"we're all in this together"

[eFestivals]

Give me a more complicated scenario then, I can cope.

My income is X amount.

I pay NI and tax on only a proportion of it (and I'm not using the tax & NI free allowances to achieve that - I'm excluding those parts in what I'm saying).

And I'm not even a higher rate tax payer.

If you don't know how I manage that (I know others here do) then you're in no position to be telling others their statements about tax are wrong, because you don't know even the most basic stuff.

I'm not going to fess up here how I do what I do (even tho it's not illegal or even remotely dodgy). I certainly won't defend it as right, because it's very definitely not right.

It does, however, allow efestivals to keep trading when otherwise it just couldn't.

[Gre]

It's far more than just the simple scenario you insist on sticking to.

The UK tax regs is 10,000 pages.

[paddydog]

My income is X amount.

I pay NI and tax on only a proportion of it (and I'm not using the tax & NI free allowances to achieve that - I'm excluding those parts in what I'm saying).

And I'm not even a higher rate tax payer.

If you don't know how I manage that (I know others here do) then you're in no position to be telling others their statements about tax are wrong, because you don't know even the most basic stuff.

I'm not going to fess up here how I do what I do (even tho it's not illegal or even remotely dodgy). I certainly won't defend it as right, because it's very definitely not right.

It does, however, allow efestivals to keep trading when otherwise it just couldn't.

[eFestivals]

I'm genuinely interested at how this 'higher % of income as tax' is worked out... almost no-one earning say £50-£100k regularly pays capital gains tax, so I'll ignore that.

While I'd guess the numbers are relatively small for people exploiting CGT, I'd also guess that your clients aren't average clients. I know a fair few people who lessen the tax they pay using CGT, and most probably don't hit the £100k level.

So what you're looking at is;

- Dividends; basically owners of small companies are paying a lower rate of tax on these, but that's distorted because the company will have paid corporation tax on the profit at some point.

not just small businesses.

And corp tax works out cheaper.

There's more registered businesses in this country than there are people paying tax. That's no coincidence.

- VAT/petrol/alcohol duty etc; Basically the 'rich' must be a smaller %age of their income on VATable etc items than the 'poor'... I wouldn't even know where to start working that one out.

there's almost endless scope around this - while not necessarily legal, stuff around VAT accounts for a huge amount.

BTW, VAT isn't something I take the piss with. I do stick within the rules.

Neil - when you say 'Income' in the above post, do you mean turnover or Profit before/after tax? I'm assuming one of the latter?

by income, I mean all money that is coming to me in one way or another before any of it is taxed.

Edited October 13, 2010 by eFestivals

[Gre]

If you're evading tax at any level (which I think is what you're implying), that is illegal. We both know that. I would consider editing the post to remove that tacit admission.

Edited October 13, 2010 by Gre

[eFestivals]

If you're evading tax at any level (which I think is what you're implying), that is illegal. We both know that. I would consider editing the post to remove that tacit admission.

I'm doing zero that is illegal. All tax that is due from me is paid.

(mind you, I did just get the tax man to write off £7,500 in fines, which made me happy ).

Saying "you're in no position to be telling others their statements about tax are wrong, because you don't know even the most basic stuff" is nonsense though. I responded directly to a comment you made that suggested "the average % tax paid by those in the higher tax brackets (earning £44k+ a year) actually pay a lower proportion of their wages in tax than those on the standard tax bracket". This is not true and I backed up my response with some simple maths. There is nothing more "basic" than that.

It is true.

You don't have a clue about the tax system, that's where your error is.

[paddydog]

I'm doing zero that is illegal. All tax that is due from me is paid.

(mind you, I did just get the tax man to write off £7,500 in fines, which made me happy ).

It is true.

You don't have a clue about the tax system, that's where your error is.

Edited October 13, 2010 by paddydog

[eFestivals]

Neil man, read what I say. I very clearly said that you were on about right wing ideology rather than conservative ideology. The conservatives haven't been conservative for eons. Didn't Cameron try on the face of it to change that recently with the whole rejection of the 1922 committee?

the 1922 committee is controlled by the oiks. He didn't want the oiks interfering, nowt more to it.

[eFestivals]

I'm prepared to let the facts speak for themselves. I showed that someone earing £20K pays less tax proportionally than someone earning £50K. You said the opposite. By that definition I "have a clue". Your last comment is wrong.

keep on believing that you're correct if you want to. You're not.

Perhaps ask Gre, as he's the accountant around here.

[paddydog]

keep on believing that you're correct if you want to. You're not.

Perhaps ask Gre, as he's the accountant around here.

Edited October 13, 2010 by paddydog

[eFestivals]

I'm a qualified accountant. Have been for 12 years.

Gre> are my sums right? I can post the workings if you like?

f**k me, do your clients know how little you know?

I pay much less tax on my income than I would do if I put all that income thru under the terms where it would be classed as income that's taxable under the income tax and NI regimes. And as I say, I'm not even a higher rate tax payer.

