Is this the end of Tax Free Divis?

[Moscow Mule]

I'd be amazed if most self employed tradesmen pay tax on more than 50% of what they actually earn. Try finding anyone to work on your house who will actually take a cheque for payment.

Try fiddling your tax if we all have to become self employed - it's quite difficult to hide BACS payments from clients...

[centurian]

Unless of course they set it so you pay CT on company profits AND are taxed fully on dividend income, but that sounds a bit weird... surely the worst that can happen is you're forced to take full salary as if caught by IR35?

Hence their promise to "simplify" IR35

[thunderlizard]

I still think this is fundamentally odd:
Company has £x carried over from a previous year.
If it pays it to the workers they have to pay full tax on it.
If it pays it to the shareholders, they don't.

[Moscow Mule]

I still think this is fundamentally odd:
Company has £x carried over from a previous year.
If it pays it to the workers they have to pay full tax on it.
If it pays it to the shareholders, they don't.

Total tax take is roughly the same though...

[xoggoth]

Still no up to date link on this?

[centurian]

I still think this is fundamentally odd:
Company has £x carried over from a previous year.
If it pays it to the workers they have to pay full tax on it.
If it pays it to the shareholders, they don't.

But it doesn't really pay that money to workers. Whether it's taken from reserves or current year's takings, ultimately it reduces profits in the current year, which means less corp tax to pay.

So either way, roughly the same amount of tax gets paid (forgetting about NI).


But there is still no recent link on this...

[NorthWestPerm2Contr]

here is one

Should contractors be cheering IR35

[cojak]

Reading around it seems the LibCons are going to stop us receiving tax free divis (on our side not the company side) for up to the tax limit. If so is it even worth contracting anymore?

If you're only in it for the money, no, it isn't.

[NorthWestPerm2Contr]

If you're only in it for the money, no, it isn't.

well i am only new to contracting but i have met at least 20 contractors in my career so far and not one of them was in it for anything other than the money....

[northernladuk]

well i am only new to contracting but i have met at least 20 contractors in my career so far and not one of them was in it for anything other than the money....

I would suggest that you are asking the wrong questions then. I would hazard a guess as you are concerned with the money then that is how the conversation goes. I am sure if you then mentioned other benefits to contracting they would be up for those as well. I also know a lot of contractors who are in it for the money and I could (incorrectly) state they were in it just for that but that isn't the full picture. Ask them how many people would do a permie job for a similar rate and it will be a whole different set of answers IMO