Poll: General election voting intentions poll

[Mr Jack]

I work as a ltd company and can tell you that I pay corporation tax and income tax under self assessment, so you are potentially wrong on that as well and on top of that, HMRC also get VAT from my labour. Not very good way of tax avoidance is it?

Corporation tax is lower than income tax, though, and - as a company director - you can get a significant tax free right-off. Plus you can alter your tax affairs so that you avoid higher rate taxation to a lesser or greater degree and claim substantial tax free deductions often on things you'd just have paid for as an employee. If you're not paying less tax as a contractor through a ltd company than you would as a direct employee you're doing something wrong.

The striking thing about it all is how voluntary tax is as a contractor. By tweaking your returns one way or another you can make huge differences in how much tax you pay. Which results in the bizarre situation of preparing one return for the mortgage application and another for the taxman.

Some difference in taxation levels seems fair enough since, as a contractor, you forgo the right to benefits for six months after you stop working and some other differences but the system can function as a method of mere tax avoidance.

 

[Mr Jack]

The richest make the most of the setup of our society, they don't get the most from it.

Net recipients of benefits get most from the setup, there is a world of difference between earning money and being given money.

Firstly, earning money is only possible because of the hard work of other people and the infrastructure provided by society. See how much money Bill Gates can make in Somalia if you don't believe me.

Secondly, much of the money made by the very rich is literally made from other people's money by dint of nothing more than ownership or rank. There's no contribution being made to the actual production. The system works by taking some of the productivity of the less well paid and delivering that to the better paid and the owners.

This is all fair enough to an extent, of course, but for the rich to not recognise the extent that they're lucky and supported by others is wrong.

 

[Destination]

I work as a ltd company and can tell you that I pay corporation tax and income tax under self assessment, so you are potentially wrong on that as well and on top of that, HMRC also get VAT from my labour. Not very good way of tax avoidance is it?

I actually meant limited instead of umbrella, whoops typo.
A limited company can be established to mitigate and indeed limit tax exposure, you can pay your PAYE to a certain level, and then take the rest as dividends or as a corporation tax. Both of which are substantially lower than the highest rate of PAYE taxation. HMRC get VAT from your labour? You mean your customers pay VAT, you do not, that doesn't increase your tax exposure.

What do you do specifically? At what levels of income, and how much PAYE do you award yourself, and what levels do you set for your corporation tax? It is all perfectly legal in the current tax world. I don't disagree with this in principle. But when Elmarko claims that the richest are not paying their share, or is suggesting that somehow those on lower incomes have a higher tax burden, this must be what he means, as there are few on incredibly high salaries that are purely PAYE.

I am not saying it is wrong. I am saying his whinging about those earning the most isn't accurate.

 

[Destination]

Firstly, earning money is only possible because of the hard work of other people and the infrastructure provided by society. See how much money Bill Gates can make in Somalia if you don't believe me.

This is rot also. Go back 300 years, the rich still made an abundance, and there was no established society in the form we have now, no NHS, no public systems, no education for the masses.
Those who were rich, were rich. They didn't need the infrastructures you claim are necessary.

 

[platypus]

France's economy declined in growth long after ours did. In fact, it's only very recently that it has changed.

Their economy may have flatlined after ours, but their welfare and pension system has been in a significantly worse position than ours for significantly longer. The employment rate rose sharply during and immediately after the crisis and it hasn't recovered.

 

[Dolph]

Firstly, earning money is only possible because of the hard work of other people and the infrastructure provided by society. See how much money Bill Gates can make in Somalia if you don't believe me.

Secondly, much of the money made by the very rich is literally made from other people's money by dint of nothing more than ownership or rank. There's no contribution being made to the actual production. The system works by taking some of the productivity of the less well paid and delivering that to the better paid and the owners.

This is all fair enough to an extent, of course, but for the rich to not recognise the extent that they're lucky and supported by others is wrong.

And nothing you have said in any way justifies the imposition of disproportionate taxation.

Further, as has already been pointed out to you, much of this is rubbish, rich, successful people still existed long before the current mess of structures and societal management that currently exists.

 

[Bear]

The richest get by far the most benefit out of the setup of our society that people who are on benefits - the poorest and most disadvantaged in the current setup - get a few crumbs from the table is hardly of huge impact.

Which is of course nonsense. The poor get more than a few crumbs, they get free education, health care, policing, infrastructure, benefits etc. Considering the poor contribute nothing financially to anything listed as they are net recipients then they are literally getting a lot for nothing.

Before you wail into your cornflakes, I don't have a problem with it and am happy my taxes help those less fortunate but stop the BS that the poor don't get anything out of society, especially when from the thread about earning £16k, some people actively live frugal lives through choice. More power to them if it makes them happy but don't harp on about obligating other people to pay for the things you (not you personally) want to take for granted when living a frugal life out of choice.

 

[Bear]

I actually meant limited instead of umbrella, whoops typo.
A limited company can be established to mitigate and indeed limit tax exposure, you can pay your PAYE to a certain level, and then take the rest as dividends or as a corporation tax. Both of which are substantially lower than the highest rate of PAYE taxation. HMRC get VAT from your labour? You mean your customers pay VAT, you do not, that doesn't increase your tax exposure.

