Budget 2021. What 1 change would you make?

[Lord Tyrion]

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

It is not as clear cut as that. He may pay less tax, no NI on dividends for example, 20% on profits. However he will pay extra when he does self assesment as dividends are taken into account. Now, there are ways to push the boundaries if you are that way inclined but personally I like to sleep well at nights so I don't go close to those. Unless he is playing fast and loose he will inevitably pay tax. He may pay less than if he was simply paying himself a salary but he will pay tax. There is sometimes a bit of apendage waving going on in those conversations, I'd take it with a pinch of salt.

 

[road2ruin]

It is not as clear cut as that. He may pay less tax, no NI on dividends for example, 20% on profits. However he will pay extra when he does self assesment as dividends are taken into account. Now, there are ways to push the boundaries if you are that way inclined but personally I like to sleep well at nights so I don't go close to those. Unless he is playing fast and loose he will inevitably pay tax. He may pay less than if he was simply paying himself a salary but he will pay tax. There is sometimes a bit of apendage waving going on in those conversations, I'd take it with a pinch of salt.

I pay myself and my wife pretty much the minimum and then we take the rest out in dividends, I've spoken to our accountant on numerous occasions about it and whilst it's still advantageous to do it this way, with the recent increase in tax on dividends the difference between someone earning the same as me on a PAYE basis isn't as much as some would like to believe!

 

[GB72]

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.

It will from April. My wife was a contractor and moved back into full employment last year based on the impact IR35 was going to have. Basically it becomes more likely that companies will have to class contractors as employees unless hired for a very defined job for a defined period. What you had before were some people who had been contracted to the same company in the same role for years and were employees in everything but name.

The issue during furlough was in relation to contractors who had, often at the insistence of companies or recommendation of accountants, as limited companies and so paid themselves a minimum salary and the balance by a company dividend rather than people taking cash in hand. This is perfectly legal and acceptable but meant any furlough payments were based on the salary not the dividend. Think my wife got £400 a month for her 4 months of furlough.

 

[road2ruin]

It will from April. My wife was a contractor and moved back into full employment last year based on the impact IR35 was going to have. Basically it becomes more likely that companies will have to class contractors as employees unless hired for a very defined job for a defined period. What you had before were some people who had been contracted to the same company in the same role for years and were employees in everything but name.

The issue during furlough was in relation to contractors who had, often at the insistence of companies or recommendation of accountants, as limited companies and so paid themselves a minimum salary and the balance by a company dividend rather than people taking cash in hand. This is perfectly legal and acceptable but meant any furlough payments were based on the salary not the dividend. Think my wife got £400 a month for her 4 months of furlough.

We've taken the view that ours are the latter as we bring them in for specific projects and they have a time limit. We may not use them for another 6 months or they might go into another project straight away, it just depends on our clients and the geographical nature of the work.

 

[Hobbit]

The black economy needs addressing. My mate does cash in hand jobs at least 50% of the time. Some of them are not small jobs. Recently he did a job that came in at £110k, the large portion of which was staged payments and cash in hand. I’ve never ever seen £20k in cash before and I doubt I ever will again. That happens every year and has been happening for at least the last 25 years.

Its not just the Amazons of this world that are ripping us all off.

 

[Deleted member 18588]

The black economy needs addressing. My mate does cash in hand jobs at least 50% of the time. Some of them are not small jobs. Recently he did a job that came in at £110k, the large portion of which was staged payments and cash in hand. I’ve never ever seen £20k in cash before and I doubt I ever will again. That happens every year and has been happening for at least the last 25 years.

Its not just the Amazons of this world that are ripping us all off.

Agreed.

We have just had various works done on our house and garden with contractors being paid from over £7000 to £400 and without exception were asked if we could pay all or part in cash.

We refused to do so.

 

[GB72]

We've taken the view that ours are the latter as we bring them in for specific projects and they have a time limit. We may not use them for another 6 months or they might go into another project straight away, it just depends on our clients and the geographical nature of the work.

Your contractors are dealt with correctly under IR35. My wife was contracted for health and safety work but it was general roles over an extended period sometimes. The problem she found is that a lot of companies did not want to get to grips with the new rules and so were simply phasing out using contractors.

 

[GreiginFife]

It will from April. My wife was a contractor and moved back into full employment last year based on the impact IR35 was going to have. Basically it becomes more likely that companies will have to class contractors as employees unless hired for a very defined job for a defined period. What you had before were some people who had been contracted to the same company in the same role for years and were employees in everything but name.

