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Ltd company directors - your day will come!
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"A friend of mine running his own business didn't pay any tax for years thanks to recording his all relatives as employee. He is a very clever guy and his accountant has a magic pen and knows the system very well. " Exactly what my ex is doing. Her 80yo mother earns more than her allegedly. Lol. Been a small Ltd company director/employer the past....... I know what it's like. ... never again, enough said.  | |||
"If there are loopholes people will use them. If those loopholes then turn against the people who have used them, is the govt responsible? Is there a way these loopholes can now be closed (for the benefit of all it would seem)? As for telling us who can contribute to the thread - not on your nelly . "In truth, it's not a 'loophole'. It's a legal way of running a business. Just like being self-employed or sole-trader is. The Govermnent only chose not to support it because it is nigh on impossible to monitor for fraudulent claims and the administrative difficulties of unpicking it. | |||
"A friend of mine running his own business didn't pay any tax for years thanks to recording his all relatives as employee. He is a very clever guy and his accountant has a magic pen and knows the system very well. " Not clever, just fraudulent! If investigated he has to prove what they do for the company. I run a fairly large operation and this is an obvious way to be fraudulent but why do it? If your earning then pay your way!! | |||
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HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it | |||
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"If there are loopholes people will use them. If those loopholes then turn against the people who have used them, is the govt responsible? Is there a way these loopholes can now be closed (for the benefit of all it would seem)? As for telling us who can contribute to the thread - not on your nelly . "Couldn’t agree more! Well said | |||
"Chancellor, you have created a "look after number one" mentality in me ..." That seems doubtful. It was probably there already. Even if he did; he's a Tory, looking after number one is their default setting and they think anyone who doesn't agree with them is wrong. If your plan is to fuck everyone else over, just as long as you're ok, they'll love you for doing it. "Shit Happens". "Life Isn't Fair". A lot more people are finding out it applies to them, too - not just the vulnerable and less fortunate. Maybe it wasn't their fault they were poor, after all? Maybe it was factors beyond their control? You got fucked over by a Tory government. You're not the first, you won't be the last. Suck it up and make a comeback. That's what they'd tell you. | |||
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"If there are loopholes people will use them. If those loopholes then turn against the people who have used them, is the govt responsible? Is there a way these loopholes can now be closed (for the benefit of all it would seem)? As for telling us who can contribute to the thread - not on your nelly .
In truth, it's not a 'loophole'. It's a legal way of running a business. Just like being self-employed or sole-trader is.
The Govermnent only chose not to support it because it is nigh on impossible to monitor for fraudulent claims and the administrative difficulties of unpicking it.
"Oh I know it's legal. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it "Surely if your profits are over £50K,can they not subsidise your living costs temporarily? | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it "given it sounds like your company will make a loss that you are more than entitled to carry forward there is no issue with this ... thats one of the benefits of running your company the way you do i have commented on a few of these threads and never once said these people are dodging tax, it is entirely above board but it has also for many years been in their favour and they have knowingly paid less tax on their take home pay than someone of a similar wage on paye and were happy when that system worked for them, no so happy now that it doesn’t and thats where the hypocrisy comes in my opinion in all fairness to your post though (and a few others on here) you do seem to get that this wasn’t set up purposefully to shaft you | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
Surely if your profits are over £50K,can they not subsidise your living costs temporarily?"Only if I shut my business down completely, which I won't do, because I'm not the kind of person who is happy to just sit at home, drawing 80% of my salary from the Government, and (in many cases) collecting a 20% top-up from my employer, for doing absolutely nothing. The reason I have my own business, is because I got off my backside in the first place, and started my own company, rather than just dreaming about it, but not having the balls to do it. Hence, during the lockdown, I have been proactive and diversified, to keep things ticking over. But I appreciate your concern, thank you | |||
"I work in the construction industry and I have a limited company. I have this due to larger contractors prefer to employ people this way to avoid paying me holiday pay, travelling expenses, pensions etc. Most agencies I work for too will only employ me if I'm a limited company. The government tried to shut down this way of employment this year by implementing IR35 but due to this virus they didnt go ahead, as a lot of doctors, consultants etc work through this scheme. I would prefer to work PAYE so that I was receiving holiday pay, pensions, saftey courses, tools etc and furlough pay. We dont get it that easy and yes I do pay my way " you have always had the ability to be PAYE rather than take dividends, you would just have had to to it yourself through your own company... contractors are almost always paid higher than their paye equivalent so the pensions , tools, sick pay etc is effectively included just not labelled as such on the invoice to save the hiring company the additional national insurance | |||
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"We get the government that we vote for "Pendantically no. We get the govt the majority (who voted) voted for.  | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
Surely if your profits are over £50K,can they not subsidise your living costs temporarily?
Only if I shut my business down completely, which I won't do, because I'm not the kind of person who is happy to just sit at home, drawing 80% of my salary from the Government, and (in many cases) collecting a 20% top-up from my employer, for doing absolutely nothing. The reason I have my own business, is because I got off my backside in the first place, and started my own company, rather than just dreaming about it, but not having the balls to do it. Hence, during the lockdown, I have been proactive and diversified, to keep things ticking over. But I appreciate your concern, thank you "Careful if that's a slight dig at those furloughed. As for diversifying, that's entrepreneurial and or adaptability which is surely better than relying on the govt for support? Isn't the support for companies via loans and only if banks cannot help? | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
Surely if your profits are over £50K,can they not subsidise your living costs temporarily?
Only if I shut my business down completely, which I won't do, because I'm not the kind of person who is happy to just sit at home, drawing 80% of my salary from the Government, and (in many cases) collecting a 20% top-up from my employer, for doing absolutely nothing. The reason I have my own business, is because I got off my backside in the first place, and started my own company, rather than just dreaming about it, but not having the balls to do it. Hence, during the lockdown, I have been proactive and diversified, to keep things ticking over. But I appreciate your concern, thank you
Careful if that's a slight dig at those furloughed.
As for diversifying, that's entrepreneurial and or adaptability which is surely better than relying on the govt for support? Isn't the support for companies via loans and only if banks cannot help? "The op left the building. | |||
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"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
Surely if your profits are over £50K,can they not subsidise your living costs temporarily?
Only if I shut my business down completely, which I won't do, because I'm not the kind of person who is happy to just sit at home, drawing 80% of my salary from the Government, and (in many cases) collecting a 20% top-up from my employer, for doing absolutely nothing. The reason I have my own business, is because I got off my backside in the first place, and started my own company, rather than just dreaming about it, but not having the balls to do it. Hence, during the lockdown, I have been proactive and diversified, to keep things ticking over. But I appreciate your concern, thank you
Careful if that's a slight dig at those furloughed.
As for diversifying, that's entrepreneurial and or adaptability which is surely better than relying on the govt for support? Isn't the support for companies via loans and only if banks cannot help?
The op left the building. "But the relevant poster hasn't  | |||
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"Who was the OP?" Alas it no longer matters but I’m sure he will be back.!!!! T | |||
"Who was the OP? Alas it no longer matters but I’m sure he will be back.!!!! T" No it doesn't matter too much I was just being nosy! | |||
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"Who was the OP?" Richard Branson | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it "1. You have not paid corporation tax. The buisness did. 2. Your customers pay the vat not yourself or the business 3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE? If you avoid tax you cant expect the tax man to bail you out. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
Surely if your profits are over £50K,can they not subsidise your living costs temporarily?
Only if I shut my business down completely, which I won't do, because I'm not the kind of person who is happy to just sit at home, drawing 80% of my salary from the Government, and (in many cases) collecting a 20% top-up from my employer, for doing absolutely nothing. The reason I have my own business, is because I got off my backside in the first place, and started my own company, rather than just dreaming about it, but not having the balls to do it. Hence, during the lockdown, I have been proactive and diversified, to keep things ticking over. But I appreciate your concern, thank you
Careful if that's a slight dig at those furloughed.
As for diversifying, that's entrepreneurial and or adaptability which is surely better than relying on the govt for support? Isn't the support for companies via loans and only if banks cannot help?
