Tax Avoiders

[PeanutButter]

https://www.theguardian.com/world/commentisfree/2020/mar/27/tax-avoiders-coronavirus-bailouts

One of the first to seek a government bailout has been the cruise ship industry in the US. For decades, its ships have flown the colours of Panama, Liberia and other flags of convenience to skirt minimum wage laws as well as get out of paying taxes. Some companies have achieved corporate tax rates that even Google would envy.

In the UK, the airline industry quickly followed suit, with Virgin Atlantic, a company owned by a tax exile, writing to the government to say the entire industry may need support to the tune of £7.5bn. This letter came in the week that easyJet paid a dividend of £60m to its founder, Stelios Haji-Ioannou – tax resident in Monaco. Any support to the airline industry will no doubt flow through to aircraft leasing companies based in low-tax Ireland.

 

[Bluestone59]

At the other end of the business scale I notice that the assistance to be paid to the self employed is based on profits.

That will go down a storm with those guys who've made an art form out of loading the expenses of the enterprise so as to all but eliminate taxable profit.

Not that there was much in the way of  alternatives but not having thought about it I half expected they might get a flat £x per week. 

[PeanutButter]

4 minutes ago, Bluestone59 said:

At the other end of the business scale I notice that the assistance to be paid to the self employed is based on profits.

That will go down a storm with those guys who've made an art form out of loading the expenses of the enterprise so as to all but eliminate taxable profit.

Not that there was much in the way of  alternatives but not having thought about it I half expected they might get a flat £x per week. 

Yep, and all those years of rinsing the system (not paying alimony etc) coming back. 

Cash in hand not so grand.

[Confusion of VIs]

Can BTLrs holding their properties in a company claim.

[Confusion of VIs]

1 minute ago, PeanutButter said:

Yep, and all those years of rinsing the system (not paying alimony etc) coming back. 

Cash in hand not so grand.

Every cloud....

[mrtickle]

4 hours ago, Bluestone59 said:

At the other end of the business scale I notice that the assistance to be paid to the self employed is based on profits.

That will go down a storm with those guys who've made an art form out of loading the expenses of the enterprise so as to all but eliminate taxable profit.

Not that there was much in the way of  alternatives but not having thought about it I half expected they might get a flat £x per week. 

Yes, and of course with Section 24 in play, it's very pertinent. How interesting.

 

[Belfast Boy]

14 hours ago, PeanutButter said:

Yep, and all those years of rinsing the system (not paying alimony etc) coming back. 

I know of a partner in an accountancy firm who tells the CSA that his income is less than £100 a month. So he does not have to give his ex-wife anything to support his own children. 

I hope the weasel gets FA now.

Karma!

(Unlikely to be furloughed though)

Edited March 28, 2020 by Belfast Boy

[mattyboy1973]

14 hours ago, PeanutButter said:

Cash in hand not so grand.

I think we have to keep things in context. This is perhaps 3 months x a maximum of £2.5k (taxed), vs a lifetime of cash in hand work, or tax minimisation working through a PSC. Probably still a decent trade off.

[GregBowman]

2 hours ago, mattyboy1973 said:

I think we have to keep things in context. This is perhaps 3 months x a maximum of £2.5k (taxed), vs a lifetime of cash in hand work, or tax minimisation working through a PSC. Probably still a decent trade off.

I have no sympathy for the cash in hand brigade but that's not where the inequity is. A limited company would typically pay its directors a mixture of PAYE and dividends. In addition the scheme is only for companies with profits of less than £50k you have to show profits in excess of the dividends you take less corp tax obviously otherwise your making a loss - so the £50k is sweet fanny for hundreds of thousands of small to mid sized businesses that in reality create the majority of jobs in this country

If you are a £ 1 million+ business - you will be paying personal tax, VAT, Employers NI, Corp tax and if you reasonably profitable that will be a 6 figure sum a year. Year after Year. Collecting all that on behalf of the government and handing it over whether you had been paid or not.

If I have savings of over £16k a year I can't claim anyway and the scheme isn't even open - but if I had been on benefit all my life it would still be paid, If I was an average PAYE johnny I would get it no questions asked, if I was a one man band market trader and laid proper accounts I would get something

Yet for having the temerity to actually  build a business that gives youngsters skills, builds careers and contributes serious money to the economy your kicked in the teeth

The fairest way was to pay less than the £2.5 k (taxed) and put money straight into peoples bank accounts who are working checked by UTR reference, Tax return or company accounts all systems that are live and work well. You can even say Property Companies and investment companies aren't included because they will be registered as such 

Once everyone is actually unemployed because this can't go on for ever - who is going to create the jobs we will need after ?

