All taxation stifles growth as people have less money to spend but the government has to get it's money from somewhere especially when running a £100b deficit.
I agree with this too. but we do need to, you know, collect tax.
and i'd prefer to raise the income threshold to around £12,000 than raise the 40p threshold. so unfortunately, until we sort out spending and pay of the deficit, 40p has to stay where it is.
Hey, as someone who went through an IR35 investigation I need no convincing about how poor that guidance is. What I found most incredible is that HMRC spent three years wasting their time and mine going over my client list, written agreements, working practices etc. when it should have been clear within a couple of hours from my doing work for up to 5 companies simultaneously that I operate as a genuine freelance business and not as a disguised employee. Think of how much money that investigation wasted, multiply by the numbers of investigations per annum, and you get a large admin cost that could be eliminated..
3 years! You got away lightly some investigations have lasted 7 years and more. I'm a cynic when it comes to IR35, which is why I gave up a lot of time to campaign against it. At the time it was introduced I heard the BigCo consultancies complained (poor little dears) that they could not compete against the independents. I don't think it is co-incidence that at a time one of the big consultancies was close to the party in government - that tax laws were introduced to help them.
If you ask me there was a perfectly good way of closing this 'loophole' - that is for the tax authorities to prove the worker was an employee (which has since been proven to the case) - of course they kept getting beaten in the commissioners and they did not like that - introducing IR35 helped the BigCo consultancies, and moved the burden of this proof to the taxpayer - that was what it was about, nothing to do with closing loopholes.
I know but someone earning £40k p.a. has been paying less income tax since this government came to power which makes the comments of Mr de Bois and the DM story rather pointless.
I know but someone earning £40k p.a. has been paying less income tax since this government came to power which makes the comments of Mr de Bois and the DM story rather pointless.
not really.
they are saying the threshold for the 40p rate should be higher than it currently is.
So is claiming benefits but that doesn't stop some spitting their bile at those that do.
I wasn't saying I thought it should be legal necessarily in all forms. VAT has some interesting loopholes too, some of which I'd close.
But whilst it is, and the poster I replied to said they were managing it, I thought it was worth asking how - and not for my benefit as I don't pay tax at that rate. ;-)
do you disagree that the 40p tax rate stifles growth?
I'm not sure I do.
I think that people in general strive to better themselves and be successful, both in terms of starting a business or in an employed career. I have never met a single person yet who has turned down a promotion and associated pay rise because they would move into a higher tax bracket.
I do think that if people earning nearly double the national average wage are struggling because of the amount of tax taken there is a major cost of living issue though, the answer, of course, is to deal with housing costs, which is the real culprit if most money issues in this country, it eats up far too much of peoples wages AND government expenditure.
Every other month something else gets blamed for people not having enough money, tax, energy bills, fuel, but the primary expense for everyone is the roof over their heads, and until we address that the rest window dressing.
Hey, as someone who went through an IR35 investigation I need no convincing about how poor that guidance is. What I found most incredible is that HMRC spent three years wasting their time and mine going over my client list, written agreements, working practices etc. when it should have been clear within a couple of hours from my doing work for up to 5 companies simultaneously that I operate as a genuine freelance business and not as a disguised employee. Think of how much money that investigation wasted, multiply by the numbers of investigations per annum, and you get a large admin cost that could be eliminated.
I am not sure that working for multiple companies would convince them you are not an employee, what counts is verifying the nature of the relationship in each case? That's my understanding from those freelancers I have come across.
That is incorrect as NI rate thresholds don't correspond to income rate bands. The 12% NI rate is payable on earnings above the NI primary threshold, the 2% NI rate applies to all earnings above the NI upper earnings limit.
Well yes, but for most employees they are the effective tax rates faced when earning extra income (apart from a very small gap at the higher rate band).
All taxation stifles growth as people have less money to spend but the government has to get it's money from somewhere especially when running a £100b deficit.
Taxation doesn't necessarily stifle aspiration though -- if the alternative to high tax is bigger bills, the net "stifling effect" could be zero or even negative, depending on the efficiency of the services provided.
I think that people in general strive to better themselves and be successful, both in terms of starting a business or in an employed career. I have never met a single person yet who has turned down a promotion and associated pay rise because they would move into a higher tax bracket.
Well of course they do, 60% of some extra money is better than 0% of it but that wasn't the point being made.
I do think that if people earning nearly double the national average wage are struggling because of the amount of tax taken there is a major cost of living issue though, the answer, of course, is to deal with housing costs, which is the real culprit if most money issues in this country, it eats up far too much of peoples wages AND government expenditure.
Every other month something else gets blamed for people not having enough money, tax, energy bills, fuel, but the primary expense for everyone is the roof over their heads, and until we address that the rest window dressing.
I agree housing costs and other rising costs such as energy are also very important factors.