What do you do specifically? At what levels of income, and how much PAYE do you award yourself, and what levels do you set for your corporation tax? It is all perfectly legal in the current tax world. I don't disagree with this in principle. But when Elmarko claims that the richest are not paying their share, or is suggesting that somehow those on lower incomes have a higher tax burden, this must be what he means, as there are few on incredibly high salaries that are purely PAYE.

I am not saying it is wrong. I am saying his whinging about those earning the most isn't accurate.

I'm not telling you the specifics of my financials if you don't mind, it's my business and no one else's besides HMRC . What I will say is that I sit in the middle, I do avoid tax but not to the point I could do.

I never said VAT increases my tax exposure, I specifically said HMRC get VAT from my labour, meaning they get tax from my activity, something they wouldn't be getting if I was working as a permenant employee nor as a non VAT registered company.

 

[Mr Jack]

This is rot also. Go back 300 years, the rich still made an abundance, and there was no established society in the form we have now, no NHS, no public systems, no education for the masses.
Those who were rich, were rich. They didn't need the infrastructures you claim are necessary.

You think there was no infrastructure 300 years ago? You think the rich made their money off their own skills 300 years ago?

For that matter, you realise that in many ways the rich of 300 years were poor by modern standards.

 

[Christmas themed thank]

Not by anywhere near as much as it should do. The economy was recovering nicely under Labour's stewardship and that recovery was killed off by the coalition. Just look at the figures and compare this recession to previous ones.

Just, what.

 

[Destination]

I'm not telling you the specifics of my financials if you don't mind, it's my business and no one else's besides HMRC . What I will say is that I sit in the middle, I do avoid tax but not to the point I could do.

I never said VAT increases my tax exposure, I specifically said HMRC get VAT from my labour, meaning they get tax from my activity, something they wouldn't be getting if I was working as a permenant employee nor as a non VAT registered company.

Indeed, and I wasn't saying anything you do it wrong, or that I disagree with. I was specifically talking to Elmarko who was saying the rich don't pay their share, and instructing him, that he wants them to, he needs a reformist government who will change the entire structure of our tax system.

I do think VAT in itself might be some way forward. I know George is looking for a system where non-domed companies shipping money offshore might be taxed to recoup some of the losses, but there will be ways around this. I think an answer might come in the form, of do and non-dom vat rates, so the price of tax avoiders go up, people either still buy it, or shop at home. Either way govt should win.

 

[Mr Jack]

Just, what.

As usual, you're entitled to your own opinion, you are not entitled to your facts. You can have a look here at how the recovery was proceeding, broadly in line with historical recoveries, until the coalition took over. That link is somewhat old now so it doesn't show the recovery that the economy has eventually managed but it does show how the UK was recovering until the coalition took over.

 

[Tefal]

t I sit in the middle, I do avoid tax but not to the point I could do.

why?

if you have no problem with tax avoidance why not go the whole hog, if you do have a moral problem with it why do it at all?


its akin to saying "i only nicked half the packet of biscuits not the full one so its ok" if you have a moral issue with avoidance.

 

[Dolph]

As usual, you're entitled to your own opinion, you are not entitled to your facts. You can have a look here at how the recovery was proceeding, broadly in line with historical recoveries, until the coalition took over. That link is somewhat old now so it doesn't show the recovery that the economy has eventually managed but it does show how the UK was recovering until the coalition took over.

Are you still claiming that throwing more and more borrowed money into the economy constitutes a recovery?

 

[NerveAgent]

So is any one who is a small business owner, contractor, freelancer etc automatically considered "the rich"?

Excellent, I've gone up in the world.

 

[Mr Jack]

Are you still claiming that throwing more and more borrowed money into the economy constitutes a recovery?

Are you still pretending that GDP growth isn't a recovery?

 

[Mr Jack]

And, on a lighter note: Labour in crisis as Ed Miliband loses mock debate to ‘empty chair’.

 

[Dolph]

Are you still pretending that GDP growth isn't a recovery?

Yes. GDP growth is not the sole component required for a recovery

http://en.m.wikipedia.org/wiki/Economic_recovery

 

[Bear]

why?

if you have no problem with tax avoidance why not go the whole hog, if you do have a moral problem with it why do it at all?


its akin to saying "i only nicked half the packet of biscuits not the full one so its ok" if you have a moral issue with avoidance.

Because some of that is paying money into my personal pension, giving charitable donations etc. Of course I could lower my corporation tax levels by ploughing more into my pension etc. if you equate that to nicking half a packet of biscuits then there is little point in debating this any further with you.

 

[NerveAgent]

Because some of that is paying money into my personal pension, giving charitable donations etc. Of course I could lower my corporation tax levels by ploughing more into my pension etc. if you equate that to nicking half a packet of biscuits then there is little point in debating this any further with you.

A lot of PAYE employees are aggressively avoiding tax by paying in to a pension. We don't talk about that though.