Thats the context 

 

[neon tetra]

33 minutes ago, GregBowman said:

I have no sympathy for the cash in hand brigade but that's not where the inequity is.

This reply made me titter... 

[GregBowman]

1 minute ago, neon tetra said:

This reply made me titter... 

You have to laugh good find ?

[mattyboy1973]

46 minutes ago, GregBowman said:

The fairest way was to pay less than the £2.5 k (taxed) and put money straight into peoples bank accounts who are working checked by UTR reference, Tax return or company accounts all systems that are live and work well. You can even say Property Companies and investment companies aren't included because they will be registered as such 

Once everyone is actually unemployed because this can't go on for ever - who is going to create the jobs we will need after ?

Thats the context 

I agree completely. FWIW I also run a Ltd company, two man band selling software online. Also paid the dividend route since no accountant in the country is going to suggest you do otherwise - although the tax difference is not nearly as large as many people believe, given that divs come after corporation tax and tax free dividend allowance has all but been removed.

Orders are badly hit compared to this time last year, but can I honestly say it is entirely due to Covid19? Certainly some of it is. Should we furlough one member of staff and get 80% of the minimum wage PAYE? This route is apparently open to Ltd company owners, but you are not allowed to continue working if furloughed, and I need to keep working to make sure we are in a position to make some sales when/if the market starts up again. Not as big a company as yours by the sound of it, but 95% of our revenue come from abroad and all is spent here in tax or consumption, so a net gain to the UK and I also wouldn't mind some kind of support - but that is not looking likely.

[GregBowman]

3 minutes ago, mattyboy1973 said:

I agree completely. FWIW I also run a Ltd company, two man band selling software online. Also paid the dividend route since no accountant in the country is going to suggest you do otherwise - although the tax difference is not nearly as large as many people believe, given that divs come after corporation tax and tax free dividend allowance has all but been removed.

Orders are badly hit compared to this time last year, but can I honestly say it is entirely due to Covid19? Certainly some of it is. Should we furlough one member of staff and get 80% of the minimum wage PAYE? This route is apparently open to Ltd company owners, but you are not allowed to continue working if furloughed, and I need to keep working to make sure we are in a position to make some sales when/if the market starts up again. Not as big a company as yours by the sound of it, but 95% of our revenue come from abroad and all is spent here in tax or consumption, so a net gain to the UK and I also wouldn't mind some kind of support - but that is not looking likely.

Absolutely true re divi - Luckily sort of talking in past tense  re the company,  still exists but my business partner and I scaled down how holdings so my brother now owns just over 50% (we were equal before) we have 4 consultancy contracts between us, but were itching to get a 'real' business going like yours or our previous one the fact we were too busy swapping time for money seems quite fortunate now. It was about 14 months ago so would of been just scaling up now.

I am going through the furlough exercise with one of my clients and thats exactly the dilemma they are in.

We are used to being our own though aren't we ? My partner and I were laughing into our drinks...that his boy who is just getting qualified said why don't you pay yourselves a small salary plus divis ? Took it for the umpteenth time to the accountant and guess what.....?

Stay safe and good luck at least your an online biz, the market will come back 

 

[gadget]

Have to say i have little sympathy with the ltd company / dividend issue.

Directors pay themselves dividends rather than salary to avoid National Insurance. The point of National Insurance is to pay for / accrue these kind of benefits.

[dragging boot straps]

17 hours ago, GregBowman said:

Absolutely true re divi - Luckily sort of talking in past tense  re the company,  still exists but my business partner and I scaled down how holdings so my brother now owns just over 50% (we were equal before) we have 4 consultancy contracts between us, but were itching to get a 'real' business going like yours or our previous one the fact we were too busy swapping time for money seems quite fortunate now. It was about 14 months ago so would of been just scaling up now.

I am going through the furlough exercise with one of my clients and thats exactly the dilemma they are in.

We are used to being our own though aren't we ? My partner and I were laughing into our drinks...that his boy who is just getting qualified said why don't you pay yourselves a small salary plus divis ? Took it for the umpteenth time to the accountant and guess what.....?

Stay safe and good luck at least your an online biz, the market will come back 

 

Not surprised to see you caught with your hand in the jar again. You also got caught out by the loan charge scam didn't you? 

 

I've been much encouraged by the government getting savy with all these tax dodgers. Although I would still like to see the undeclared buy to let people crushed. 

[GregBowman]

1 hour ago, dragging boot straps said:

Not surprised to see you caught with your hand in the jar again. You also got caught out by the loan charge scam didn't you? 

 

I've been much encouraged by the government getting savy with all these tax dodgers. Although I would still like to see the undeclared buy to let people crushed. 