I think that people in general strive to better themselves and be successful, both in terms of starting a business or in an employed career. I have never met a single person yet who has turned down a promotion and associated pay rise because they would move into a higher tax bracket.
I do think that if people earning nearly double the national average wage are struggling because of the amount of tax taken there is a major cost of living issue though, the answer, of course, is to deal with housing costs, which is the real culprit if most money issues in this country, it eats up far too much of peoples wages AND government expenditure.
Every other month something else gets blamed for people not having enough money, tax, energy bills, fuel, but the primary expense for everyone is the roof over their heads, and until we address that the rest window dressing.
it's not about that. it's not about struggling. in the short to medium term it's about will i do that overtime, or take on that extra responsibility and work that much harder, spend less time with my kids when half the extra goes to the government.
I am not sure that working for multiple companies would convince them you are not an employee, what counts is verifying the nature of the relationship in each case? That's my understanding from those freelancers I have come across.
And there, as far as I'm concerned, is the big problem with IR35. As well as clients that I've being doing work for over the course of years with informal agreements I have a rotation of one-off jobs going on. The actual number of my clients over the period they were investigating ran into dozens. So you have to wonder at what point any one man band company like mine can be considered a genuine business according to the inspectors?
It shouldn't have taken three years to come to the conclusion they eventually came to, that there was no case for me to answer to.
Taxation doesn't necessarily stifle aspiration though -- if the alternative to high tax is bigger bills, the net "stifling effect" could be zero or even negative, depending on the efficiency of the services provided.
how does that work? - people who pay top rate tax are net contributors so how would they get bigger bills?
how does that work? - people who pay top rate tax are net contributors so how would they get bigger bills?
I'd have thought it was obvious. Taxation is payment for essential services provided by the State -- if the State stops providing the services people will have to pay for them privately.
People who are high earners are net contributors -- many people who are just about in the 40% tax bracket aren't, such as those with school-age children -- and the people who would be affected to any measurable degree by a move in the tax thresholds would be those who are only earning marginally over the current threshold.
People who are earning £100,000 a year probably wouldn't even notice a move up in the threshold.
I am not sure that working for multiple companies would convince them you are not an employee, what counts is verifying the nature of the relationship in each case? That's my understanding from those freelancers I have come across.
The situation is a log greyer than that (part of my campaigning against it was to collect a lot of case law - far more than this engineer - as in not a lawyer should have to).
IR35 is judged on a case by case basis. Each contract is considered on it's own BUT there is a concept known as the 'In business on your own account' test - which basically says that if the contract is entered to into as part of running your own business - then that is what it is a business contract (contract for service) rather than employment (contract of service).
That is not the worst example when it comes to IR35.
Another problem is a concept known as privity of contract - in normal contract law you cannot be forced to comply with a contract you have not agreed to, nor seen. Except in the case of IR35 - because most freelancers do not see the agency/client contract, did not agree the terms of it (or in some cases the terms are the opposite of what they agreed) and yet it determines there tax bill.
I'd have thought it was obvious. Taxation is payment for essential services provided by the State -- if the State stops providing the services people will have to pay for them privately.
That depends on whether you believe all the services provided by the state are essential. It also assumes their provision by the state is more effective and efficient than if such services were provided privately.
I remember a previous poster (whose username escapes me) with whom I had one or two narky debates.
This poster had exactly the same pantomime right-wing views as you do.
This poster also had exactly the same tax arrangements.
Very common way of avoiding tax, he would hardly be unique or right-wing in doing that.
It is probably the most commonly used tax avoidance scheme there is.
I'd have thought it was obvious. Taxation is payment for essential services provided by the State -- if the State stops providing the services people will have to pay for them privately.
People who are high earners are net contributors -- many people who are just about in the 40% tax bracket aren't, such as those with school-age children -- and the people who would be affected to any measurable degree by a move in the tax thresholds would be those who are only earning marginally over the current threshold.
People who are earning £100,000 a year probably wouldn't even notice a move up in the threshold.
I think the failings in efficiency of the state, as well as the poor management have to come into the equation.
That depends on whether you believe all the services provided by the state are essential. It also assumes their provision by the state is more effective and efficient than if such services were provided privately.
If you read my previous comment, I was making no such assumption of efficiency -- merely questioning the counter claim that the State is less efficient, which is equally open to debate.
I think the failings in efficiency of the state, as well as the poor management have to come into the equation.
Unfortunately if we privatise functions of the state the only way we'll see any financial saving is if we hand the contract to foreign companies. The British are absolutely wonderful at creating stuff, but we cannot manage for toffee.
That depends on whether you believe all the services provided by the state are essential. It also assumes their provision by the state is more effective and efficient than if such services were provided privately.
This is almost always the case when it comes to service provision, especially when you factor in all criteria, such as customer satisfaction and the working conditions of those providing the service.
I'd have thought it was obvious. Taxation is payment for essential services provided by the State -- if the State stops providing the services people will have to pay for them privately.