The op left the building. "Avoided paying something else again. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out. "This. Tax avoidance is great while it works for you. When it doesn't the entitled mindset kicks in very quickly in my experience. | |||
"Who was the OP?" They had 5050 in their name. | |||
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"Who was the OP? Alas it no longer matters but I’m sure he will be back.!!!! T" I wouldn't put money on it..... Let's just say 5050 won't be seen on these forums again. | |||
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"Who was the OP? Alas it no longer matters but I’m sure he will be back.!!!! T I wouldn't put money on it..... Let's just say 5050 won't be seen on these forums again. "Perhaps he / she didn’t like the answers that us caring lot gave them | |||
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"Who was the OP? Richard Branson "Was thinking Donald (Domestos) Trump  | |||
"We get the government that we vote for
Pendantically no. We get the govt the majority (who voted) voted for. "Even more pedantically, due to FPTP, we don't even get that. | |||
"Speaking from a chartered accountants standpoint - business, not practice. It’s all about what you give, ive seen & been apart of the filing of taxes. Exploring loopholes to favour TAX payments. You pay what you owe, nothing pisses me off more when people try squeeze every £ out of the government. I refuse to even touch friends tax returns. (SA102+ ... etc)" I was speaking to my accountant the other day. He's totally pissed off, changes coming every week with no fore warning. Working 12 hr days trying to assist clients with new rules and claims. Whilst knowing full well that all these furlough and grants are going to have to be paid for by his future taxes. Told him I'd clap for him on Thursday. Made him laugh anyway! Lol. | |||
"I work in the construction industry and I have a limited company. I have this due to larger contractors prefer to employ people this way to avoid paying me holiday pay, travelling expenses, pensions etc. Most agencies I work for too will only employ me if I'm a limited company. The government tried to shut down this way of employment this year by implementing IR35 but due to this virus they didnt go ahead, as a lot of doctors, consultants etc work through this scheme. I would prefer to work PAYE so that I was receiving holiday pay, pensions, saftey courses, tools etc and furlough pay. We dont get it that easy and yes I do pay my way you have always had the ability to be PAYE rather than take dividends, you would just have had to to it yourself through your own company... contractors are almost always paid higher than their paye equivalent so the pensions , tools, sick pay etc is effectively included just not labelled as such on the invoice to save the hiring company the additional national insurance" Believe it or not sometimes the rates of pay I get offered are less then PAYE rates that other contractors are on, as agencies just take the piss. I was offered £14 odd pound an hour all hours 7 days a week 10 hours a day to do some shutdown work in a factory. I also had to take travelling costs of that along with safety certs I had along with holiday pay. I said to the agent on the phone I would be better stacking shelfs at asda for PAYE then spend years in college and days and days in training centres. He basically got told where to go | |||
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"I'm completely out of the system now having had to retire early due to ill health. However my poor daughter has been devastated by the virus being a self employed hairdresser. She worked very hard to build her client base often working 7 long days a week. She's attempted to get some form of financial help from the government and despite trying various avenues has only been offered a very trivial amount so far. She's been very conscientious about the virus even turning down offers to visit clients at home so as not to break distancing and lockdown guidelines. She has now just taken a temporary job with a well known internet store just to keep her head above water. Hardly a replacement for her former income but having always filed her returns on time and not making a fortune I do feel she really has been let down badly? "That's really sad. I hope she finds alternative income until situation returns to normal. | |||
"Ltd Company Directors only! If you're not a director - find another thread you do NOT know what we are going through! If you are a director in a micro or small business, working from home with a low turnover (i.e. just making a living) I am fully ware of the situation you find yourself in. Receiving dividends is not wrong, many directors do this for LOTS of reasons NOT just as a tax dodge! You are probably of the opinion that the chancellor is a total arsehole. Those who brand you a tax cheat and say it's "payback" etc. are similar. They do this, as a rule because they don't have a clue what we are going through, or of the complexities of of our company and personal tax affairs. We are being totally overlooked by the UK government and treated far worse than blatant benefits cheats. I have never liked paying tax, no one does but until now i have never resented it. This difficult time we find ourselves in will affect many people in many ways. I for one will have not been "shown" why i should be paying more tax, i have seen why from now on i should be paying less. What you get out is not determined by what you put in, so what i put in will be far less in future. Chancellor, you have created a "look after number one" mentality in me and i'm sure countless others which will adversely affect you long after the bills for Covid-19 have been settled. " | |||
"The shame I think here, is that people have gotten greedy, many people have been advised on how to be tax efficient, as well as avoid higher payments on things like student loans and or maintenance costs based on own salaries Vs divendeds As many have said not illegal, but everyone knows what they are doing, and now it's caught up with them A friend of mine ran his own limited company and the difference in annual tax between PAYE and his effecient way advised by accountants was over 25k per year (and I'd imagine he wasn't the highest of earners) so having that in his pocket, I guess two options, spend like youbearnt it, or save a bit for when the times got hard.... It's no one's fault but your own I'm afraid I hear the supermarkets are looking for retail staff to help" I'll bet you that despite paying 25k less than he could have, he still paid in a lot more than the average employee. If he paid 5% or 10% less than he could have that is no excuse to give him nothing back. | |||
"I'm completely out of the system now having had to retire early due to ill health. However my poor daughter has been devastated by the virus being a self employed hairdresser. She worked very hard to build her client base often working 7 long days a week. She's attempted to get some form of financial help from the government and despite trying various avenues has only been offered a very trivial amount so far. She's been very conscientious about the virus even turning down offers to visit clients at home so as not to break distancing and lockdown guidelines. She has now just taken a temporary job with a well known internet store just to keep her head above water. Hardly a replacement for her former income but having always filed her returns on time and not making a fortune I do feel she really has been let down badly? "People worked in mines, closed down Studied for engineering and then Britain moved away from manufacturing to service industries pour savings into a shop, get flooded Went from candles to electric ... candle industry collapsed ! Lol There's lots of things that happen in life, seems to me some people have had it easy! Try living in a nuclear submarine, try being disabled, all that has happened, losing job, not getting out, life upside down .... happens in one car crash, one diagnosis........ Now does losing clients look bad? | |||
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"If you took dividends to pay less in taxes, as lots of company directors do, then you are taking a risk. You're not just being handed a lower bill for the craic, you pay less in and dont get the extra benefits if something like this happens. I run my own company and when it came to make that decision I actually weighed the cost vs benefit instead of just looking at what was the least I could pay. Anyone who didnt was reckless and it's on them because they made the decision they made with all of the facts in front of them if they wanted to look. For anyone who is caught out because they are being forced to work as a sole trader to do their job, this is why you need a better government to stop you from falling through the cracks." What risk? That there might be a pandemic? Or that support would be determined by PAYE rather than all forms of taxation. It might be fair if the pandemic was planned and the government decision of support made known in advance. Anyone who planned their tax structure around pandemics must havevhad a crystal ball. | |||
"If you took dividends to pay less in taxes, as lots of company directors do, then you are taking a risk. You're not just being handed a lower bill for the craic, you pay less in and dont get the extra benefits if something like this happens. I run my own company and when it came to make that decision I actually weighed the cost vs benefit instead of just looking at what was the least I could pay. Anyone who didnt was reckless and it's on them because they made the decision they made with all of the facts in front of them if they wanted to look. For anyone who is caught out because they are being forced to work as a sole trader to do their job, this is why you need a better government to stop you from falling through the cracks. What risk? That there might be a pandemic? Or that support would be determined by PAYE rather than all forms of taxation. It might be fair if the pandemic was planned and the government decision of support made known in advance. Anyone who planned their tax structure around pandemics must havevhad a crystal ball." PAYE tax payers get more support from the government when needed. Everyone who had the choice between dividends and being PAYE had this information available. It's why some business owners put themselves on the payroll. | |||
"If you took dividends to pay less in taxes, as lots of company directors do, then you are taking a risk. You're not just being handed a lower bill for the craic, you pay less in and dont get the extra benefits if something like this happens. I run my own company and when it came to make that decision I actually weighed the cost vs benefit instead of just looking at what was the least I could pay. Anyone who didnt was reckless and it's on them because they made the decision they made with all of the facts in front of them if they wanted to look. For anyone who is caught out because they are being forced to work as a sole trader to do their job, this is why you need a better government to stop you from falling through the cracks." I went for a job a couple of years ago, it was only in the interview that they told me they expected me to work under these circumstances. I called a halt immediately and walked out. When the headhunter who had organised it rang me to ask how it went, I told him "send me on another one of those and you can take me off your fucking books". He didn't do it again. I would never work under anything but PAYE. Yes it's costly for me, but the piece of mind is priceless. | |||
" Anyone who planned their tax structure around pandemics must havevhad a crystal ball. PAYE tax payers get more support from the government when needed. Everyone who had the choice between dividends and being PAYE had this information available. It's why some business owners put themselves on the payroll." Mate, all small limited company directors are on the payroll, just up to the limit when they start having to pay tax. As they are also usually the sole shareholder, they then take other profits as lower taxed dividends or leave in the company. That's how it works. This way they can save upto 20% tax on a percentage of their tax liability. But I will add being a small company boss. , or small employer, you definitely earn any savings on any tax efficiencies , compared to being an employee. | |||
 | |||
"I haven't recieved a penny since long before lockdown, because I left my job and my plan was to go self employed.. And after reading through this thread I'm now more confused about tax than ever. "Basically self employed people can pay themselves a wage and be counted under PAYE and get things like the covid payment and unemployment/dole. Or they can take their money in dividends and pay less tax but not get those benefits. It depends how risk adverse you want to be, but speak to a good accountant when setting things up. Accountants dont cost money, they save money. | |||
"I haven't recieved a penny since long before lockdown, because I left my job and my plan was to go self employed.. And after reading through this thread I'm now more confused about tax than ever.
