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Reconsider the new Dividend Tax for small businesses - Gouvernment Petition

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    #31
    Originally posted by Maslins View Post
    My understanding of the Tories is that they've never been in favour of small businesses, or the aspirational. They're in favour of the elite staying elite, and the rest being screwed to ensure they can't join the elite.
    You may have had some grounds in the Tory party of several decades ago but not now. Most of the Tory MP's now have ordinary backgrounds, the image has been tainted by Cameron appointing too many of his 'mates' to the top jobs.

    I welcome the crack down on by to let landlords, they are making it harder for young people to get on to the property ladder. Without banning it one tactic is moving on mortgage relief.

    The stamp duty changes exempts large commercial landlords because some investment is needed and large investors rarely buy up individual houses but mainly build their own large single developments so shouldn't affect the first time buyers.
    "The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." Cicero

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      #32
      Originally posted by SueEllen View Post
      Labour can rely on their tribal vote but the vote was not enough to keep their seats in Scotland. One of the main reasons cited was not listening to people especially female voters regardless of the gender of the candidate Labour put up. Labour need the Scottish seats to be in government.
      There will be coalition of Labour with SNP in next Govt - for the good of the country to get rid of Tories. SNP tax policies (50% tax) were much milder compared to what Tories have already done.

      So, this means Labour will need to win just a handful of seats in England in order to win (with SNP) next elections - they'll save lots of money not having to run campaign in Scotland too.

      How many of BTL people voted Tories and how many will do so in 2020? What about self employed/small business? Middle classes who got hit very hard with things like child benefit removal etc? There going to be massive Labour landslide next elections and all thanks to Osborne's taxing policies.
      Last edited by AtW; 8 January 2016, 13:35.

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        #33
        Originally posted by Maslins View Post
        Dividend tax didn't come to a surprise to me. Corporation tax rates realistically needed to come down, as globalisation makes it increasingly easy for businesses (barring the really little ones) to shuffle profits offshore. No good trying to get 30% of £0.
        Corp tax is optional for big multinational businesses: it's 20% now but they are still paying almost nothing and they don't even pay at Irish 12.5% rates - they take money via Holland to end up paying near 0% corp tax, this is still not stopped and won't be stopped for a very long time.

        If Osborne wanted "fairness" then why can't actual paid corp tax to be used pro rata for those who get to pay tax on dividends as real tax credit? Not notional %-tage, but actual REAL MONEY ALREADY PAID TO HMRC as means to offset tax on dividends, why are they not doing it??? It's obvious - they want to double tax same money.

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          #34
          Originally posted by AtW View Post
          If Osborne wanted "fairness" then why can't actual paid corp tax to be used pro rata for those who get to pay tax on dividends as real tax credit? Not notional %-tage, but actual REAL MONEY ALREADY PAID TO HMRC as means to offset tax on dividends, why are they not doing it??? It's obvious - they want to double tax same money.
          Sounds like a nightmare to administer. So, every dividend would need a tax credit calculated specifically for it, based on CT suffered? Which CT would you use?

          Eg company year end 31 Dec, quite feasibly the 2014 CT liability could bear negligible resemblance to the 2015 liability...so would the dividend tax credit be based on when the dividend was paid? If so, more head scratching over whether it makes sense to pay a dividend on 31 Dec or 01 Jan, based on forecast of CT liability.

          Personally I think that's something that might superficially sound like a good idea, but in practice is completely unworkable. Certainly wouldn't help simplify the tax system IMHO.

          Comment


            #35
            Originally posted by Waldorf View Post
            You may have had some grounds in the Tory party of several decades ago but not now. Most of the Tory MP's now have ordinary backgrounds, the image has been tainted by Cameron appointing too many of his 'mates' to the top jobs.

            I welcome the crack down on by to let landlords, they are making it harder for young people to get on to the property ladder. Without banning it one tactic is moving on mortgage relief.

            The stamp duty changes exempts large commercial landlords because some investment is needed and large investors rarely buy up individual houses but mainly build their own large single developments so shouldn't affect the first time buyers.
            I personally agree with the bit I've bolded...but don't agree with how they've gone about it. Basically the changes have hit:
            - the poorer BTLers, and
            - those who don't already have a big portfolio.
            Those sitting on massive portfolios with no/negligible mortgages won't be impacted by either change, and those are the people who IMHO should be hit. Certainly they're the ones who can afford it the most.

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              #36
              Originally posted by Maslins View Post
              Sounds like a nightmare to administer. So, every dividend would need a tax credit calculated specifically for it, based on CT suffered? Which CT would you use?
              It's trivial - corp tax is already known to HMRC for each year, shareholders also know that number - allocate it pro rate to shareholding as real tax credit and the job is done.