Everything you mention was legit at The time - limited companies go back nearly a thousand years to encourage risk taking without extreme loss the dividend arrangement reflects the risk 

You would like to see the undeclared crushed - don’t you think there is enough woe in the world ? Most people in the black economy are just trying to get by they aren’t builders avoiding £20k of vat 

Now run along and report a neighbour for exercising twice - people like you generally do ok in extreme emergencies not great after .......

Edited March 29, 2020 by GregBowman

[jiltedjen]

I am also very happy to see tax avoiders get stung. 

just wish there was more to catch the undeclared BTL’ers

in saying all of this, I’m not best pleased (being a PAYE slave) that the taxes I pay have been used to prop up house prices, so when I did buy instead of buying into a slump I bought almost at the peak (end of 2018), which easily added several years to my mortgage. 

[GregBowman]

2 hours ago, jiltedjen said:

I am also very happy to see tax avoiders get stung. 

just wish there was more to catch the undeclared BTL’ers

in saying all of this, I’m not best pleased (being a PAYE slave) that the taxes I pay have been used to prop up house prices, so when I did buy instead of buying into a slump I bought almost at the peak (end of 2018), which easily added several years to my mortgage. 

It’s your choice to be a ‘slave’ that’s the whole point of giving some sort of a  benefit to those risking everything to start their own thing - Of course as a PAYE slave you have access to support non slaves are denied athough in hundreds of thousands of cases we probably collect and pay more tax in a month than most people do in years. So we probably have the bragging rights on ‘not best pleased’

I guess you are also an advocate of arresting people in blue cars or fining people with red front doors since you are in favour of seeing  tax avoiders ‘stung’ tax avoidance is legal - tax evasion is not -  or is it just the legal activity of tax avoidance that gets your goat ? ?

[dougless]

1 hour ago, GregBowman said:

 -  or is it just the legal activity of tax avoidance that gets your goat ? ?

No, its smugness.

[GregBowman]

1 hour ago, dougless said:

No, its smugness.

Not being smug just saying it’s not ‘righteous or moral ‘ to get on your high horse about people paying less tax as a percentage ( no doubt in actual pound terms more in many cases) when you are complying with the laws of land 

Just comes across as sour envy 

It’s a way of structuring your life - including the taking the risk bit which is open to everyone 

Edited March 29, 2020 by GregBowman

[dugsbody]

3 hours ago, GregBowman said:

It’s your choice to be a ‘slave’ that’s the whole point of giving some sort of a  benefit to those risking everything to start their own thing

This has been done to death. Most contractors on LTD companies in London are not "risking everything to start their own thing". They sit at the desk next to me, do the same job as me and use the tax advantages of the LTD company to pay less tax.

Fine, it was legal, they were just optimising what the government allowed, but it irks me no end when people try to pretend it was something else.

[dougless]

2 hours ago, dugsbody said:

This has been done to death. Most contractors on LTD companies in London are not "risking everything to start their own thing". They sit at the desk next to me, do the same job as me and use the tax advantages of the LTD company to pay less tax.

Fine, it was legal, they were just optimising what the government allowed, but it irks me no end when people try to pretend it was something else.

Spot-on.

[GregBowman]

1 hour ago, dougless said:

Spot-on.

Or not.. the majority of limited companies are risk taking employers and even amongst the non employer companies I suspect only a few of your oh so hated IT contractors 

‘There were around 3.5 million sole proprietorships (69%) in the UK at the start of 2019, 405,000 partnerships (7%), and 2 million limited companies(34%). Out of the 2 million actively trading limited companies in the UK(2019), around 990,000 were employers, whereas 891,000 companies were not.10 Jan 2020‘

[dougless]

14 minutes ago, GregBowman said:

I suspect only a few of your oh so hated IT contractors

I don't hate them, I would just like a fairer distribution of tax.

[msi]

Taxation was dominated by the Right Wing 'Low Tax, Small Government, Wasteful Public Sector, Scrounger, Trickle down wealth creators' mantras.

It is now clear that while there is truth buried, it has gone too far to benefit too few.  We now need Big Government and Public services big enough to scale up when needed.  We see the public sector NHS providing more beds at lower cost than anything the private sector can do (the private beds released to the NHS are at an exorbitant 'cost' rate).  The scrounger myth is easy to spout when you point the finger at other groups - much harder when you are now getting 80% wages from the state.  The wealth creators are all right on their tropical island, but trickle down is now being shown to be nothing more than splash back.

BJ could reposition the Tories beyond the rabid right ERG and become a genuine centrist party, gutting Labour of any political Power (as those members would defect). That would guarantee him power for at least a generation.