Budget 2021. What 1 change would you make?

[Beezerk]

Ah see 40% tax or not if there overtime going at weekends count me in lol gets me out the house atm!!!

However our weekends are 12 hours and our standard nights are 10 hours so does make it more attractive

Wow ?
I'm getting too old for this weekend working malarky anyway, I'd rather be working on my awful golf game ?

 

[Beezerk]

Come down hard on the tax avoiding large multinational companies. If Amazon, Starbucks etc were given the option of pay full UK tax or get out the country I'm pretty sure they would stump up.

How do you feel about also clamping down on the self employed who seem to be excellent at avoiding paying tax?

 

[fundy]

If its only 1 change then its the biggest one possible. Scrap the whole tax system and start again. The current one is not close to being fit for purpose and making lots of little changes every year just makes it worse, creates more loopholes and legal challenges from people way smarter than the government to exploit

 

[Deleted member 21784]

Wow ?
I'm getting too old for this weekend working malarky anyway, I'd rather be working on my awful golf game ?

It's not labour intensive , computer based .. yes when it's busy it's horrible but if it's running fine then just got to monitor

 

[Deleted member 21784]

If its only 1 change then its the biggest one possible. Scrap the whole tax system and start again. The current one is not close to being fit for purpose and making lots of little changes every year just makes it worse, creates more loopholes and legal challenges from people way smarter than the government to exploit

Sometimes you wonder if that is actually best .. sometimes building something from ground up rather than bolting things onto an old system would actually be better all round .

Like you say .. build new one

Could get one ready and then say right Jan 2022 we move to this

 

[Deleted Member 1156]

How do you feel about also clamping down on the self employed who seem to be excellent at avoiding paying tax?

I think that issue has been partially addressed by the furlough scheme. Seems quite a few trades people have not been able to claim as much in furlough payments as they thought because they weren't declaring their full earnings. But by doing cheaper 'cash jobs' they are saving the public money anyway, if they declare everything then we end up paying more for our house repairs, improvements and so on.

 

[Deleted member 21784]

I think that issue has been partially addressed by the furlough scheme. Seems quite a few trades people have not been able to claim as much in furlough payments as they thought because they weren't declaring their full earnings. But by doing cheaper 'cash jobs' they are saving the public money anyway, if they declare everything then we end up paying more for our house repairs, improvements and so on.

Isn't it also coming with this new tax thing their having to do from this year or something

Ir35 think it is

 

[Deleted Member 1156]

Isn't it also coming with this new tax thing their having to do from this year or something

Ir35 think it is

I'm not sure but I know that IR35 came in years ago when I was contracting. My accountant at the time advised me to pay myself minimum wage then take company dividends which attracted 20% tax rate. I believe that was all stopped some years ago.

 

[road2ruin]

Isn't it also coming with this new tax thing their having to do from this year or something

Ir35 think it is

Not claiming to be an expert in it however it's something that I've had to look into due to my role of using external suppliers and IR35 doesn't apply (at this point) to small businesses so it's not going to affect the self employed who are contracting out.

 

[Ethan]

I think this is a good time for the world to consider how their economies are structured. The idea that the national budget was like a current account was popular in recent times, even though anybody with any sense knew that is not how national budgets work. The US has a national debt of more than $20 trillion, the UK a debt of £2 trillion. These debts will never, ever, ever be paid off, nor is there any need to even pretend they may be.

If the Govt seriously wanted to revive the economy, they would give more money to working people. The average citizen doesn't salt off their money into the Caymans or invest it in a trust, they spend it at Tesco, where it pays staff who then spend their wages and so on, with the Govt picking up income tax and VAT at each step. The money recirculates around the economy. The Govt could also invest in infrastructure, improving healthcare, education. They could waive college fees and encourage people to get a good education, which is a massive investment in human capital.

Instead, they are going to rinse the better off working class and middle class again. That pisses me off a lot. I am a contractor, and Covid significantly reduced the number and value of contracts in my sector because a lot of companies paused their clinical trials. I lost a fair bit of money as a result. I didn't take a penny of Sunak's money in exchange. But now I will be paying greater corporation tax, income tax and having my pension savings shrunk again, and the IR35 changes will squeeze my take home. Meanwhile Serco and all the other companies who got massive overpaid contracts for doing a terrible, or no, job, get away with all their money, the NHS staff get nothing, or in the case of senior nurses and doctors, have their pensions further squeezed, and the Daily Mail gets to complain about it all the time while their non-dom proprietor gets to hide his money away from the taxman.

 

[road2ruin]

How do you feel about also clamping down on the self employed who seem to be excellent at avoiding paying tax?