Basically self employed people can pay themselves a wage and be counted under PAYE and get things like the covid payment and unemployment/dole. Or they can take their money in dividends and pay less tax but not get those benefits.
It depends how risk adverse you want to be, but speak to a good accountant when setting things up. Accountants dont cost money, they save money."Self employed people can pay themselves a wage? I thought whatever I earn when I go self employed would be mine anyway. Paying less tax sounds the better to me. I will have to see an accountant because that's all French to me. | |||
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"I haven't recieved a penny since long before lockdown, because I left my job and my plan was to go self employed.. And after reading through this thread I'm now more confused about tax than ever.
Basically self employed people can pay themselves a wage and be counted under PAYE and get things like the covid payment and unemployment/dole. Or they can take their money in dividends and pay less tax but not get those benefits.
It depends how risk adverse you want to be, but speak to a good accountant when setting things up. Accountants dont cost money, they save money.
Self employed people can pay themselves a wage? I thought whatever I earn when I go self employed would be mine anyway.
Paying less tax sounds the better to me. I will have to see an accountant because that's all French to me. "You can pay yourself a salary if you choose, no ones going to stop you. And it can be better to pay less tax, but then you cant complain when you dont get the same support as PAYE employees when you need it. | |||
"Chancellor, you have created a "look after number one" mentality in me ... That seems doubtful. It was probably there already. Even if he did; he's a Tory, looking after number one is their default setting and they think anyone who doesn't agree with them is wrong. If your plan is to fuck everyone else over, just as long as you're ok, they'll love you for doing it. "Shit Happens". "Life Isn't Fair". A lot more people are finding out it applies to them, too - not just the vulnerable and less fortunate. Maybe it wasn't their fault they were poor, after all? Maybe it was factors beyond their control? You got fucked over by a Tory government. You're not the first, you won't be the last. Suck it up and make a comeback. That's what they'd tell you." | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
Surely if your profits are over £50K,can they not subsidise your living costs temporarily?
Only if I shut my business down completely, which I won't do, because I'm not the kind of person who is happy to just sit at home, drawing 80% of my salary from the Government, and (in many cases) collecting a 20% top-up from my employer, for doing absolutely nothing. The reason I have my own business, is because I got off my backside in the first place, and started my own company, rather than just dreaming about it, but not having the balls to do it. Hence, during the lockdown, I have been proactive and diversified, to keep things ticking over. But I appreciate your concern, thank you "I am sat at home on 100% furlough, worried sick about the future. My partner is a self employed heating engineer. He's Dutch and has been self employed since arriving in the country in 1996. He didn't qualify for any help even though his business is all but gone. Our plan to retire to the country hit a minor bump (we thought pre covid) due to my ill health which used up most of my savings, hence new job I'm furloughed from. I'll count myself truly blessed if I have a job to go back to. Just like self employed people resent being called tax dodgers those of us on furlough resent the implications we're living it large on taxpayers money: we're shitting bricks knowing we're likely to lose our jobs and homes through no fault of our own. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out. "spot on  | |||
"I'm completely out of the system now having had to retire early due to ill health. However my poor daughter has been devastated by the virus being a self employed hairdresser. She worked very hard to build her client base often working 7 long days a week. She's attempted to get some form of financial help from the government and despite trying various avenues has only been offered a very trivial amount so far. She's been very conscientious about the virus even turning down offers to visit clients at home so as not to break distancing and lockdown guidelines. She has now just taken a temporary job with a well known internet store just to keep her head above water. Hardly a replacement for her former income but having always filed her returns on time and not making a fortune I do feel she really has been let down badly?
That's really sad. I hope she finds alternative income until situation returns to normal. ". Hard working, honest and did the right thing, sure hope she gets through the tough times with her head held high | |||
"I'm completely out of the system now having had to retire early due to ill health. However my poor daughter has been devastated by the virus being a self employed hairdresser. She worked very hard to build her client base often working 7 long days a week. She's attempted to get some form of financial help from the government and despite trying various avenues has only been offered a very trivial amount so far. She's been very conscientious about the virus even turning down offers to visit clients at home so as not to break distancing and lockdown guidelines. She has now just taken a temporary job with a well known internet store just to keep her head above water. Hardly a replacement for her former income but having always filed her returns on time and not making a fortune I do feel she really has been let down badly? "My other half worked his bollocks off as a heating engineer. It was hard as the government introduced boiler schemes, regulations that meant he had to re-register his gas safe certificates every five years (not cheap) and trying to compete with unregistered heating engineers. He struggled through but this pandemic has devastated his business. At nearly 60 there are few jobs open to him. It's sad watching him get knocked back. | |||
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"I haven't recieved a penny since long before lockdown, because I left my job and my plan was to go self employed.. And after reading through this thread I'm now more confused about tax than ever.
Basically self employed people can pay themselves a wage and be counted under PAYE and get things like the covid payment and unemployment/dole. Or they can take their money in dividends and pay less tax but not get those benefits.
It depends how risk adverse you want to be, but speak to a good accountant when setting things up. Accountants dont cost money, they save money.
Self employed people can pay themselves a wage? I thought whatever I earn when I go self employed would be mine anyway.
Paying less tax sounds the better to me. I will have to see an accountant because that's all French to me. "It's not as difficult as it sounds Just imagine you are a company and you are the only worker lol Your company is a bastard and doesn't pay you wages, so you pay no tax on wage BUT at end of year it pays you, the only share holder lol a dividend, which is in effect your wage and you avoid paying stuff. Hope that helps.  | |||
"I haven't recieved a penny since long before lockdown, because I left my job and my plan was to go self employed.. And after reading through this thread I'm now more confused about tax than ever.
Basically self employed people can pay themselves a wage and be counted under PAYE and get things like the covid payment and unemployment/dole. Or they can take their money in dividends and pay less tax but not get those benefits.
It depends how risk adverse you want to be, but speak to a good accountant when setting things up. Accountants dont cost money, they save money.
Self employed people can pay themselves a wage? I thought whatever I earn when I go self employed would be mine anyway.
Paying less tax sounds the better to me. I will have to see an accountant because that's all French to me.
