Indians working through Ltds

[SueEllen]

FTFY

And if you remember the 70's and the legislation forcing people INTO limited companies, you wouldn't make the assumption that the ONLY reason for a single person owning one is tax avoidance. For many, it was the only way they could continue in the contstruction industry or the up and coming 'puter wizardry. The main catalyst for all that iirc was fly by night employment agents setting up in Shannon Airport for a year then running off with bazillions of £'s in PAYE and NI deductions and contributions.

Facts aren't allowed.

[expat]

FTFY

And if you remember the 70's and the legislation forcing people INTO limited companies, you wouldn't make the assumption that the ONLY reason for a single person owning one is tax avoidance. For many, it was the only way they could continue in the contstruction industry or the up and coming 'puter wizardry. The main catalyst for all that iirc was fly by night employment agents setting up in Shannon Airport for a year then running off with bazillions of £'s in PAYE and NI deductions and contributions.

Absolutely. In the 70s I managed to get a couple of contracts with agencies who paid PAYE with generous expenses etc. But then one agency got a "telephone number" tax bill and shut down, and all the others started only taking on Ltd Cos.

KentPhilip is IMHO absolutely right to pin it on the different tax rates: we have an incentive to pretend that the income resulting from our labour is something other than employment income because that attracts a thumping penalty in the form of NICs that other forms of income don't suffer. I saw the opposite situation when I lived and worked in France for many years: it didn't matter on what basis you worked, you'd pay the same tax and social contributions anyway. Result: Monsieur Hector (Le Fisc) didn't care what status you claimed, because you'd pay the same tax anyway.

Chancellor Barber had planned to fix that in the Heath govt with a unified tax system, and got as far as unifying income tax (believe me it was horrendously complicated in the early 70s), but didn't manage to do it for NICs. And no wonder: the magnitude of that (largely stealth) tax is almost incredible.


I should add that I have believed for quite a while now that the establishment now sees us as a cost rather than a value-add: therefore replacing us with Indians on any terms is good for business and therefore good for the country.

[scooterscot]

1. Why didn't companies start taking on extra employees for short term projects and small bursts of work back in the 90's? Why were they willing to engage small Ltd's through agencies?

It did not seem to be a problem for them during the 70's.

2. What is the tax difference between a self employed worker and one man Ltd company? (no EBT schemes or other offshore avoidance) .

You don't know? Accountants must be saying to themselves 'one born every minute'

1) A company is liable for the tax rather than than individual.

2) The tax affairs of an individual are considerably more simple than that of a company. Simple profit / loss accounting opposed to the web of form filling.

3) You keep all the profits after tax. Now you make think well it's better a use a Ltd company to spread my profits over a period of years. I bet a good handful of folks on here don't make profits beyond £30k a year to make operating a Ltd worthwhile. Even then if they do you've got all the additional expenses and effort.

4) Lets have two examples with profits at £30k

You would have been £1700 better off using a Ltd co. wow. And several packets of aspirin with the headaches operating a Ltd. No to mention there are expenses you might claim as an individual you could as a Ltd.

3. Taking in consideration the answer to question 2, where is the evil tax avoidance between the two schemes? or do you believe that all self employed people are tax dodgers as well?.

Clearly there are tax advantages to those individuals generating profits beyond the break even point and declaring them as dividends. This is tax avoidance at it's simplest. Avoiding £1700 is nothing. But avoiding even ten times that amount is aspiring evil.

The tax system in the UK is hopelessly complicated and expensive to it's own determent that no doubt harms the economy at large and all because of greed.

[itjobs]

hmmm... inneresting.

I've actually noticed that a lot of the Indians working through Ltds don't work through their own Ltd but that of a "friend".

Not sure what the deal is there....

It's same as those dodgy schemes but get paid in India

[scooterscot]

"Aspiring Evil" really? Sort of like people who sell drugs to five year olds? or Serial killers?

I can see you are planning on coming back to London, maybe you should spend an extra bit and head home to Scotland. They will need people like you after the referendum. Stupid people who feel obliged to hand all of their money to the government. I've worked for central government, you need to get a contract do some time with them, see how moral you feel after that.

Greed is a sin, din't you know? Green leads to hate, hate leads to anger, anger leads to the dark side.

[scooterscot]

You really are a bit slow aren't you? Getting your moral code from star wars isn't really impressing me.

Would star trek be better for you?

The needs of the many out way the needs of the few or the one. PAYE like everyone else you greedy b@stard.

[doodab]

Would star trek be better for you?

The needs of the many out way the needs of the few or the one. PAYE like everyone else you greedy b@stard.

As a Freiberufler don't you opt out of socialversicherung?

[stek]

Als das kind, kind war....

[scooterscot]

“It has never been hard to tell the difference between a Scotsman with a grievance and a ray of sunshine.”

Well if someone does not speak up no one will.

[eek]

Last word merchant as well.

nope just a grade A clueless muppet....