              Originally posted by Maslins View Post
              Eg company year end 31 Dec, quite feasibly the 2014 CT liability could bear negligible resemblance to the 2015 liability...so would the dividend tax credit be based on when the dividend was paid? If so, more head scratching over whether it makes sense to pay a dividend on 31 Dec or 01 Jan, based on forecast of CT liability.
              Would you prefer to scratch your head a bit and avoid paying double taxes, or would you prefer to pay double taxes? At any point of paying dividends company must know it's liabilities, including corp tax due - we calculate it monthly and keep funds in separate account which is untouched.

              In reality ALL tax paid by a company should be taken into account - including PAYE taxes generated, business rates, corp tax - whole whack, that all should be deemed as real tax credit to shareholders who gets paid dividends from what's left. And yes, after that dividend tax rates could be same as income tax.

              Originally posted by Maslins View Post
              Personally I think that's something that might superficially sound like a good idea, but in practice is completely unworkable. Certainly wouldn't help simplify the tax system IMHO.
              It won't happen because Govt prefers to double tax money, this way they maintain separate rates - corp tax and divi tax which look OKish.

              Comment


                #37
                Originally posted by Maslins View Post
                I personally agree with the bit I've bolded...but don't agree with how they've gone about it. Basically the changes have hit:
                - the poorer BTLers, and
                - those who don't already have a big portfolio.
                Those sitting on massive portfolios with no/negligible mortgages won't be impacted by either change, and those are the people who IMHO should be hit. Certainly they're the ones who can afford it the most.
                The point your missing is those with a massive portfolio are the ones who have re-mortgaged and are up to their eye balls in debt.

                This new tory legislation will mean that they are brought to their knees and have to sell up sharpish (which usually means sell cheap as well- which is greater for those without a home).

                I can't believe you have missed that obvious point! Or am I missing something?

                Comment


                  #38
                  Originally posted by JB3000 View Post
                  The point your missing is those with a massive portfolio are the ones who have re-mortgaged and are up to their eye balls in debt.

                  This new tory legislation will mean that they are brought to their knees and have to sell up sharpish (which usually means sell cheap as well- which is greater for those without a home).

                  I can't believe you have missed that obvious point! Or am I missing something?
                  Two oversimplified examples to demonstrate what I'm saying:
                  - Person A owns 10 BTL properties outright.
                  - Person B owns 10 BTL properties with 75% LTV mortgages.
                  Person A is wealthier (4 times so). Person A is in a far lower risk position. Yet person B is the only one to be hurt by the new rules re mortgage interest.

                  - Person X owns 100 BTL properties outright. They live off the income from them, no desire/need to expand.
                  - Person Y owns their own home, wants to buy one BTL as a form of pension.

                  Person X is vastly wealthier. Person X does nothing, just plods along based on inherited wealth. Person Y is pushing themselves. Person Y is the only one hit by the new stamp duty change.

                  Hence why I say that both the new BTL changes suck.

                  Comment


                    #39
                    Reconsider the new Dividend Tax for small businesses - Gouvernment Petition

                    Originally posted by Maslins View Post
                    Two oversimplified examples to demonstrate what I'm saying:
                    - Person A owns 10 BTL properties outright.
                    - Person B owns 10 BTL properties with 75% LTV mortgages.
                    Person A is wealthier (4 times so). Person A is in a far lower risk position. Yet person B is the only one to be hurt by the new rules re mortgage interest.

                    - Person X owns 100 BTL properties outright. They live off the income from them, no desire/need to expand.
                    - Person Y owns their own home, wants to buy one BTL as a form of pension.

                    Person X is vastly wealthier. Person X does nothing, just plods along based on inherited wealth. Person Y is pushing themselves. Person Y is the only one hit by the new stamp duty change.

                    Hence why I say that both the new BTL changes suck.
                    Person B is helping to push up prices for first timers, one thing a government can do is restrict the tax benefits of boring with debt. This is good in my view.

                    Person X may not necessarily be living on inherited wealth, he may have worked hard and built it up himself.

                    Many buy to let investors do not fully understand the market, thinking it is a one way bet. Often they operate with too tight margins, not fully accounting for the full costs, voids, repairs etc so a small restriction on tax relief for debt costs should not send them over the edge, if it does, what did they have planned if interest rates rise, as they will do, as this will have a much bigger impact than a small tax relief change.
                    "The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." Cicero

                    Comment


                      #40
                      Originally posted by Waldorf View Post
                      Many buy to let investors do not fully understand the market, thinking it is a one way bet. Often they operate with too tight margins, not fully accounting for the full costs, voids, repairs etc so a small restriction on tax relief for debt costs should not send them over the edge, if it does, what did they have planned if interest rates rise, as they will do, as this will have a much bigger impact than a small tax relief change.
                      Indeed, and they should be grateful for the majority Tory Govt that will help them go bust with those changes well before interest rate rises begin to bite hard

                      Originally posted by Waldorf View Post
                      this will have a much bigger impact than a small tax relief change.
                      How is it small if they suddenly have to start paying 40-45% income tax on received income? Rents will have to pretty much DOUBLE to pay for it. After that go up by another 50-75% to make up for interest rate increases.
                      Last edited by AtW; 9 January 2016, 16:11.

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