It's not as difficult as it sounds
Just imagine you are a company and you are the only worker lol
Your company is a bastard and doesn't pay you wages, so you pay no tax on wage BUT at end of year it pays you, the only share holder lol a dividend, which is in effect your wage and you avoid paying stuff. Hope that helps. "you have the right idea to go see an accountant or business advisor, there is a difference between being self employed (sole trader) and being a private limited company , both in terms of how you pay yourself , how you are taxed, what annual paperwork needs to be prepared and published and what there could be a claim against in terms of personal vs business assets if (worst case) the business goes under pros and cons of both options depending on the size/ style of business | |||
"I'm on no money as well at the moment, but hey up guys, could be worse, could be living in Mumbai or Delhi or Lima, then we'd all know what real hardship is. Keep counting our blessings. xx" If you'd been able to, and did, save for a rainy day, you should be OK. I have lived on zero income since Dec 2018. I guess a poverty stricken childhood helped, watching my mother eek out the pounds and pennies over weeks, months and years. We barely had enough to live on but put by pennies when she could. She often made my clothes from her old dresses and I never looked like a poverty stricken child. Oops going off on a tangent  | |||
"Ltd Company Directors only! If you're not a director - find another thread you do NOT know what we are going through! If you are a director in a micro or small business, working from home with a low turnover (i.e. just making a living) I am fully ware of the situation you find yourself in. Receiving dividends is not wrong, many directors do this for LOTS of reasons NOT just as a tax dodge! You are probably of the opinion that the chancellor is a total arsehole. Those who brand you a tax cheat and say it's "payback" etc. are similar. They do this, as a rule because they don't have a clue what we are going through, or of the complexities of of our company and personal tax affairs. We are being totally overlooked by the UK government and treated far worse than blatant benefits cheats. I have never liked paying tax, no one does but until now i have never resented it. This difficult time we find ourselves in will affect many people in many ways. I for one will have not been "shown" why i should be paying more tax, i have seen why from now on i should be paying less. What you get out is not determined by what you put in, so what i put in will be far less in future. Chancellor, you have created a "look after number one" mentality in me and i'm sure countless others which will adversely affect you long after the bills for Covid-19 have been settled. " Go post on a Ltd directors only forum if you dont want people commenting. Your attitude stinks and have very little sympathy with you. | |||
"I'm on no money as well at the moment, but hey up guys, could be worse, could be living in Mumbai or Delhi or Lima, then we'd all know what real hardship is. Keep counting our blessings. xx If you'd been able to, and did, save for a rainy day, you should be OK. I have lived on zero income since Dec 2018. I guess a poverty stricken childhood helped, watching my mother eek out the pounds and pennies over weeks, months and years. We barely had enough to live on but put by pennies when she could. She often made my clothes from her old dresses and I never looked like a poverty stricken child. Oops going off on a tangent "Ahhhhh but sounds much more interesting. Think everyone with double digit IQ understands the basics of PAYE, sole trader and Ltd companies by now...... You had old dresses??..... We were so poor we were lucky to have a old handkerchief to keep us warm..... hahaha! | |||
"I haven't recieved a penny since long before lockdown, because I left my job and my plan was to go self employed.. And after reading through this thread I'm now more confused about tax than ever.
Basically self employed people can pay themselves a wage and be counted under PAYE and get things like the covid payment and unemployment/dole. Or they can take their money in dividends and pay less tax but not get those benefits.
It depends how risk adverse you want to be, but speak to a good accountant when setting things up. Accountants dont cost money, they save money.
Self employed people can pay themselves a wage? I thought whatever I earn when I go self employed would be mine anyway.
Paying less tax sounds the better to me. I will have to see an accountant because that's all French to me.
It's not as difficult as it sounds
Just imagine you are a company and you are the only worker lol
Your company is a bastard and doesn't pay you wages, so you pay no tax on wage BUT at end of year it pays you, the only share holder lol a dividend, which is in effect your wage and you avoid paying stuff. Hope that helps. "How do they avoid paying? there is a 7% levy on their dividends and as a limited company they will have to pay corporation tax. Then the pension pot and national insurance. | |||
"I haven't recieved a penny since long before lockdown, because I left my job and my plan was to go self employed.. And after reading through this thread I'm now more confused about tax than ever.
Basically self employed people can pay themselves a wage and be counted under PAYE and get things like the covid payment and unemployment/dole. Or they can take their money in dividends and pay less tax but not get those benefits.
It depends how risk adverse you want to be, but speak to a good accountant when setting things up. Accountants dont cost money, they save money."It wouldn't apply to him. He's one of the many who fall between the cracks set up by the system. I've also fallen through the cracks. Anyone applying for the help through UV will find that irrespective of whether they qualify or not, that an automated stop is put on any tax credits they were recieving from the old system. Then you'll have to try and reapply for these and most know what happens. This was a simple swipe of the pen to reign everyone in under the new system. | |||
"I'm on no money as well at the moment, but hey up guys, could be worse, could be living in Mumbai or Delhi or Lima, then we'd all know what real hardship is. Keep counting our blessings. xx If you'd been able to, and did, save for a rainy day, you should be OK. I have lived on zero income since Dec 2018. I guess a poverty stricken childhood helped, watching my mother eek out the pounds and pennies over weeks, months and years. We barely had enough to live on but put by pennies when she could. She often made my clothes from her old dresses and I never looked like a poverty stricken child. Oops going off on a tangent
Ahhhhh but sounds much more interesting. Think everyone with double digit IQ understands the basics of PAYE, sole trader and Ltd companies by now......
You had old dresses??..... We were so poor we were lucky to have a old handkerchief to keep us warm..... hahaha! "Slightly better than a fig leaf  | |||
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"We were advised 4 times to take dividends and decided not to and to run on full PAYE. While we clearly understand the problem, we also clearly understood that Yorkshire saying 'You don't get owt for nowt'. I can't see any way that the Government could unpick this even if they wanted to, the possible fraud involved could be off the scale. Perhaps the Bounce Back Loan is a route worth looking at. Hope you can find a way through. " The correct Yorkshire terminology is "'owt fer nowt and tuppence change" | |||
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"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all "and then they wonder why people don’t sympathise with their current predicament  | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all "Did I read that correctly? You could NOT live on 2500 a month ? If that's correct that's diabolical | |||
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"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all "Not been using your dividends to pay off you mortgage. | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical "There is a distinct smell of BS there me thinks | |||
| |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
and then they wonder why people don’t sympathise with their current predicament "I don't want your sympathy. I'm giving you guys mine. I'll survive thanks. Like most of my kind I scratch for business and fight for survival. I didn't make it this far without using my engenuity and entrepreneurial spirit. I feel sorry for people reliant on that furlough. I feel sorry for people who are needing to file for unemployment. Because you guys have no wiggle room. No CBILS loans, no BBLS .... a lot of people are screwed after paying a lifetime of tax. Employees pay way too much tax. They deserve to get money back. They have no say on what they get taxed the money is taken before they are even paid. If you pay too much tax you have to wait ages to get it back, effectively lending money to HMRC. If you guys had wiggle room you'd be crazy not to use it. | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical
There is a distinct smell of BS there me thinks "from the rate of tax he has been claiming to pay on dividends on similar threads i would guess its pretty accurate the irony is there will be people who are earning just moderate wages through self employment who have slipped through the net here and have ended up getting the crappy end of the deal, however the ones shouting the loudest all appear to be of this nature | |||
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"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical
There is a distinct smell of BS there me thinks
from the rate of tax he has been claiming to pay on dividends on similar threads i would guess its pretty accurate
the irony is there will be people who are earning just moderate wages through self employment who have slipped through the net here and have ended up getting the crappy end of the deal, however the ones shouting the loudest all appear to be of this nature"My other half is one of the self employed who has fallen through the net. | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical
There is a distinct smell of BS there me thinks
from the rate of tax he has been claiming to pay on dividends on similar threads i would guess its pretty accurate
the irony is there will be people who are earning just moderate wages through self employment who have slipped through the net here and have ended up getting the crappy end of the deal, however the ones shouting the loudest all appear to be of this nature"As I have said before, I pay more money in tax than most people earn as a salary. Why? Because I'm good at what I do. And I work really hard. If I was a top footballer, or a good entertainer nobody would resent what I earn. But I'm not. So yes I am guilty of having skills I can get fair compensation for as a LLC director but not as an employee. It's got nothing to do with tax. Because tax has NOTHING to do with nation building. HMRC has steadily increased taxes for LLC, flat rate VAT and dividend taxes being two examples, all the while the taxes paid by the square mile of City of London has gone down and public service funding along with it. | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical
There is a distinct smell of BS there me thinks
from the rate of tax he has been claiming to pay on dividends on similar threads i would guess its pretty accurate
the irony is there will be people who are earning just moderate wages through self employment who have slipped through the net here and have ended up getting the crappy end of the deal, however the ones shouting the loudest all appear to be of this nature
My other half is one of the self employed who has fallen through the net."My heart goes out to you guys. The Chancellor said he was going to stand behind EVERYONE. And in my book that means you guys too. I don't feel sorry for myself. I'll find work here or somewhere in Europe since they are going to recover sooner. I feel sorry for people whose fate lies in the hands of others. | |||
"I know people who have worked for themselves all their life and never gone self employed or paid any taxes on what they have earned. Makes me think why am I bothering. " On the flip side of that there's people who legally avoid tax so that they can afford to be generous with their money and make this world a better place by using their money where it really does some good. | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical
There is a distinct smell of BS there me thinks
from the rate of tax he has been claiming to pay on dividends on similar threads i would guess its pretty accurate
the irony is there will be people who are earning just moderate wages through self employment who have slipped through the net here and have ended up getting the crappy end of the deal, however the ones shouting the loudest all appear to be of this nature
As I have said before, I pay more money in tax than most people earn as a salary. Why? Because I'm good at what I do. And I work really hard.