Going after that audience is an easy win but how much tax would you actually make? Ensuring that the large multinationals pay a sensible amount of tax would be a game changer in terms of the amount that HMRC would receive but they would be up against a battery of lawyers and the fact that, at this point, these companies aren't doing anything wrong (legally anyway).

 

[road2ruin]

Remove inheritance tax

This was to be my contribution to the thread, should be removed completely IMO.

 

[Ethan]

I'm not sure but I know that IR35 came in years ago when I was contracting. My accountant at the time advised me to pay myself minimum wage then take company dividends which attracted 20% tax rate. I believe that was all stopped some years ago.

It wasn't stopped. At the strat of April, the hiring companies take over the decision on who is inside or outside.

A contractor gets paid gross, often through a recruitment company, then the money goes to the contractor's limited company, and after expenses are deducted, they pay corporation tax at 19%. Most people take a salary up to the National Insurance trigger, then take some more as dividends, and income tax is due on the total of the two. It allows companies flexibility and reduces their costs since they don't pay NI and other employer costs. The contractor can get a larger income, but has no benefits, so must self-fund or forego. Contracts often have shorter notice periods too, so security is not so good.

There is no point using a limited company under IR35. It just increases costs, you may as well be a permanent employee. Many of us on such contracts are waiting to see whether the company will improve their terms to balance IR35 effects, or we may terminate contracts. I am considering moving contract to a EU based company outside IR35 where the rate is better and I can still use the limited company.

 

[Beezerk]

I'm not sure but I know that IR35 came in years ago when I was contracting. My accountant at the time advised me to pay myself minimum wage then take company dividends which attracted 20% tax rate. I believe that was all stopped some years ago.

The lad I worked with last week runs his own business, well saying that he's a one man band going around repairing machines.
He said he was going to change his company so he pays himself dividends rather than a wage, somehow make zero profit and pay zero tax, there was also some fiddle involving his wife who is a teacher and nothing to do with his business.
Just didn't sit right with me ?

 

[Ethan]

The lad I worked with last week runs his own business, well saying that he's a one man band going around repairing machines.
He said he was going to change his company so he pays himself dividends rather than a wage, somehow make zero profit and pay zero tax, there was also some fiddle involving his wife who is a teacher and nothing to do with his business.
Just didn't sit right with me ?

If he is outside IR35, then he should be fine. Most contractors already pay themselves mostly as dividends, but that comes out of profits. If he has a legal way of doing so and paying zero tax. I'd love to know it. He can make a generous employers contribution to pension, and he can have his wife as company secretary and pay her a wage or dividends too.

 

[Deleted Member 1156]

It wasn't stopped. At the strat of April, the hiring companies take over the decision on who is inside or outside.

A contractor gets paid gross, often through a recruitment company, then the money goes to the contractor's limited company, and after expenses are deducted, they pay corporation tax at 19%. Most people take a salary up to the National Insurance trigger, then take some more as dividends, and income tax is due on the total of the two. It allows companies flexibility and reduces their costs since they don't pay NI and other employer costs. The contractor can get a larger income, but has no benefits, so must self-fund or forego. Contracts often have shorter notice periods too, so security is not so good.

There is no point using a limited company under IR35. It just increases costs, you may as well be a permanent employee. Many of us on such contracts are waiting to see whether the company will improve their terms to balance IR35 effects, or we may terminate contracts. I am considering moving contract to a EU based company outside IR35 where the rate is better and I can still use the limited company.

Like I said, it was some years ago (1999-2000) when I was last contracting and things have changed.

 

[Imurg]

If its only 1 change then its the biggest one possible. Scrap the whole tax system and start again. The current one is not close to being fit for purpose and making lots of little changes every year just makes it worse, creates more loopholes and legal challenges from people way smarter than the government to exploit

If they're going to start a whole new system can whoever defines what tax avoidance is also define what a divot is..

 

[fundy]

If they're going to start a whole new system can whoever defines what tax avoidance is also define what a divot is..

one of those is far more straightforward than the other

 

[Beezerk]

If he is outside IR35, then he should be fine. Most contractors already pay themselves mostly as dividends, but that comes out of profits. If he has a legal way of doing so and paying zero tax. I'd love to know it. He can make a generous employers contribution to pension, and he can have his wife as company secretary and pay her a wage or dividends too.

I didn't really go into the details with him, he seemed pretty confident he wouldn't be paying any tax though.

 

[Deleted member 16999]

If they're going to start a whole new system can whoever defines what tax avoidance is also define what a divot is..

I’m happy to go with the HMRC definition as they’d be the ones enforcing it:

“Tax avoidance involves bending the rules of the tax system to gain a tax advantage that Parliament never intended.

It often involves contrived, artificial transactions that serve little or no purpose other than to produce this advantage. It involves operating within the letter, but not the spirit, of the law.”