Tax - how much of your gross do you pay?

D.P. said:
That is the biggest issue. what he is doing is legal, and any sensible person would do the same. But showing off and being a giant douchebag about it is incredibly low!
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I'm sorry you feel that way. I'm not bragging I'm merely highlight what many already do. I wanted to have a discussion. Yes I am minimising my taxes, yes the big corps do it too. Yes we all have pensions that have holdings in those same big corps. Are we all as guilty as each other?

The system needs changing I think but is it wrong of me to do as I have done when the other guys do it too?
 
OP - I don't blame you for what you're doing, although I do hope in the future they stop people arranging their tax affairs in the same way you have done so that there is at least some parity between contractors, employees and corporations in the way they they pay tax and how much they pay in tax.
 
coolsurfer said:
Correct. The VAT threshold is £83,000 and I'm not getting there anytime soon.
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Thank you.

Anyway, you should have a look at some of the threads in the careers and professional development sub-forum. The use of such tax planning seems like it would fit in more there.
 
Jokester said:
Was thinking exactly the same thing.
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This is probably one of the most well used and well known arrangements to reduce a director's tax liability. HMRC would do nothing because they've never wanted to do anything about this. If they had they would have gone to ministers to change the rules a long time ago (and I do mean a long time).
 
The haters in this thread are hilarious. OP is doing exactly what 99% of self employed people do. Why do you expect him to earn thousands of pounds less just to be a 'good guy' when what he's doing is completely legal? You can't just call OP a douche bag just because he maximises his earning potential in a legal way....

For those in this thread that are saying tax fiddler... Just LOL. Don't know meaning of the words.
 
Pudney said:
This is probably one of the most well used and well known arrangements to reduce a director's tax liability. HMRC would do nothing because they've never wanted to do anything about this. If they had they would have gone to ministers to change the rules a long time ago (and I do mean a long time).
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Is that true? I've been advised from different sources that doing this will red flag you to HMRC for further attention.
 
Ace Modder said:
So why don't you lead by example and pay yourself a proper SALARY which is correctly taxable for what you take home annually.
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Why would he do this instead of being a typical employee of a normal company with job safety and benefits of employment.......
 
Jokester said:
Is that true? I've been advised from different sources that doing this will red flag you to HMRC for further attention.
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It may do with some Inspectors as different Inspectors can be a law unto themselves (to the vexation of their superiors). But as a matter of policy if this was an issue it would have been dealt with a long time ago. This type of structure has been going on longer than I've been in the tax/accounting field (although that's only a decade) and it's not even hard to notice it as directors need to file a tax return separating out their employment and dividend income.

It may get changed in the future due to public opinion, but to date this is not a controversial technique.

Although my disclaimer is I work in corporate not personal tax :p
 
Pudney said:
It may do with some Inspectors as different Inspectors can be a law unto themselves (to the vexation of their superiors). But as a matter of policy if this was an issue it would have been dealt with a long time ago. This type of structure has been going on longer than I've been in the tax/accounting field (although that's only a decade) and it's not even hard to notice it as directors need to file a tax return separating out their employment and dividend income.

It may get changed in the future due to public opinion, but to date this is not a controversial technique.

Although my disclaimer is I work in corporate not personal tax :p
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Maybe it's time for a pay cut, it is hard times in the O&G industry after all!
 
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