BN66/S58 update

[sasguru]

You have to laugh at a "Christian" arguing why effectively not contributing to society isn't a moral issue.

He's never been the sharpest tool in the box.

[AtW]

So you have no morality then, you just follow what the nice MP on TV says?

I follow the rules - not just by letter but also the spirit.

Building or using artificial structures that otherwise have no economic sense and whose sole purpose is to avoid tax should, in my view, be classed as tax evasion.

From what I understand countries like Germany have much lower tolerance threshold for such tulip arrangements - UK is very lax when it comes to it.

[proggy]

I follow the rules - not just by letter but also the spirit.

Building or using artificial structures that otherwise have no economic sense and whose sole purpose is to avoid tax should, in my view, be classed as tax evasion.

From what I understand countries like Germany have much lower tolerance threshold for such tulip arrangements - UK is very lax when it comes to it.

Good for you, everyone is different, so the law should state clearly what is legal or not. It doesn't and there for its the governments fault for creating a complex tax system with loopholes all over the shop.

[Old Hack]

I know not one contractor who sits out there and thinks, OK, I earn £120k, I should be paying £41k tax, and 6k NI and then pays it. Not one.

I know many who incorporate and make their partners equal shareholders, pay each other £9200 and divvy the rest up, after applying appropriate 'expenses'.

This is legal. Is it tax evasion?

[AtW]

This is legal. Is it tax evasion?

Yes, next!

[AtW]

Good for you, everyone is different, so the law should state clearly what is legal or not.

Sure it should, that I agree - it should be as clear as the difference between your own nice home and a cell in HMP Belmarsh.

[Old Hack]

Yes, next!

But it isn't, not at all. It's managing your tax affairs efficiently. There are laws which state, clearly, as a director, you can pay yourself less than the minimum wage. Laws. It also states, that any profits, can be distributed by dividends.

What's tax avoidance there? You've simply abided by two very clear laws. Laws that were tested in court too (HMRC vs Polar).

[AtW]

There are laws which state, clearly, as a director, you can pay yourself less than the minimum wage. What's tax avoidance there?

Yes you can, and it makes sense if company isn't earning enough.

However if you have enough to pay dividends then you should have had enough to pay the staff that generated this money first. Essentially in this case dividends replace PAYE.

But you pay corp tax + dividend tax then it works out pretty decent tax rate anyway.

I don't think it's a big issue for HMRC, the big issue is to stop people like BN66 who want to pay fook all tax.

[d000hg]

You have to laugh at a "Christian" arguing why effectively not contributing to society isn't a moral issue.

Jesus said people should pay taxes because they should follow the laws of the land and treat their rulers with respect. The church advocates giving to the poor, not giving to the government. You don't contribute to society by paying money you are legally obliged to.

[eek]

Yes you can, and it makes sense if company isn't earning enough.

However if you have enough to pay dividends then you should have had enough to pay the staff that generated this money first. Essentially in this case dividends replace PAYE.

But you pay corp tax + dividend tax then it works out pretty decent tax rate anyway.

I don't think it's a big issue for HMRC, the big issue is to stop people like BN66 who want to pay fook all tax.

not quite.

You pay PAYE for staff. you don't need to pay PAYE for directors and assuming they are shareholders it makes economic sense to pay them from profits as it costs the company far less to pay a director £40k via dividends than via PAYE.

And even on that small salary you can save a fair chunk of company money which could be used to pay someone else.