If I was a top footballer, or a good entertainer nobody would resent what I earn. But I'm not. So yes I am guilty of having skills I can get fair compensation for as a LLC director but not as an employee. It's got nothing to do with tax. Because tax has NOTHING to do with nation building. HMRC has steadily increased taxes for LLC, flat rate VAT and dividend taxes being two examples, all the while the taxes paid by the square mile of City of London has gone down and public service funding along with it."personally i don't resent what you earn, i do however resent your attitude also you claimed customers pay VAT from their already taxed income like 2 posts back , now claiming its an LLC tax ... so is that 40% VAT now, or just the usual flip flopping to make it suit the current argument? we both know you already know VAT is a consumer tax and you only collect it on behalf of HMRC | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical
There is a distinct smell of BS there me thinks
from the rate of tax he has been claiming to pay on dividends on similar threads i would guess its pretty accurate
the irony is there will be people who are earning just moderate wages through self employment who have slipped through the net here and have ended up getting the crappy end of the deal, however the ones shouting the loudest all appear to be of this nature
As I have said before, I pay more money in tax than most people earn as a salary. Why? Because I'm good at what I do. And I work really hard.
If I was a top footballer, or a good entertainer nobody would resent what I earn. But I'm not. So yes I am guilty of having skills I can get fair compensation for as a LLC director but not as an employee. It's got nothing to do with tax. Because tax has NOTHING to do with nation building. HMRC has steadily increased taxes for LLC, flat rate VAT and dividend taxes being two examples, all the while the taxes paid by the square mile of City of London has gone down and public service funding along with it.
personally i don't resent what you earn, i do however resent your attitude
also you claimed customers pay VAT from their already taxed income like 2 posts back , now claiming its an LLC tax ... so is that 40% VAT now, or just the usual flip flopping to make it suit the current argument?
we both know you already know VAT is a consumer tax and you only collect it on behalf of HMRC "That's not strictly true because of the threshold Some obviously can earn more as they dont pay vat Vat is on turnover not profit | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Not been using your dividends to pay off you mortgage.
"No my dividends go to pay my kids university fees forva start, because they live outside the UK I have never had any tax benefit for them, but never complained. They also can't get a student loan so I foot the bill for that. Then I have a brother in Zimbabwe who has just had a stroke and I'm helping to pay his medical bills, something the British government won't do although he is a British citizen. As for a mortgage, the time I have spent working away from home cost me my marriage and my house. So no mortgage. I'm never anywhere long enough to buy a home anyway. Not complaining. It's the life I chose. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it "I don't understand why you don't have money put by then | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical
There is a distinct smell of BS there me thinks
from the rate of tax he has been claiming to pay on dividends on similar threads i would guess its pretty accurate
the irony is there will be people who are earning just moderate wages through self employment who have slipped through the net here and have ended up getting the crappy end of the deal, however the ones shouting the loudest all appear to be of this nature
As I have said before, I pay more money in tax than most people earn as a salary. Why? Because I'm good at what I do. And I work really hard.
If I was a top footballer, or a good entertainer nobody would resent what I earn. But I'm not. So yes I am guilty of having skills I can get fair compensation for as a LLC director but not as an employee. It's got nothing to do with tax. Because tax has NOTHING to do with nation building. HMRC has steadily increased taxes for LLC, flat rate VAT and dividend taxes being two examples, all the while the taxes paid by the square mile of City of London has gone down and public service funding along with it.
personally i don't resent what you earn, i do however resent your attitude
also you claimed customers pay VAT from their already taxed income like 2 posts back , now claiming its an LLC tax ... so is that 40% VAT now, or just the usual flip flopping to make it suit the current argument?
we both know you already know VAT is a consumer tax and you only collect it on behalf of HMRC
That's not strictly true because of the threshold
Some obviously can earn more as they dont pay vat
Vat is on turnover not profit
"exactly, turnover is another word for sales ... the balance that came in from the consumer if you are below the threshold for VAT you don’t charge it to your customers ... if you decide to price at the same level as others companies who are including VAT then thats your prerogative, but what you are collecting there is additional sales margin ... not a tax | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical
There is a distinct smell of BS there me thinks
from the rate of tax he has been claiming to pay on dividends on similar threads i would guess its pretty accurate
the irony is there will be people who are earning just moderate wages through self employment who have slipped through the net here and have ended up getting the crappy end of the deal, however the ones shouting the loudest all appear to be of this nature
As I have said before, I pay more money in tax than most people earn as a salary. Why? Because I'm good at what I do. And I work really hard.
If I was a top footballer, or a good entertainer nobody would resent what I earn. But I'm not. So yes I am guilty of having skills I can get fair compensation for as a LLC director but not as an employee. It's got nothing to do with tax. Because tax has NOTHING to do with nation building. HMRC has steadily increased taxes for LLC, flat rate VAT and dividend taxes being two examples, all the while the taxes paid by the square mile of City of London has gone down and public service funding along with it.
personally i don't resent what you earn, i do however resent your attitude
also you claimed customers pay VAT from their already taxed income like 2 posts back , now claiming its an LLC tax ... so is that 40% VAT now, or just the usual flip flopping to make it suit the current argument?
we both know you already know VAT is a consumer tax and you only collect it on behalf of HMRC "HMRC used to give the businessman a reward for this tax collecting by allowing them to only pay a portion of their VAT back to tue government. That has been recently taken away. I'm not complaining because as I have pointed out on other threads when the government increases my taxes I pass those taxes on to my customers. (And then a bit for good measure ).
After covid-19 HMRC will be getting their money back with PAYE and that's you guys again. You'll just have to take it. | |||
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"IR35 will come in after this pandemic has settled down Bring it on " Yeah well done. Take the UK economy when it's down and kick it in the teeth with IR35 ... bravo!!! | |||
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"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all "Mate, I've been in your position, I understand the stresses and risks and the relentless work involved in running your own business. But that above statement just sounds cringy. Try being more generous of spirit, it's nicer. | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Mate, I've been in your position, I understand the stresses and risks and the relentless work involved in running your own business.
But that above statement just sounds cringy.
Try being more generous of spirit, it's nicer. "Oh I tried that approach. It seems my fellow fabbers are rubbing the hands with glee at the prospective demise of people simply because they followed sound business practice. They are like people who have been mugged, who instead of resenting the muggers, resent people who didn't get mugged. You'd think these malicious people were paying LLC directors out of their pockets. I don't have a mortgage, my car is paid off. I couldn't take a BBLS furlough myself and be on the beach with the peanut gallery. Instead I'm working my butt off, weekends, late nights etc to help make a project possible so that people on furlough can return safely to work. I am earning taxes in order that the government can afford to be so generous. But the message I get for my efforts is that despite the fact that I pay more tax than most of them it isn't enough, and never will be enough. But instead of resenting these people for their cynicism, I thank them. Because we can't all be LLC directors I am thankful to those who sit in dead end jobs, under rewarded for their work, getting taxed into the ground so that people like myself can market their skills for what they are worth
For me alone I need less than a directors furlough wage to survive. I need several thousand to continue support those who rely on my generousity. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out. "Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends. | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Not been using your dividends to pay off you mortgage.
No my dividends go to pay my kids university fees forva start, because they live outside the UK I have never had any tax benefit for them, but never complained. They also can't get a student loan so I foot the bill for that. Then I have a brother in Zimbabwe who has just had a stroke and I'm helping to pay his medical bills, something the British government won't do although he is a British citizen.
As for a mortgage, the time I have spent working away from home cost me my marriage and my house. So no mortgage. I'm never anywhere long enough to buy a home anyway. Not complaining. It's the life I chose."I think it's worth buying somewhere if you can | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Not been using your dividends to pay off you mortgage.
No my dividends go to pay my kids university fees forva start, because they live outside the UK I have never had any tax benefit for them, but never complained. They also can't get a student loan so I foot the bill for that. Then I have a brother in Zimbabwe who has just had a stroke and I'm helping to pay his medical bills, something the British government won't do although he is a British citizen.
As for a mortgage, the time I have spent working away from home cost me my marriage and my house. So no mortgage. I'm never anywhere long enough to buy a home anyway. Not complaining. It's the life I chose.