The issue during furlough was in relation to contractors who had, often at the insistence of companies or recommendation of accountants, as limited companies and so paid themselves a minimum salary and the balance by a company dividend rather than people taking cash in hand. This is perfectly legal and acceptable but meant any furlough payments were based on the salary not the dividend. Think my wife got £400 a month for her 4 months of furlough.

So these employees in everything but name, they got all the same employee perks I assume?
Holiday pay, sick pay, pension, healthcare if applicable, rewards schemes...

 

[GB72]

So these employees in everything but name, they got all the same employee perks I assume?
Holiday pay, sick pay, pension, healthcare if applicable, rewards schemes...

Nope, absolutely none of that. I guess I meant their roles were that attributable to a full time employee but not the benefits. I am fully in support of contractors, my wife hated giving it up but the market was drying up with companies worried about the new rules.

 

[GreiginFife]

Nope, absolutely none of that. I guess I meant their roles were that attributable to a full time employee but not the benefits. I am fully in support of contractors, my wife hated giving it up but the market was drying up with companies worried about the new rules.

Full time employment is more than just the role thats done.
The short sightedness of the rules while the big globals pay miniscule % of whats due, its nuts.
Easier to go after the small guy though.

 

[GB72]

Full time employment is more than just the role thats done.
The short sightedness of the rules while the big globals pay miniscule % of whats due, its nuts.
Easier to go after the small guy though.

Totally agree, new rules are very unfair and target a section of employment that has set up in a way that suits companies (especially those with limits on heads on payroll) and contractors.

 

[SocketRocket]

The black economy needs addressing. My mate does cash in hand jobs at least 50% of the time. Some of them are not small jobs. Recently he did a job that came in at £110k, the large portion of which was staged payments and cash in hand. I’ve never ever seen £20k in cash before and I doubt I ever will again. That happens every year and has been happening for at least the last 25 years.

Its not just the Amazons of this world that are ripping us all off.

Most people I have known who are self employed in building and plumbing always seem to have large rolls of spondulas on them.

 

[Crazyface]

I would sit down with all the clever accountants and get them to tell me ALL the current loopholes in the system that businesses and rich people use to get out of paying the right amount of tax, and then shut them all down IMMEDIATELY !

 

[Dando]

I would sit down with all the clever accountants and get them to tell me ALL the current loopholes in the system that businesses and rich people use to get out of paying the right amount of tax, and then shut them all down IMMEDIATELY !

one of my clients was one of the biggest providers of tax mitigation schemes - its scary what they could do with someone else's money so they paid the absolute minimum in tax

 

[3offTheTee]

Come on lads, I was hoping to keep this calm, collected and perhaps considered, which is why I said “1” change to the budget. There has to be no explaining of ones choice needed

I did exactly what you said BM. 5 words only and 4 people agreed. Can I have a reduction in handicap please!!

 

[SwingsitlikeHogan]

Universal Credit: ‘Bake-in’ the current temporary £20/week supplement, and implement a £500/month work allowance (threshold on earnings allowable) before UC tapering kicks in. £500/month is equivalent to the £6000 in savings an individual is permited to have before UC to be paid is impacted.

 

[Deleted Member 1156]

Universal Credit: ‘Bake-in’ the current temporary £20/week, and implement a £500/month work allowance (threshold on earnings allowable) before UC tapering kicks in. £500/month is equivalent to the £6000 in savings an individual is permited to have before UC to be paid is impacted.

I thought the UC savings threshold is 16000? That's what I was told when I tried to sign on after being made redundant.

 

[SwingsitlikeHogan]

I thought the UC savings threshold is 16000? That's what I was told when I tried to sign on after being made redundant.

UC tapering kicks in at £6k savings, with the level of UC provided reducing up to the £16k threshold above which you don’t qualify for any UC. Looking at it the other way. If you have more than £16k savings you do not qualify for UC. If you have £6k or less your UC entitlement is not impacted.

 

[Deleted Member 1156]

UC tapering kicks in at £6k savings, with the level of UC provided reducing up to the £16k threshold above which you don’t qualify for any UC. Looking at it the other way. If you have more than £16k savings you do not qualify for UC. If you have £6k or less your UC entitlement is not impacted.

That makes sense, ta ?

 

[Deleted member 1147]

Increase capital gains tax rates