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View Full Version : Tax Free Riches + The End of New Labour



hugebrain
13th June 2005, 18:52
Most of the genuine contractors on this board probably have a hundred grand or so kicking about in their limited companies waiting for a rainy day. Also, you probably haven't saved much of a pension.

OK. Here's the plan...

Come April 7th, we will be able put up to 225 grand in a tax-free pension.

What if we all raise our salaries to 225K that year, invest it as a SIPP in foreign shares/property?

That year all our companies make a loss. Labour's tax receipts turn negative. The British economy is utterly destroyed, the government falls. At a single stroke we rid ourselves of our oppressors and ensure ourselves a comfortable old age.

Who's with me?

DimPrawn
13th June 2005, 18:54
Not me mate. I'll be sitting by my pool sipping a cool beer and staring out to the med thinking of all you poor sods paying for Blairs dream Britain. :rollin

dotnetted
13th June 2005, 18:56
what are going to be doing in the med dimprawn? Are you hanging up your .net gloves?

DimPrawn
13th June 2005, 19:04
I've got enough wonga and property here to live a *basic* life at my villa without working, but intend to setup some sort of business once I'm out there. Not sure if it will Internet related or more traditional tourism based. Maybe flog timeshares to dozy Brits or ship cheapie foreign IT workers into Britain to work on <toot-toot> public sector IT projects. Who knows. Who cares.


Main thing is you can keep Blairs dream. I'm not paying for it anymore, .NET or no bloody .NET

Mr UK Bean
13th June 2005, 19:13
Using SIPP to invest in property is throwing money down the drain, Property has had it’s boom and sorry to say, it’s on the bust.

See www.citywire.co.uk/News/N...onID=74965 (http://www.citywire.co.uk/News/NewsArticle.aspx?VersionID=74965)

Before you all jump down my throat

hugebrain
13th June 2005, 19:15
>> thinking of all you poor sods paying for Blairs dream Britain

Err, We won't be paying for Blair's dream, that's the whole point of the scheme. We can claim back this year's corporation tax and next year we pay no income tax or corporation tax at all.

With all the money we save we can join you by the Med

hugebrain
13th June 2005, 19:22
That article is about UK prices.

Obviously they may go down a bit when my cunning plan destroys the British economy. That's why I specified that the SIPP should be used to buy foreign assets.

Now that I've straightened out the minor quibbles - is everybody with me?

DimPrawn
13th June 2005, 19:24
Explain it in detail for the hard of thinking.

hugebrain
13th June 2005, 19:43
>> Explain it in detail for the hard of thinking.

This year we pay a low salary + dividends as normal and retain plenty of money in the limited company. Next year we pay a salary of 225,000 and invest it all in a pension.

The company makes a loss next year so we have no tax to pay plus can claim back the corporation tax for this year.

(You might want to run this past an accountant before trying it but I don't see why it wouldn't work). Also avoids that nasty dividend tax that makes it hard to withdraw any money in the company that directors had saved for their old age.

DimPrawn
13th June 2005, 19:47
Any accountant types wish to comment?

So we have the limited company pay a one off special bonus in the form of a pension contribution to our personal pension? Or are you saying we take £225K salary (which would attract employers NI)?

Can a company go insolvent to pay a bonus? All seems a bit unlikely to me?

Mr UK Bean
13th June 2005, 19:50
What goes boom usually goes bust

Think self certs, think Enron

3.5 X income was once used as a guide to the average price of a house in the UK but that average price now stands at over £180k

Just because interest rates half it does not mean you can afford to spend double on a property because for one you need to pay the capital back and a precursor for low interest rates is low inflation so if today a £1000 is a lot of money then in ten years time it will still be a lot of money which is totally different to when inflation was rampant.

DimPrawn
13th June 2005, 19:55
Thanks Mr Bean but what's that got to do with HB's plan to topple the government or the price of fish?

Mr UK Bean
13th June 2005, 20:10
SIPP's is what Brown is using to try and stop prices crashing

IR35 Avoider
13th June 2005, 22:10
From the company tax point of view, paying a salary or the company making a contribution to our personal pension are treated the same way, i.e. fully deductible, so rather than increase salary just make a pension contribution, and avoid the employers NI on salary.

I have about 75K in company and from next year intend to pay myself a 5K salary, top up with dividends from savings and put most of any new earnings into pension (thereby disposing of any IR35 liablility that comes with the new earnings.)

hugebrain
14th June 2005, 00:26
So Avoider says I can dodge National Insurance and any threat of IR35 as well. This scheme just gets better and better. Can we avoid the 13.5% VAT as well somehow?

Beany, just buy gold commodities or shares with yours and stop stressing about houses.

Only one worry now. Why are they being so nice to us?

Who was it that said that if it seems too good to be true, then it aint true?

SupremeSpod
14th June 2005, 08:32
Well, it'll increase the pension funds that El Brownio can raid for a start...
(Think nationalised pension scheme...)

BTW, All UK pension providers have to produce a report for the treasury detailing peoples national insurance numbers and value of their fund every year...

Now why do you think they need that....?

Spod.