I think it's worth buying somewhere if you can "Lots of people do. They buy a house in Wales while their business rents them a swanky "office" to live in. I don't do this, nor do claim half the expenses I am entitled to. The fact is I don't screw the pooch like some people do but I get tarred with the same brush. As my poor attitude in my previous posts indicate I don't give a hoot what they think. Right now my continuing to work through covid, and continuing to pay tax is allowing several furloughed people to go back to work and my tax is keeping several furloughed people on the beach while I work. For those cheering at my expected demise I have bad news for them. By the end of this I will be stonger for it. I'll have less competition and be able to charge more for my services than ever before. This is my attitude. Never say die! | |||
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"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends."its not tax evasion its tax avoidance one is legal one is not that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter, you also get an extra £2k added to your tax free allowance if its taken as dividends so thats £2k free and then 27% rather than between 35.5- 45.5% thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
"If it's not illegal what's wrong with it? It's what any good business person would do. It's no different to any employee who gets tax benefits from having children etc. The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it. There is no plotting and scheming. The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax! | |||
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" I think it's worth buying somewhere if you can Lots of people do. They buy a house in Wales while their business rents them a swanky "office" to live in. I don't do this, nor do claim half the expenses I am entitled to. The fact is I don't screw the pooch like some people do but I get tarred with the same brush. As my poor attitude in my previous posts indicate I don't give a hoot what they think. Right now my continuing to work through covid, and continuing to pay tax is allowing several furloughed people to go back to work and my tax is keeping several furloughed people on the beach while I work. For those cheering at my expected demise I have bad news for them. By the end of this I will be stonger for it. I'll have less competition and be able to charge more for my services than ever before. This is my attitude. Never say die!" Before you get too high and mighty, it really depends on what you are doing or enabling other companies to do. It you are a genuine wealth creating business or just a money moving company, that usually ends up giving our wealth to China. Wealth creators would be industries actually bringing monies into the country. These are deserving of thanks but are very rare now. Which is why we as a country, have to borrow money to maintain our lifestyles and China has money to invest in everything. It won't end well. | |||
"And perhaps you guys would like to get the dividend tax thing right too please. There are three bands for dividend tax. 7.5% 32.5% 38.1% This is a tax applied AGAIN on money that has ALREADY been taxed once." yeah it was1 in the mornings and i quoted what the poster had put ... so actually CT plus divided is 26.5 instead of 27 ... it doesnt change the point and your band goes to 32.5% at the same time paye goes to 40 so that also doesnt change the point ...i was only comparing like with like at basic rate tax payer | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!"you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5% the only disagreement i have is with the total hypocrisy of these posts people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you | |||
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"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
"Paying tax is not a moral responsibility. It's getting mugged. Many businessesmen after avoiding tax put their money to philanthropic use. Paying extra tax to HMRC means Boris's super rich friends can pay even less tax. All our government does with our money is piss it against a wall. Charities are for moral purposes. Tax is something else. | |||
"Thank you to all employees from a Ltd Company director. Since some of you are paying 40% PAYE when you earn your money anf 20% VAT when you spend it. You effectively spend more than 50% of your time working for the government. If you work for 30 years then more than 15 years is spent working as a free civil servant. So thanks guys. Thanks for allowing yourselves to get mugged month after month by the taxman without any control over minimising that taxation. If it weren't for you guys paying so much tax, it wouldn't be possible for directors to structure their tax efficiently. Sorry that guys like myself aren't up for being mugged the way you are. So enjoy your £2500 a month if it makes you feel superior. But hell I couldn't live on that. Good luck to you all
Did I read that correctly?
You could NOT live on 2500 a month ?
If that's correct that's diabolical "I'd be able to save at least 2 grand a month | |||
" I think it's worth buying somewhere if you can Lots of people do. They buy a house in Wales while their business rents them a swanky "office" to live in. I don't do this, nor do claim half the expenses I am entitled to. The fact is I don't screw the pooch like some people do but I get tarred with the same brush. As my poor attitude in my previous posts indicate I don't give a hoot what they think. Right now my continuing to work through covid, and continuing to pay tax is allowing several furloughed people to go back to work and my tax is keeping several furloughed people on the beach while I work. For those cheering at my expected demise I have bad news for them. By the end of this I will be stonger for it. I'll have less competition and be able to charge more for my services than ever before. This is my attitude. Never say die! Before you get too high and mighty, it really depends on what you are doing or enabling other companies to do. It you are a genuine wealth creating business or just a money moving company, that usually ends up giving our wealth to China. Wealth creators would be industries actually bringing monies into the country. These are deserving of thanks but are very rare now. Which is why we as a country, have to borrow money to maintain our lifestyles and China has money to invest in everything. It won't end well. "I sell my skills. Skills that fetch a good rate all around the world from Shenzhen to Buenos Aires. I'm not just earning VAT I'm bringing money into the country that contributes to our economy. The work I am doing right now is on a project which will earn this country handreds of millions in the years to come. I am not a middleman. While you're watching your game on the weekend. I'm working. While you're having your bank holiday with your family. I'm working. While you're tucked up in bed at 2:00am... I'm probably working. My productivity rate is high because I get paid for what I produce. Not how long I keep a chair warm. So if people can't handle that I have more than them it's because I work like a dog not because I cheat on my taxes. And if people don't like that they can do what I do too. There's a skills shortage in my field. After covid there will be less. By the way I am not bitching because I don't get a handout. I am thanking those who don't have a choice as to how much tax they pay. I do however feel sorry for ANYONE facing destitution because of this virus because I feel compassion for my fellow human regardless...... rather than laughing at their misfortune. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
" | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
"Ok let me explain the difference between the LLC Director and the multibillion corporation. LLC Director plays by the rules snd within the rules to the best advantage possible. Big money on the other hand buys politicians and get them to change the rules in their favour. If you think I'm a nut spouting conspiracy theories, watch Robert Reich in "Saving Capitalism". And if you really want to understand the game read Rich Dad Poor Dad and find out that the only difference between rich and poor is the way we think. He, too by the way acknowledges that for people to make money by making their money work them require the employee tax payer to keep things running. I know this was supposed to be a thread where permanently employed people get to thumb their noses at directors. Sorry if a director has instead thumbed his nose at you.... and it's bent you all out of shape | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
Ok let me explain the difference between the LLC Director and the multibillion corporation.
LLC Director plays by the rules snd within the rules to the best advantage possible.
Big money on the other hand buys politicians and get them to change the rules in their favour.
If you think I'm a nut spouting conspiracy theories, watch Robert Reich in "Saving Capitalism".
And if you really want to understand the game read Rich Dad Poor Dad and find out that the only difference between rich and poor is the way we think. He, too by the way acknowledges that for people to make money by making their money work them require the employee tax payer to keep things running.
I know this was supposed to be a thread where permanently employed people get to thumb their noses at directors. Sorry if a director has instead thumbed his nose at you.... and it's bent you all out of shape "There are plenty of LLC directors who don’t play by or within the rules and the purpose of this thread was actually for LLC directors to whinge that they were being hard done by. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
Ok let me explain the difference between the LLC Director and the multibillion corporation.
LLC Director plays by the rules snd within the rules to the best advantage possible.
Big money on the other hand buys politicians and get them to change the rules in their favour.
If you think I'm a nut spouting conspiracy theories, watch Robert Reich in "Saving Capitalism".
And if you really want to understand the game read Rich Dad Poor Dad and find out that the only difference between rich and poor is the way we think. He, too by the way acknowledges that for people to make money by making their money work them require the employee tax payer to keep things running.
I know this was supposed to be a thread where permanently employed people get to thumb their noses at directors. Sorry if a director has instead thumbed his nose at you.... and it's bent you all out of shape
There are plenty of LLC directors who don’t play by or within the rules and the purpose of this thread was actually for LLC directors to whinge that they were being hard done by."I actually had a nice chat with OP before he left the site. He is fine personally and only arguing on principle. The ones who don't play by the rules have more reason to have money stashed away and those who do play by the rules more likely to go under. Is this the ideal situation? Maybe HMRC should spend more of their time chasing down genuine tax dodgers and less time being bully boys taking legitimate businesses to court and spending more on legal costs than money recovered. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
Ok let me explain the difference between the LLC Director and the multibillion corporation.
LLC Director plays by the rules snd within the rules to the best advantage possible.
Big money on the other hand buys politicians and get them to change the rules in their favour.
If you think I'm a nut spouting conspiracy theories, watch Robert Reich in "Saving Capitalism".
And if you really want to understand the game read Rich Dad Poor Dad and find out that the only difference between rich and poor is the way we think. He, too by the way acknowledges that for people to make money by making their money work them require the employee tax payer to keep things running.
