Just a restatement of the start of his AS, presumably in front of the Treasury Select committee today. What are they going to do though? Extend the PS changes for IR35 to the private sector? Reintroduce the 70s style apportionment rules? Increase the dividend tax? This isn't a new problem. It's been done to death. They can do what they want, of course, or many half-baked things at once, which seems to be their preferred approach, but sooner or later they'll find out whether the "flexible" workforce in the UK is worth anything in the post-Brexit world.
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UK should address workers forming companies to cut tax bill - Hammond
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Originally posted by jamesbrown View PostIncrease the dividend tax?
You've heard it on here first!!!
This will be achieved by treating dividends will be treated as income in appropriate income tax band, corp tax will be deemed as proxy version of NICs.Comment
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Originally posted by AtW View PostThere will abolish dividend taxation altogether!!!
You've heard it on here first!!!
This will be achieved by treating dividends will be treated as income in appropriate income tax band, corp tax will be deemed as proxy version of NICs.
In other words, apportionment (or "look through" in US-terminology). We've been here before Sure, they could do that, although CT wouldn't apply, by definition, as it applies to profit The EENI would be paid, as usual and, most likely, there wouldn't be ERNI, otherwise it wouldn't achieve the stated objective (similar tax treatment of different "self-employed" structures, including the sole trader). There would be no warchest within the company. See the recent review by the OTS of the various possibilities. Sure, they can do this. Whatever they do, I wish they'd just get on with it and stop pursuing all of the worst possible measures in combination (IR35, dividend tax etc.) They won't, of course; in a couple of years, we'll have an increase in dividend tax and the IR35 changes rolled out to the private sector.Comment
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Originally posted by jamesbrown View PostThere would be no warchest within the company.
There would be CT like now and if you don't distribute profits as dividends then there won't be any dividend tax on those who get the money, same as now.
If Trump gets CT down to 15% as he promised (which could be the only promise he actually keeps), then UK Govt will have to cut CT lower, maybe 10%, so it would make it easy thing for them to align dividend tax with income taxes in the name of "simplification" and "fairness".
I don't actually mind that, as long as those fookers take into account all taxes that business pays - PAYE, business rates, VAT, CT: all that should be deductable from taxes paid by shareholders, first by reducing CT and second by reducing effective dividend tax level. That would actually be fair and deal with whole range of tax "avoidance" schemes.Last edited by AtW; 12 December 2016, 21:34.Comment
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Makes for an interesting 2017 I bet. All contract income to be PAYE. Retained earnings to be forced out at PAYE rates. blah blah blahComment
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Originally posted by AtW View PostWhy?
There would be CT like now and if you don't distribute profits as dividends then there won't be any dividend tax on those who get the money, same as now.
If Trump gets CT down to 15% as he promised (which could be the only promise he actually keeps), then UK Govt will have to cut CT lower, maybe 10%, so it would make it easy thing for them to align dividend tax with income taxes in the name of "simplification" and "fairness".
I don't actually mind that, as long as those fookers take into account all taxes that business pays - PAYE, business rates, VAT, CT: all that should be deductable from taxes paid by shareholders, first by reducing CT and second by reducing effective dividend tax level. That would actually be fair and deal with whole range of tax "avoidance" schemes.Comment
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Originally posted by jamesbrown View PostSorry, I misread what you wrote, apparently. I thought you meant look-through. Nah, I can't see them doing that, because it doesn't achieve the forced distribution required, and hence money-boxing remains a "problem". It also introduces further complexity through different company law for (presumably) close companies. The apportionment rules were originally intended to prevent avoidance through capitalisation (i.e. transfer of income to capital). They're more likely to pick one of the OTS options off the shelf, some of which are already being explored further.
Am wondering if it's best for me to retire from contracting sooner rather than laterComment
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Originally posted by gixxer1k View Post
Yadayada independence employment rights flexibility...
Let us show them their place (brought to you by BigBodyShopUK)Comment
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To be fair, the part of the government's crackdown against "off payroll" working is hopefully to protect vulnerable workers who really should be employed by BigCo (with the usual benefits and employment rights) but are instead asked to become agency workers via umbrella companies. BigCo then insists on calling them 'independent contractors'
These poor people don't even know what's going on till they realise they have been duped and have no option.
The second category is the really 'high up' executives who hang on to cushy 'positions' for years and years until one fine day people find out they had been 'contractors' all these years... this is the real mockery of the system that makes us genuine contractors look badComment
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