Well that is a massive leap of faith by you in that it assumes that services provided by the State are always necessary and cheaper - I would love to see the evidence to support that idea.
Comments
I'm not disagreeing with you.
3 years! You got away lightly
If you ask me there was a perfectly good way of closing this 'loophole' - that is for the tax authorities to prove the worker was an employee (which has since been proven to the case) - of course they kept getting beaten in the commissioners and they did not like that - introducing IR35 helped the BigCo consultancies, and moved the burden of this proof to the taxpayer - that was what it was about, nothing to do with closing loopholes.
I know but someone earning £40k p.a. has been paying less income tax since this government came to power which makes the comments of Mr de Bois and the DM story rather pointless.
not really.
they are saying the threshold for the 40p rate should be higher than it currently is.
I wasn't saying I thought it should be legal necessarily in all forms. VAT has some interesting loopholes too, some of which I'd close.
But whilst it is, and the poster I replied to said they were managing it, I thought it was worth asking how - and not for my benefit as I don't pay tax at that rate. ;-)
I'm not sure I do.
I think that people in general strive to better themselves and be successful, both in terms of starting a business or in an employed career. I have never met a single person yet who has turned down a promotion and associated pay rise because they would move into a higher tax bracket.
I do think that if people earning nearly double the national average wage are struggling because of the amount of tax taken there is a major cost of living issue though, the answer, of course, is to deal with housing costs, which is the real culprit if most money issues in this country, it eats up far too much of peoples wages AND government expenditure.
Every other month something else gets blamed for people not having enough money, tax, energy bills, fuel, but the primary expense for everyone is the roof over their heads, and until we address that the rest window dressing.
I am not sure that working for multiple companies would convince them you are not an employee, what counts is verifying the nature of the relationship in each case? That's my understanding from those freelancers I have come across.
Well yes, but for most employees they are the effective tax rates faced when earning extra income (apart from a very small gap at the higher rate band).
Taxation doesn't necessarily stifle aspiration though -- if the alternative to high tax is bigger bills, the net "stifling effect" could be zero or even negative, depending on the efficiency of the services provided.
Well of course they do, 60% of some extra money is better than 0% of it but that wasn't the point being made.
I agree housing costs and other rising costs such as energy are also very important factors.
it's not about that. it's not about struggling. in the short to medium term it's about will i do that overtime, or take on that extra responsibility and work that much harder, spend less time with my kids when half the extra goes to the government.
It shouldn't have taken three years to come to the conclusion they eventually came to, that there was no case for me to answer to.
I remember a previous poster (whose username escapes me) with whom I had one or two narky debates.
This poster had exactly the same pantomime right-wing views as you do.
This poster also had exactly the same tax arrangements.
how does that work? - people who pay top rate tax are net contributors so how would they get bigger bills?
I'd have thought it was obvious. Taxation is payment for essential services provided by the State -- if the State stops providing the services people will have to pay for them privately.
People who are high earners are net contributors -- many people who are just about in the 40% tax bracket aren't, such as those with school-age children -- and the people who would be affected to any measurable degree by a move in the tax thresholds would be those who are only earning marginally over the current threshold.
People who are earning £100,000 a year probably wouldn't even notice a move up in the threshold.
Benefits are not "earned". Why not learn the difference?
The situation is a log greyer than that (part of my campaigning against it was to collect a lot of case law - far more than this engineer - as in not a lawyer should have to).
IR35 is judged on a case by case basis. Each contract is considered on it's own BUT there is a concept known as the 'In business on your own account' test - which basically says that if the contract is entered to into as part of running your own business - then that is what it is a business contract (contract for service) rather than employment (contract of service).
That is not the worst example when it comes to IR35.
Another problem is a concept known as privity of contract - in normal contract law you cannot be forced to comply with a contract you have not agreed to, nor seen. Except in the case of IR35 - because most freelancers do not see the agency/client contract, did not agree the terms of it (or in some cases the terms are the opposite of what they agreed) and yet it determines there tax bill.
That depends on whether you believe all the services provided by the state are essential. It also assumes their provision by the state is more effective and efficient than if such services were provided privately.
Very common way of avoiding tax, he would hardly be unique or right-wing in doing that.
It is probably the most commonly used tax avoidance scheme there is.
I think the failings in efficiency of the state, as well as the poor management have to come into the equation.
If you read my previous comment, I was making no such assumption of efficiency -- merely questioning the counter claim that the State is less efficient, which is equally open to debate.
It's a common way to reduce liability across the self-employed sector. What is right-wing about that?
This is almost always the case when it comes to service provision, especially when you factor in all criteria, such as customer satisfaction and the working conditions of those providing the service.
Well that is a massive leap of faith by you in that it assumes that services provided by the State are always necessary and cheaper - I would love to see the evidence to support that idea.