I know this was supposed to be a thread where permanently employed people get to thumb their noses at directors. Sorry if a director has instead thumbed his nose at you.... and it's bent you all out of shape
There are plenty of LLC directors who don’t play by or within the rules and the purpose of this thread was actually for LLC directors to whinge that they were being hard done by.
I actually had a nice chat with OP before he left the site.
He is fine personally and only arguing on principle.
The ones who don't play by the rules have more reason to have money stashed away and those who do play by the rules more likely to go under.
Is this the ideal situation?
Maybe HMRC should spend more of their time chasing down genuine tax dodgers and less time being bully boys taking legitimate businesses to court and spending more on legal costs than money recovered.
"HMRC/DWP won't do that because they don't have enough the resources to start in depth investigations. Its so much easier to penalise those currently in the system for descrpences than it is to go after those that are not. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
Ok let me explain the difference between the LLC Director and the multibillion corporation.
LLC Director plays by the rules snd within the rules to the best advantage possible.
Big money on the other hand buys politicians and get them to change the rules in their favour.
If you think I'm a nut spouting conspiracy theories, watch Robert Reich in "Saving Capitalism".
And if you really want to understand the game read Rich Dad Poor Dad and find out that the only difference between rich and poor is the way we think. He, too by the way acknowledges that for people to make money by making their money work them require the employee tax payer to keep things running.
I know this was supposed to be a thread where permanently employed people get to thumb their noses at directors. Sorry if a director has instead thumbed his nose at you.... and it's bent you all out of shape
There are plenty of LLC directors who don’t play by or within the rules and the purpose of this thread was actually for LLC directors to whinge that they were being hard done by.
I actually had a nice chat with OP before he left the site.
He is fine personally and only arguing on principle.
The ones who don't play by the rules have more reason to have money stashed away and those who do play by the rules more likely to go under.
Is this the ideal situation?
Maybe HMRC should spend more of their time chasing down genuine tax dodgers and less time being bully boys taking legitimate businesses to court and spending more on legal costs than money recovered.
HMRC/DWP won't do that because they don't have enough the resources to start in depth investigations.
Its so much easier to penalise those currently in the system for descrpences than it is to go after those that are not. "Have a gander at this.... https://www.theguardian.com/uk-news/2019/feb/14/homeless-man-fined-by-hmrc-for-missing-tax-return-krzysztof-pokorowski | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
Ok let me explain the difference between the LLC Director and the multibillion corporation.
LLC Director plays by the rules snd within the rules to the best advantage possible.
Big money on the other hand buys politicians and get them to change the rules in their favour.
If you think I'm a nut spouting conspiracy theories, watch Robert Reich in "Saving Capitalism".
And if you really want to understand the game read Rich Dad Poor Dad and find out that the only difference between rich and poor is the way we think. He, too by the way acknowledges that for people to make money by making their money work them require the employee tax payer to keep things running.
I know this was supposed to be a thread where permanently employed people get to thumb their noses at directors. Sorry if a director has instead thumbed his nose at you.... and it's bent you all out of shape
There are plenty of LLC directors who don’t play by or within the rules and the purpose of this thread was actually for LLC directors to whinge that they were being hard done by.
I actually had a nice chat with OP before he left the site.
He is fine personally and only arguing on principle.
The ones who don't play by the rules have more reason to have money stashed away and those who do play by the rules more likely to go under.
Is this the ideal situation?
Maybe HMRC should spend more of their time chasing down genuine tax dodgers and less time being bully boys taking legitimate businesses to court and spending more on legal costs than money recovered.
HMRC/DWP won't do that because they don't have enough the resources to start in depth investigations.
Its so much easier to penalise those currently in the system for descrpences than it is to go after those that are not.
Have a gander at this....
https://www.theguardian.com/uk-news/2019/feb/14/homeless-man-fined-by-hmrc-for-missing-tax-return-krzysztof-pokorowski
"Exactly this. He may have been homeless but he appeared on the radar at some point, as he has been homeless for so long the HMRC/DWP records lapse. HMRC is not interested in personal circumstances, all they are asking is you provide them with information to prove you were not earning any income. I assume he may have had a job in the past which was traceable, so they will have issued generic proof of income letters to his last known address which they will have on record. I think they go back 10 years possibly more. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
Ok let me explain the difference between the LLC Director and the multibillion corporation.
LLC Director plays by the rules snd within the rules to the best advantage possible.
Big money on the other hand buys politicians and get them to change the rules in their favour.
If you think I'm a nut spouting conspiracy theories, watch Robert Reich in "Saving Capitalism".
And if you really want to understand the game read Rich Dad Poor Dad and find out that the only difference between rich and poor is the way we think. He, too by the way acknowledges that for people to make money by making their money work them require the employee tax payer to keep things running.
I know this was supposed to be a thread where permanently employed people get to thumb their noses at directors. Sorry if a director has instead thumbed his nose at you.... and it's bent you all out of shape
There are plenty of LLC directors who don’t play by or within the rules and the purpose of this thread was actually for LLC directors to whinge that they were being hard done by.
I actually had a nice chat with OP before he left the site.
He is fine personally and only arguing on principle.
The ones who don't play by the rules have more reason to have money stashed away and those who do play by the rules more likely to go under.
Is this the ideal situation?
Maybe HMRC should spend more of their time chasing down genuine tax dodgers and less time being bully boys taking legitimate businesses to court and spending more on legal costs than money recovered.
HMRC/DWP won't do that because they don't have enough the resources to start in depth investigations.
Its so much easier to penalise those currently in the system for descrpences than it is to go after those that are not.
Have a gander at this....
https://www.theguardian.com/uk-news/2019/feb/14/homeless-man-fined-by-hmrc-for-missing-tax-return-krzysztof-pokorowski
Exactly this. He may have been homeless but he appeared on the radar at some point, as he has been homeless for so long the HMRC/DWP records lapse.
HMRC is not interested in personal circumstances, all they are asking is you provide them with information to prove you were not earning any income.
I assume he may have had a job in the past which was traceable, so they will have issued generic proof of income letters to his last known address which they will have on record.
I think they go back 10 years possibly more.
"Apparently the judge in this case gave HMRC a rap over the knuckles and said they needed to learn some compassion. So how about when HMRC don't play by the rules. A number of judges have said the CEST tool is biased in favour of HMRC yet still it remains unchanged, putting people legitimately outside IR35 inside IR35. Don't you think it's sad that contractors clearly outside IR35 need to take insurance against frivolous cases laid against them by HMRC? People who want to avoid all this simply work under umbrella companies. Ironic that people working under umbrella companies have been afforded protection by the Chancellor? | |||
| |||
"There will always be companies who will abuse the system and I have no time for them, one of the main reasons of being a very small ltd company was advised by solicitors and accountants as society has become a blame and claim one nothing to do with tax some of us simply want to protect our family homes and nothing more. I have no issues with what I can claim during this lockdown but if you can't work you should be helped as those who don't work at all are before and after lockdown." We all despise those who cheat on their taxes. They give the rest of us a bad name and we all get tarred with the same brush. As for handouts this government can shove their handouts and give them to their billionaire friends like the mob are baying for. The tough will survive. We will still have our earnings determined by our own input and the mob will still be 50% free civil servants. | |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
Ok let me explain the difference between the LLC Director and the multibillion corporation.
LLC Director plays by the rules snd within the rules to the best advantage possible.
Big money on the other hand buys politicians and get them to change the rules in their favour.
If you think I'm a nut spouting conspiracy theories, watch Robert Reich in "Saving Capitalism".
And if you really want to understand the game read Rich Dad Poor Dad and find out that the only difference between rich and poor is the way we think. He, too by the way acknowledges that for people to make money by making their money work them require the employee tax payer to keep things running.
I know this was supposed to be a thread where permanently employed people get to thumb their noses at directors. Sorry if a director has instead thumbed his nose at you.... and it's bent you all out of shape
There are plenty of LLC directors who don’t play by or within the rules and the purpose of this thread was actually for LLC directors to whinge that they were being hard done by.
I actually had a nice chat with OP before he left the site.
He is fine personally and only arguing on principle.
The ones who don't play by the rules have more reason to have money stashed away and those who do play by the rules more likely to go under.
Is this the ideal situation?
Maybe HMRC should spend more of their time chasing down genuine tax dodgers and less time being bully boys taking legitimate businesses to court and spending more on legal costs than money recovered.
