I made a point of saying that I wasn’t accusing anyone of illegality. Basically you appear to have set up a shell company for the sole purpose of reducing your tax burden, similar to what many footballers have done with their image rights, and a loophole that HMRC has been looking to close for years. It’s not illegal and is a known vehicle for avoiding tax, but it proves the point I made at the end of my comment about the system being lopsided. Lower earners, and those in hourly paid and salaried jobs, whose earnings are taxed at source, aren’t given the same opportunity to offset their taxes. I think your comment “I am only £100 a month better off” would be very upsetting to those having to choose between eating and heating their homes.
I get what you are saying. I really do. The £100/mth comment in that context looks harsh, but not in the context of the rise in income now I am salaried. I agree it is lopsided, but the bottom line is that to equalise it you then penalise someone for the crime of earning more money. It takes away incentive. Just like the problem that we need state intervention, but there is a point where you are better off not working than working. The company wasn’t set up to avoid tax, but to make my income tax efficient. Maybe the same to some people. I agree a salaried worker can’t do this. I have also just done some calculations and a salary of £25k you pay 22% of your income in tax and NI. 23% for a salary of £35k. £90k and you pay 34% of a larger pot in tax and NI, £100k and you pay 35%. EDIT: I have just worked out that doing it the limited company way you pay about 12% effective tax. So I get your point 110%. But would I do it differently if the situation arose again? Not as long as it was legitimate and legal. I like ideals but am also a realist.
I think Badgers point is off kilter to a degree if I read it correctly, in so much as he seems to come at this from a low earning tax payer. All tax payers pay loads of tax, not just the low earners. So the more you earn the heftier the bill you face. And i totally get the point about the ‘only £100m a month’ piece and think you missed something in this. For people like Badger, who appear to not want people doing well earning lots of money, is this additional taxation helps towards the burden of lower income families, tax credits etc. For example, if we all only earned the salary of a regional manager in a supermarket, would there be sufficient tax collected to support those in need? Now I’m sure Os or someone who are far brighter with economics than me can educate me, but taxing at high levels does actually do some good, so does that mean the country needs some people to earn well? And for Badger to suggest you will upset people choosing heating or eating - who is he to make you feel bad - that isn’t your fault - perhaps he would like to pay more tax to help them, too. Not on making that statement, shouldnt be a guilt trip… I wonder if Badger ever had any perks out of his role - for example i know some regional managers at sainsbury’s (which is why i made the point above) and they get a few ‘free perks’ if you get what i am saying. Wonder if these are taxed Now i know Badger was also referring to tax avoidance, but so bloody what - how would people on lower incomes feel about losing £40-50k each year in tax? I imagine it would twist their nipples, too. If it is legal, set by Gov, who cares.
That is my view. I don't see it as a loophole, rather following the rules. If the rules changed then everyone would have to change the way they work - so be it. I won't be made to felt guilty for following the rules as you say we all pay enough tax. This is totally different than fraudulently avoiding tax. It is all in black and white (online actually at companies house) for everyone to see. I do actually apologise for the £100/month comment as insensitive perhaps, but the point I was trying to make was that a 35% 'turnover' (now paid as salary through PAYE) increase yielded a lot, lot, lot less % increase in take home pay. That £100 is actually completely eroded in rising costs. True, not the difference between eating or heating, but definitely a huge lifestyle change. I have said it so many times here, I cannot believe in 2022 there are homeless & starving people in this country - it just shouldn't happen. I am not the cause of it though. First world problems perhaps, but it doesn't make me a bad person.
As a side note to my post above - i also couldnt give a **** how people view what others pay in tax - i pay what i pay set by whichever Gov, not my fault if I earn more than someone else, or less than someone else. It isn’t for me to say if someone else is immoral, that is just twisted and bitter.
Good post, and you shouldnt feel the need to apologise. Badger should be apologising to you for trying to make out you are immoral and guilty. It is nuts that a 35% rise should only equate to £100 extra, and id imagine the disgust if a low earner took a bonus payment of say £20k and only received £10k of it Like you say first world problems, but still sticks in the craw somewhat.
Anyway I am going to leave it there - I don't want to fall out with people over it. We all have differing views politically and at my age I probably won't change them too much.
Interesting thread & definitely no issue with TIOON7. And just as a side note, although being very very fortunate to earn in the 40% bracket, I pay significant tax. Being PAYE I have no “opportunities” to reduce my tax but I have loads of mates earning ****e loads without paying tax. It’s rife. It’s governments job to tweak / adjust the system to make it fairer / more just, from corporate all the way down to those on benefits. Too many legal loopholes & ways to side step.
Sharon Stone in her hey day would have stopped me dead in my tracks. Angela Rayner now would make me work harder, anything to avoid noticing her.
I have seen an allegation that Patel’s Rwanda deal was thought up to galvanise the extremists and UKIP supporters into voting for the Tories in the upcoming elections. Also alleged that she didn’t expect the deal to go ahead, as a result of “lefty lawyers” overturning the deal, something else that would galvanise the extremists. Cynical.
Did lawyers even try to stop it? Or are they in that process now who else where those targets going to vote for anyway? I guess it is no lose because the people who find it abhorrent were not going to vote conservative anyway
I think the target audience is probably former Labour voters in the so called Red Wall seats; the calculation, which may be erroneous, appears to be that Brexit voters will lap up anti-immigrant rhetoric.
That’s odd because lots of pro Brexit people (I’d suggest most) get very very angry at the suggestion that their Brexit vote was either all or mostly down to being anti-immigration
