £300,000. It's very hard to imagine someone on 150k only has 300k. They are going to be right up the list and therefore considered wealthy.

There is a graph about a third way down the page that shows the Wealth components median by household total wealth decile. Having over 1m of assests across pension, house and cash puts you in the 9th decile, with only 10th and top 1% above you. You'd imagine someone earning in the top 1% income bracket would easily be over that so you can conclude that someone on 150k is going to pretty darn wealthy.

So again I think it's you not understanding what wealth really is when you are making your sweeping comments.

Rishi+Hunt will undoubtedly hit earners a bit harder but I suspect they will take very little action on the wealthy.

And I'd have to conclude that's a pretty uninformed opinion based on the last two posts of yours not understanding what 150k earners and wealthy people are. I've already proved to you that they've been hit hard than other groups for the last however many years and contribute an inbalanced amount. So action on the wealthy has been happening for many years and they've been taxed on that wealth already when they earned it. Taking out tax loopholes and avoidance for the minute why is it fair to tax wealthy people's assets when they were taxed unproportionally already? There is a balance between taxing for the greater good of the country and driving people out of the UK due to taxation.

You sound like some poor person just having a moan about the rich because you don't understand it which is pretty odd for a contractor that's pusing the figures you are complaining about.

BTW I am not totally defending the rich and saying leave them alone. I'm just countering your arguement for discussion purposes to bring it back in to perspective.

[vetran]

Seriously though. If the sort of house a poor person would have lived in 100 years ago costs say, £700,000 pounds now. The mortgage cost doubles that to £1,400,000. Then assume you are paying 80% tax. You have to bill £7,000,000 to pay for it which is 35 years of contracting. So, currently a contractor is about as well off as say a railway manual worker was a hundred years ago. If they raise taxes 10% then suddenly it’s 70 years contracting which makes things a bit tricky!

Most people with £700,000 houses paid nowhere near that for them. They climbed the ladder in smaller jumps. House inflation did the rest.

£700,000 round Berkshire buys you a 3-4 bed detached, hardly a poor mans house.

[hugebrain]

Such a vague statement.
But the idea that in your earlier post and this one you have stated that tax is 79-80% on earnings inside IR35, that is incorrect.
Perhaps it is all the little caveats that you put around things that are your way of justifying your position, but pumping the numbers through a calculator, tax on an inside IR35 gig going via an umbrella is about 40-45%, or half of the figure you keep repeating.

I am talking about the payroll taxes taken from what I bill from 100k to 120k. I’m not very good at percentages but I think these come to 79.something % (VAT, Income tax with no allowances, NI, Employers NI, apprenticeships). Please provide more accurate figures if you have them. It’s something like 20%, 60%, 3.25%, 13.8% and 0.5%.

I think this is supposed to be a bit higher in April and higher still after the next budget.

I’m not talking about the average amount of tax. Just what I would be paying on everything I earn at the point I pass the 100k threshold.