HMRC/DWP won't do that because they don't have enough the resources to start in depth investigations.
Its so much easier to penalise those currently in the system for descrpences than it is to go after those that are not.
Have a gander at this....
https://www.theguardian.com/uk-news/2019/feb/14/homeless-man-fined-by-hmrc-for-missing-tax-return-krzysztof-pokorowski
Exactly this. He may have been homeless but he appeared on the radar at some point, as he has been homeless for so long the HMRC/DWP records lapse.
HMRC is not interested in personal circumstances, all they are asking is you provide them with information to prove you were not earning any income.
I assume he may have had a job in the past which was traceable, so they will have issued generic proof of income letters to his last known address which they will have on record.
I think they go back 10 years possibly more.
Apparently the judge in this case gave HMRC a rap over the knuckles and said they needed to learn some compassion.
So how about when HMRC don't play by the rules. A number of judges have said the CEST tool is biased in favour of HMRC yet still it remains unchanged, putting people legitimately outside IR35 inside IR35.
Don't you think it's sad that contractors clearly outside IR35 need to take insurance against frivolous cases laid against them by HMRC?
People who want to avoid all this simply work under umbrella companies. Ironic that people working under umbrella companies have been afforded protection by the Chancellor?"I think you mentioned this before on the last thread and your right. Yes the CEST tool is biased in favour of the HMRC. But Its a high revenue earner for them. Again you mentioned an outdated system. Absolutely. They are modifying and tweaking a system that has been around for decades, which again will be down to which method generates the most revenue for them. Like you explained to others on here, you are not flouting the system to avoid paying tax, your working to the guidlines set by them. In turn HMRC are constantly tweeking the system to gain the highest revenue margin at the time. With whats happening now this will be there way of generating the most income. No doubt when this and the recession we face is over, the rules will change again. | |||
| |||
| |||
"I genuinely believe, with the speed the crisis occurred, that people like myself fell through the net, mainly because our situations aren't as black and white as a PAYE employee. For those people who don't understand, and just accuse us of being tax dodgers, that's your opinion, and you're entitled to it
HMRC state they cannot evaluate our incomes because of the way we have drawn dividends, as a tax-effective method of paying ourselves. Bear in mind of course, that these dividends aren't fixed, and usually reflect how well our businesses have performed throughout our tax year, so, on a good trading year, yes we take more, but on a poor trading year, we draw less.
I have paid Corporation Tax every year, over the last 20 years. I have paid tax on all my dividend payments (there's really no tax-dodging going on here). I have also generated VAT payments every quarter, over the last 20 years too. My business has a 6 figure turnover, and my profits are in excess of £50k, I have no business premises, so I am one of the worst affected, with next to zero financial help from the Government.
One thing I know for sure, is I won't be making any Corporation Tax payment for this financial year, and for as many successive years to come, if I can 'avoid' it
1. You have not paid corporation tax. The buisness did.
2. Your customers pay the vat not yourself or the business
3. How much tax did you pay on your divideds? Did it amount to the same if you had paid yourself that amount via PAYE?
If you avoid tax you cant expect the tax man to bail you out.
Corporation tax is 20% of any profit the company makes which the director/ directors work for, making a profit is what a successful business should do and in the meantime to lower profit a company will invest in different ways be it extra staff, vehicles, any kit computers etc, plant machinery and so on. All this generates the economy to run
Any dividends that are withdrawn from the company are taxed as personal at a rate of 7% so basically a Ltd company that is successful will pay 27% tax, how is this tax evasion unless there is profit you can't draw dividends.
its not tax evasion
its tax avoidance
one is legal one is not
that same tax had it been taken via paye would have earned the hmrc 20% income tax , 13.5% employer national insurance and 12% employee NI on a portion 2% thereafter,
you also get an extra £2k added to your tax free allowance if its taken as dividends
so thats £2k free and then 27% rather than between 35.5- 45.5%
thats before we even get into the “investment” and allowable expenses to bring the profit down to start with, where often it really means business money pre tax is spent on personal items like their phone, top of the range laptops and fancy car, went out for a meal- client entertaining, etc etc all of which would be again taxable on paye as staff benefits if also used for personal purposes
If it's not illegal what's wrong with it?
It's what any good business person would do.
It's no different to any employee who gets tax benefits from having children etc.
The process isn't actually as nefarious as people think. I'm an engineer not an accountant. I phone up my accountant and say: my business has made some money how does one take it out legally. The accountant says do this do that. You say is it legal amd your accountant says that's the way everyone does it.
There is no plotting and scheming.
The same way employees get their pay slip, see their PAYE and NI contributions and never phone up the pay office and say: hey I want to pay more tax!
you’ve quoted my post here asking whats wrong with it, when you know fine well ive never once on any of these threads said you cant take you money that way
i only comment because you are great at selecting parts of the information and throwing it out there for people who dont know about tax to bite ... like the thread where you were on about your high rate tax band dividends worded in a way to suggest you pay more , omitting to say those are actually comparable with high rate tax paye and CT plus HR dividends is still 51.5% vs the paye equivalent of 55.5%
the only disagreement i have is with the total hypocrisy of these posts
people who have effectively dodged the entire pay related NI scheme and are now outraged that they are not being provided with whats effectively national income
and with the people who think its ok to do what they do because its legal yet throw out comments like “all the corporations that avoid their tax” to deflect... what they are doing is also legal ...”good business” was it you called it? if its good for you its good for them and if they should have a moral responsibility maybe you need to rethink why that doesn’t seem to apply to you
Ok let me explain the difference between the LLC Director and the multibillion corporation.
LLC Director plays by the rules snd within the rules to the best advantage possible.
Big money on the other hand buys politicians and get them to change the rules in their favour.
If you think I'm a nut spouting conspiracy theories, watch Robert Reich in "Saving Capitalism".
And if you really want to understand the game read Rich Dad Poor Dad and find out that the only difference between rich and poor is the way we think. He, too by the way acknowledges that for people to make money by making their money work them require the employee tax payer to keep things running.
I know this was supposed to be a thread where permanently employed people get to thumb their noses at directors. Sorry if a director has instead thumbed his nose at you.... and it's bent you all out of shape
There are plenty of LLC directors who don’t play by or within the rules and the purpose of this thread was actually for LLC directors to whinge that they were being hard done by.
I actually had a nice chat with OP before he left the site.
He is fine personally and only arguing on principle.
The ones who don't play by the rules have more reason to have money stashed away and those who do play by the rules more likely to go under.
Is this the ideal situation?
Maybe HMRC should spend more of their time chasing down genuine tax dodgers and less time being bully boys taking legitimate businesses to court and spending more on legal costs than money recovered.
HMRC/DWP won't do that because they don't have enough the resources to start in depth investigations.
Its so much easier to penalise those currently in the system for descrpences than it is to go after those that are not.
Have a gander at this....
https://www.theguardian.com/uk-news/2019/feb/14/homeless-man-fined-by-hmrc-for-missing-tax-return-krzysztof-pokorowski
Exactly this. He may have been homeless but he appeared on the radar at some point, as he has been homeless for so long the HMRC/DWP records lapse.
HMRC is not interested in personal circumstances, all they are asking is you provide them with information to prove you were not earning any income.
I assume he may have had a job in the past which was traceable, so they will have issued generic proof of income letters to his last known address which they will have on record.
I think they go back 10 years possibly more.
Apparently the judge in this case gave HMRC a rap over the knuckles and said they needed to learn some compassion.
So how about when HMRC don't play by the rules. A number of judges have said the CEST tool is biased in favour of HMRC yet still it remains unchanged, putting people legitimately outside IR35 inside IR35.
Don't you think it's sad that contractors clearly outside IR35 need to take insurance against frivolous cases laid against them by HMRC?
People who want to avoid all this simply work under umbrella companies. Ironic that people working under umbrella companies have been afforded protection by the Chancellor?
I think you mentioned this before on the last thread and your right.
Yes the CEST tool is biased in favour of the HMRC. But Its a high revenue earner for them.
Again you mentioned an outdated system. Absolutely.
They are modifying and tweaking a system that has been around for decades, which again will be down to which method generates the most revenue for them.
Like you explained to others on here, you are not flouting the system to avoid paying tax, your working to the guidlines set by them.
In turn HMRC are constantly tweeking the system to gain the highest revenue margin at the time.
With whats happening now this will be there way of generating the most income.
No doubt when this and the recession we face is over, the rules will change again.
"Cheers mate | |||
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