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Reply to: Government racket

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Previously on "Government racket"

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  • mailric
    replied
    i find it far better not to even think about it

    Leave a comment:


  • TheFaQQer
    replied
    Originally posted by VectraMan View Post
    Everybody is completely wrong.
    I think you'll find that my original answer of "No" makes me right

    Leave a comment:


  • DaveB
    replied
    Originally posted by VectraMan View Post
    Everybody is completely wrong.

    If you invoice £100, then weekly or monthly your turnover is going to be less than your tax code and you can pay it all as salary and pay no tax whatsoever.

    So you get to keep the full £100.
    Actually slightly more if you are on the VAT FRS

    Leave a comment:


  • VectraMan
    replied
    Everybody is completely wrong.

    If you invoice £100, then weekly or monthly your turnover is going to be less than your tax code and you can pay it all as salary and pay no tax whatsoever.

    So you get to keep the full £100.

    Leave a comment:


  • DimPrawn
    replied
    If you invoice £100 and then with the money you take home you foolishly fill up your car with petrol/diesel, the government are getting about £90 of it.

    Hope that makes it all worthwhile for you.

    Leave a comment:


  • TheFaQQer
    replied
    Originally posted by Mobile Chicane View Post
    Ok, thanks Faqqer, most instructive.
    Detailed answers cost money - a quick response is free.

    Same way that some companies will give you a "yes / no" answer to the question "is my contract outside IR35?"

    You need to be more precise on the question - the line "If I'm not right, where am I wrong?" wouldn't go amiss. I think you'll find I answered the question raised in the post, though, and even implicitly answered the second question too.

    Leave a comment:


  • hugebrain
    replied
    Originally posted by Mobile Chicane View Post
    Have I got this roughly right?

    If I invoice £100.
    minus 19% corporation tax = £19
    minus 40% higher tax tax = £32.40
    minus 17.5% VAT on all my other spending (aside from food and kids clothes etc.) = £8.50

    So out of £100 earnt and invoiced I get to actually spend £40.01

    oh and the government gets an extra 17.5% VAT on top of my invoice. So they get a whopping £77.40 for every £100 I invoice.

    If they were a high street bank with those sort of charges they'd be seen as criminals. How do they get away with it as our servants??

    Nick
    On the face of it, not quite so bad as. For £100 you bill 117.50, pay 17.5% VAT 22% Corporation tax, but only another 22.5% income tax (because you've already paid the 22% before you get the dividends). Leaves you with £60.45 or 51.45%. Then when you spend it you pay another 17.5% leaving you with £51.45, the communists get £66.05.

    You get to keep around 44% of your income.

    Of course it is far worse than this in practice because of inflation, car tax, petrol tax, council tax, hot dog tax, alcohol tax etc. Another problem with this calculation is it doesn't take into account the harm the government do to you while spending the money. e.g. you have to travel further to work because all the prime central areas are full of council houses, you pay more for your food because of the CAP, you are on a waiting list for your ferrari because council bosses have snapped them all up etc. etc.

    Leave a comment:


  • Peter Loew
    replied
    Originally posted by Mobile Chicane View Post
    minus 40% higher tax tax = £32.40
    Nick
    What, you with an umbrella or something?

    Leave a comment:


  • dude69
    replied
    Originally posted by Mobile Chicane View Post
    Have I got this roughly right?

    If I invoice £100.
    minus 19% corporation tax = £19
    minus 40% higher tax tax = £32.40
    minus 17.5% VAT on all my other spending (aside from food and kids clothes etc.) = £8.50

    So out of £100 earnt and invoiced I get to actually spend £40.01

    oh and the government gets an extra 17.5% VAT on top of my invoice. So they get a whopping £77.40 for every £100 I invoice.

    If they were a high street bank with those sort of charges they'd be seen as criminals. How do they get away with it as our servants??

    Nick

    Completely wrong. Your 40% tax bill is partially imputed by the CT paid, and the VAT paid on your invoice is reclaimed by your client, and in many cases you pay less VAT than actually charged due to Flat Rate scheme.

    Basically speaking: £100 earned = £60 received, divided by 1.175 = £51 worth of shiny Ipod for £100 earned (and in reality more like £53 because of the FRS). Of course VAT is not on everything so the average purchase tax is much lower than 17.5%

    Leave a comment:


  • Mobile Chicane
    replied
    hmm

    Ok, thanks Faqqer, most instructive. Good to see where I've got it wrong. Perhaps don't respond at all next time - might be a little more helpful.

    Leave a comment:


  • TheFaQQer
    replied
    Originally posted by Mobile Chicane View Post
    Have I got this roughly right?
    No

    Leave a comment:


  • Bluebird
    replied
    you forgot to mention Road Tax, duty over and above VAT - like Petrol, Beer / Wine & fags etc.

    Also all the food etc you buy, the price has already got the sellers tax bill factored into it - so really YOU actually owe the government money for working...

    Leave a comment:


  • Mobile Chicane
    started a topic Government racket

    Government racket

    Have I got this roughly right?

    If I invoice £100.
    minus 19% corporation tax = £19
    minus 40% higher tax tax = £32.40
    minus 17.5% VAT on all my other spending (aside from food and kids clothes etc.) = £8.50

    So out of £100 earnt and invoiced I get to actually spend £40.01

    oh and the government gets an extra 17.5% VAT on top of my invoice. So they get a whopping £77.40 for every £100 I invoice.

    If they were a high street bank with those sort of charges they'd be seen as criminals. How do they get away with it as our servants??

    Nick

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