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House Price Crash Forum


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Everything posted by bogbrush

  1. It's worse than that. Let's say you run your own business and make enough to pay yourself a million. Your business will then pay £138k employers NI, you pay £450k tax plus another £20k employees NI. In total you've handed £608k over. You took the risks (if it failed you'd not get your losses covered), you made the investments, didn't sleep for thinking about how to make it all work, and after all that you have to hand well over half to HMRC. Labour would have that back up to £658k. You don't want a medal or anyone to heap plaudits, you don't mind making a contribution but really, is it right that well over half the gain is taken away when the risks & losses were your own? Who wouldn't explore some legal options to manage that down?
  2. Envy is a destructive emotion. Makes you rationalise everything in terms of the evil of those whose success you covet. In really bad cases it turns you into a Socialist.
  3. The issue in the EU isn't austerity, it's the consequences of being in the Euro. Can you imagine how packed Greece would be with tourists if their currency was where it should be? We'd have people saying how great it is that you get get a good meal for £7.50. Austerity is fine, the State is crap at directing capital anyway so the less it does the better. The problem isn't the State doing less, it's that it holds back people from doing things for themselves.
  4. Because it's a wind up taking risks with your money, standing all the losses but handing over >half the winnings. Not all multi-millionaires are bankers or renters. Some do it by investing in creating economic value and standing to lose if they don't get it right.
  5. I guess they all went back for some pizza and a screening of V for Vendetta afterwards at the flat. And Brand was 'seen' there. Well of course he was, isn't that his job?
  6. As always the problem is the lack of alternatives to working for big employers. Guess who causes that?
  7. Two things; First, Millibands 'incentive is absurd - a company gets CT relief on the extra cost, so his big incentive is about 10% of the cost for one year. Second, and most importantly, all this does is raise the incentive to push for headcount reduction, or create even bigger advantages for established, higher tech firms over start up competition. I'm all for it paying to work, but artificially pushing up wage rates won't do it. Better to reduce living costs and lower welfare accordingly.
  8. That signal disappeared long before tuition fees, when idiot ideas like 50% in Uni and joke degrees became the currency.
  9. I sympathise with this, but really let's be complete and say that Osborne, Dave, Ed, Nick, Harriet & Ed and almost everyone hasn't worked. It's quite staggering how little any of them truly know about how to gain useful employment or create anything. There are a few who've worked, but not many. Those that have tend - in my unscienticifc mental checklist - to have slightly sensible ideas.
  10. I had a look at the link, that corresponds to my understanding; If a higher rate payer, then you end up paying 36.1% net of the credit. The balance is the fact that the outgoings aren't allowable for CT deduction, so attract a marginal hit on the gross of whatever CT is. If we say 24% is that rate then that inflates to 26.7% (because the company has to declare a dividend 10/9ths of what you receive, which creates the 10% credit) then we're back at 62.8%. I think! Then we start adding the Stamp Duty on the nice house, the forthcoming "Mansion Tax" (was there ever a label better designed to appeal to crowds with pitchforks and torches?) and we're back where I started the thread. But all this is wrong of course because BNS says I can't add up.
  11. If I were doing it again, no idea. Really, I spend all my time trying to make the thing work so never really look at the other garden. If there's nowhere better - and that might be the case - then so be it. I suppose all that's happening now is that I'm coming to the conclusion that there's not much point carrying on the hassle if this is the result of success (I never had to worry about this back in the day, it was a case of "what profit" sometimes!). I suppose I may leave it to savvy guys like BNS to do it better, and sort the tax by splitting it with their kids or something
  12. Normally I'd ignore this but it's intriguing. Why don't we put some bigger numbers in so you don't think about inappropriate analogies; Assume we're not talking about a sole trader (I never said that, did I?). Assume also a business employing a good few hundred people making quite a lot of profit (certainly above £5m for this purpose), and an intention to pay oneself a sum of money commensurate with that performance. Assume all that is on top of a salary that already exhausts all allowances and bands. How well are your solutions applicable to this scenario? And yes, though this isn't my personal scenario I'm pretty good at running a business.
  13. Ah, if only it were true that it was either-or; I have yet to hear any high profile proponent suggest that. Personally I am sympathetic to the idea of compensating my fellows for the exclusive use of land which none of us created, and I think it would have many favourable effects to taxing wealth creation, but the State has an abject record in declining ways to take more money off us, and neither do I see any sign of the "mob" calling for such restructuring, just calls to take more to spend on "services". I'm sorry if the account made you emotional but the purpose was less to inspire sympathy and more to point out that the way the country is financed more or less makes it pointless to risk all to make good money without careful planning. It's less a case of tax planning being an option, more the only alternative to pretty much paying over the vast majority of your profits. Or at least this is how it increasingly feels to me; in my own position I am afraid that I must be prepared to pay as I outlined, I genuinely am not like a smart-arsed comedian lecturing everyone else whilst living on "loans" from offshore Trusts. In fact the only option that looks good to me is entrepeneurs relief, meaning I sell up. A great pity.
  14. Yes, that's similar to what I thought. A 5% difference hardly invalidates the original point does it? (not that I think you were, that was others). Where has BNS gone anyway, I thought we were finally starting to communicate but he seems to have disappeared?
