Reply to: Will the dividend tax hike take the heat off IR35?

[tomtomagain]

Give it a go then and report back how it works out.

[garnet]

Hmmmmm. Now I am not a tax inspector but I suspect that scheme would be construed as tax evasion and carry a jail sentence.

The bold above is the only truth in your statement.

[jamesbrown]

If there is a divi tax hike, one can always open an LTD in Bulgaria. 1 euro capital needed.
It is not a tax heaven per se, but it has a 10% slab tax on personal income, 10% corp tax, 5% divi tax.
In theory one can have an effective tax of 12.5-13% on all profits of a company.
It is certainly a possibility if divi here gets taxed more.

Clearly, you're not familiar with the Controlled Foreign Company rules (and associated charge). Most jurisdictions have something analogous. Plus, any UK-resident director pays tax in the UK on their worldwide income. Imagine that.

[tomtomagain]

You don't need to do that at all.
Your UK LTD buys services from your Bul LTD. Bul LTD pays taxes in Bul.

Hmmmmm. Now I am not a tax inspector but I suspect that scheme would be construed as tax evasion and carry a jail sentence.

[LondonManc]

You don't need to do that at all.
Your UK LTD buys services from your Bul LTD. Bul LTD pays taxes in Bul.

Just need a letter from a QC and you're good to go eh?

[garnet]

Gonna struggle getting an agent to accept that one though.

You don't need to do that at all.
Your UK LTD buys services from your Bul LTD. Bul LTD pays taxes in Bul.

[northernladuk]

If there is a divi tax hike, one can always open an LTD in Bulgaria.
It is not a tax heaven per se, but it has a 10% slab tax on personal income, 10% corp tax, 5% divi tax.
In theory one can have an effective tax of 12.5-13% on all profits of a company.
It is certainly a possibility if divi here gets taxed more.

Gonna struggle getting an agent to accept that one though.

[garnet]

If there is a divi tax hike, one can always open an LTD in Bulgaria. 1 euro capital needed.
It is not a tax heaven per se, but it has a 10% slab tax on personal income, 10% corp tax, 5% divi tax.
In theory one can have an effective tax of 12.5-13% on all profits of a company.
It is certainly a possibility if divi here gets taxed more.

[AtW]

You do realise that rents are taxed just like any other income?

Yes, but people have to live somewhere and rents will continue to increase.

[LondonManc]

My point is that at £43k pa the difference between dividends and PAYE is not very large, and as you earn more than that the difference shrinks further. If you were to become required to draw a salary from your limited company instead of drawing dividends, it actually won't make that much of a difference.

That doesn't matter. Put aside the preference for project-based work that turned me towards contracting and financially I'm still much better off.

While I get the point that we don't get the benefits that a permie does (sick pay, holidays, redundancy, training, etc.) I'd counter that by saying that too many permies have gone contracting (arguably at the bequest of companies looking to avoid NICs) and many contractors shouldn't be contractors.

[m0n1k3r]

What's your point?

Mine is that I'd rather be taxed on £100-120k pa equivalent than £50-60k pa

My point is that at £43k pa the difference between dividends and PAYE is not very large, and as you earn more than that the difference shrinks further. If you were to become required to draw a salary from your limited company instead of drawing dividends, it actually won't make that much of a difference.

[sasguru]

just stick to vanilla property renting and count millions.

HTH

You do realise that rents are taxed just like any other income?

[LondonManc]

At the basic rate level, with corporation tax, employer's NI etc taken into account but pensions contributions excluded, the gain with taking small salary + dividends is 8.3% compared to PAYE.

What's your point?

Mine is that I'd rather be taxed on £100-120k pa equivalent than £50-60k pa

[unemployed]

They can't do it really - if you look carefully at budget stuff you'll see that GDP growth relies in more people coming into the country, young people who'll be paying into ponzi schemes of National Insurance, Residential Property etc...

DOOMED!

I think everyone has worked out that we have open door immigration for a deliberate reason , well anyone with half a brain anyway.

All well and good having growth but wages are a good few years behind to keep growth going , even so called well off individuals are finding it hard, a good wage does not equal a good life anymore.

I have respect for people trying to analyse all the financial BS that is given to us to mull over , but as you mentioned all we have now is property owners and non property owners, and when i say owners i mean people with proper equity or owned outright.

i am more worried about how far these kunts will go to keep the ponzi bollocks going. start nicking depositors cash ??? , It will fail spectacularly eventually though the pyramid scam only works with new entrants at the bottom .

could gold rise to the stars

[AtW]

what happens when they decide they only want faces that fit. grease the pole some more for the wannabees ?

They can't do it really - if you look carefully at budget stuff you'll see that GDP growth relies in more people coming into the country, young people who'll be paying into ponzi schemes of National Insurance, Residential Property etc...

DOOMED!