  15. Let's be civil and discuss the numbers, no need to be angry (is there?); 1. There is Employees and Employers NI; if you are both then "you" are paying both. Do we agree? 2. I understated the rate of Ni, that just makes the point stronger. 3. Easy to go ltd, but not much point. Let me explain; If you pay a big number out as divi then you pay, net, 36.1% personal tax when you receive them. The business cannot allow this expense against profit which mean it forgoes the CT relief it would otherwise have got on a salary expense which is roughly worth 24%. The combined effect is c60%, similar to the total cost of paying salary. Yes, "the person" could be limited but how does he buy the house? You can't just run a company like that as your personal funds, that way lies tax evasion and jail. As I said, not much difference. As I also say, if there's a much easier way then please shout but I don't believe so, certainly not when the example is all about a business scale with numbers to lead to buying a Mansion taxed house over £2m.
  16. To those who say my understanding/maths are wrong, I respectfully disagree. Certainly Killer bunny's interpretation is very wrong, tax on dividends is far more than 10% at high numbers (which is what this example is predicated on). Firstly, it's not so easy to "go ltd" and take dividends; dividends in the hands of the shareholder are taxed and crucially on top of that, dividends can only be paid out of after-taxed profit, meaning the cost cannot be offset against profits, so there's a CT penalty versus salary to consider. Overall there isn't a lot of difference, which doubtless is as intended. If anyone has the obvious leap to freedom there then please say so, but it really doesn't exist. To those questioning my mixing company and person, well if you run your own business that's reality. If the business didn't have to pay the NI then it would have more to pay out, so of course it is all borne by the recipient (this is also true of all employees, who would have better chances of getting hold of that money if their employer didn't have to hand it over to the government). And finally to those who got the point, that ultimately in this situation, and adding in transaction and putative wealth tapping taxes on property, yeah it's really feels a bit flattening. Especially since when the risks were being taken the plan was that 100% of the failure was going to be be borne by the business owner; the State wasn't going to come in with 75% to help out.
  17. I suppose at some point there'll be a move to Mansion tax or whatever, because after all "they can afford it", but I thought it worth taking a look at the current tax position if you run a business, make money and intend to buy a big house from it. You make some profit, and let's assume you do it by taking risks with your capital, applying some great ideas and hard work. You're not a banker, or some other modern demon, just someone who built a factory and made things to sell, and did it really well. If it was done from scratch it probably took most of your life and for a good proportion of that you deferred consumption to worjk and invest, had plenty of sleepless nights when things weren't going right and generally put a lot in and things have worked out. You have to pay that profit out to yourself in order to be able to buy this big place, so it's a lot of money and taxed at the top rate. Because you own your business all the tax is "on you", so; PAYE & NI 51% Employers NI 12.9% Total 63.9% Ok, so you go off with the 36.1% of the profit you created and buy a really big house. Super. The Stamp Duty on the really nice house (well actually it didn't have to be massive, just >£400k, but anyway..) is 4%, so as that's 4% of the 36.1%, it's 2.1% of the original profit. So we're up to 66%, meaning the current regime taxed two-thirds of wealth created income, if applied to buying a house of any scale. So if we have a Mansion Tax or whatever on a big house that'll probably see the tax take over an extended period top 70% easily, maybe up to 75% or so. You don't like, but don't count, the local government tax because you reckon you are getting some services for that. You accept that's close to being annual fees for annual services. But the proposed Mansion tax is different, because that's for central government who you thought you were settling your account with on income and transaction taxes. ----------------------- At what point does this guy become a public sector employee?
  18. Spot on. Of course she does. She wants more of your stuff to build something she likes. The rest is just positioning.
  19. YES. All this "govt spend= growth" crap does my head in. Only real people making stuff to swap can create growth.
  20. I have no problem at all with people exploiting their position of strength to gain. Why shouldn't they? The only thing is that I'm consistent on that front, so when there's no Olympics, and the job would be attractive to many thousands of others, I see no moral issue with the employer telling them it no longer suits him to have those guys and he gets some others. It's just freedom to make and refuse offers, nothing immoral happening in either scenario.
  21. Consume someone else's, like perhaps getting your kids to pay for them.
  22. There is no invisible hand to blame. Reckless consumption of wealth that didn't exist, driven by the ability to vote in people to give you stuff. Run or a few decades, but kicked on like mental in th last 15 or so. Because we're worth it.
  23. Carr is just a hypocrite, but then that's pretty much guaranteed for anyone gobbing off as he did. When the State set a regime that tells a businessman who has made money through risking his own capital that if he pays any of it out to himself c65%* of it will be taken in tax and when any objection is shouted down by him being grouped with "Bankers bonuses" then it's no surprise people look closely at the rules. The issue is one of presumption of ownership. If our income is presumed to be ours, and we are asked to contribute some to the general good in return for advantages ourselves, then most people will see the deal - but when it's taken in ever increasing amounts for no reason other than "you can afford it", the deal breaks down and I don't see why anyone would feel it wasn't a competition between themselves and the state for access to their income. * Income Tax when at 50%, plus employees NI plus employers NI
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