The advantages are much greater for those who are higher rate taxpayers.

PS - I didn't even need to ask an accountant about how to do it. It's such public knowledge to most people (tho perhaps not accountants of 12 years ) that most people who'd need to know do know.

Edited October 13, 2010 by eFestivals

[paddydog]

f**k me, do your clients know how little you know?

I pay much less tax on my income than I would do if I put all that income thru under the terms where it would be classed as income that's taxable under the income tax and NI regimes. And as I say, I'm not even a higher rate tax payer.

The advantages are much greater for those who are higher rate taxpayers.

PS - I didn't even need to ask an accountant about how to do it. It's such public knowledge to most people (tho perhaps not accountants of 12 years ) that most people who'd need to know do know.

Edited October 13, 2010 by paddydog

[Gre]

While I'd guess the numbers are relatively small for people exploiting CGT, I'd also guess that your clients aren't average clients. I know a fair few people who lessen the tax they pay using CGT, and most probably don't hit the £100k level.

Edited October 13, 2010 by Gre

[gratedenini]

Bugger me--I`m out of this... think I`ll pop back to see another Chilean pop out... and I`ve got me Tablet to consider....

den

[dakyras]

No every rich person owns a business Neil, so to say that 'rich people pay a smaller proportion of tax from their income' is really just something out of your own personal experience.

[eFestivals]

Are my sums right or wrong? I said nothing about your personal position.

I've not bothered to look at them. You posted them in response to what I'd said, for which they have zero relevance.

The fact that you posted them irrelevantly, while anyone else who knows how these things are done would have immediately had ideas of how (and know it's nothing to do with paying income tax & NI), very strongly suggests to me that you're no accountant, or if you are you don't ever do individual's tax returns.

[Gre]

I'm a qualified accountant. Have been for 12 years.

Gre> are my sums right? I can post the workings if you like?

Edited October 13, 2010 by Gre

[Pogues Mcgogues]

Can't think of where else to post this...

Has anyone been, or is anyone, on here a member of Advance the Trade Union?

If you have could you pm me and let me know, I need to ask a few general questions. Cheers.

[eFestivals]

Lessen the tax they pay using CGT... would that be some kind of asset-shifting scheme? Dodgy at best if so.

All completely legal (including passed an IR investigation in at least 2 cases).

By small companies I meant by the legal definition - up to £5.6m turnover etc.

ahhh, my apologies.

But that turnover limit is easily work-aroundable too.

Really? A quick google reveals there were 2.1 million enterprises registered for VAT and/or PAYE in March 2010, and somewhere around 26-30 million taxpayers depending on source. That's an awful lot of businees with either no employees and tiny turnover.

A misunderstanding by you in what I said. I said "There's more registered businesses in this country than there are people paying tax".

Firstly, you have the number of people eligible to pay tax, and not taxpayers.

And it's of course the case that they wouldn't be registered for PAYE when they exist to channel money away from the PAYE regime.

And the number I quoted does include the 'dormant' enterprises too - but they of course came to exist for a good reason, with that reason often being tax avoidance. Incomes aren't always static.

I wouldn't dare accusing you of doing something illegal tax-wise.

and I don't.

Are you talking about business owners here? Obviously there's very little employees can do to avoid VAT.

Yup - tho there's plenty of vat avoidance for employees that goes on with the connivance of employers too. It's a win-win.

That doesn't really answer the question... is that they money coming to you personally, or to your company? Obviously the company is going to be able to deduct the company expenses before you get your personal income to be taxed

It's money that is coming to me personally (but not all thru the PAYE regime). What ends up in my pocket is all my income.

(just to be clear, the company money is of course all accounted for separately from me as company money, so not mine).

[eFestivals]

No every rich person owns a business Neil, so to say that 'rich people pay a smaller proportion of tax from their income' is really just something out of your own personal experience.

Nope, not all of them do.

But it's feck all to do with my experience, and everything to do with the govts own figures.

So it must clearly be the case that those who are not gaining anything because all of their income goes thru the PAYE regime are more than accounted for by others who have their income come to them via other tax regimes (perhaps as well as the PAYE regime).

[paddydog]

I've not bothered to look at them. You posted them in response to what I'd said, for which they have zero relevance.

The fact that you posted them irrelevantly, while anyone else who knows how these things are done would have immediately had ideas of how (and know it's nothing to do with paying income tax & NI), very strongly suggests to me that you're no accountant, or if you are you don't ever do individual's tax returns.

[dakyras]

Nope, not all of them do.

But it's feck all to do with my experience, and everything to do with the govts own figures.

So it must clearly be the case that those who are not gaining anything because all of their income goes thru the PAYE regime are more than accounted for by others who have their income come to them via other tax regimes (perhaps as well as the PAYE regime).

[paddydog]

Although I have been qualified about 11years 10 1/2 months less than you

[Gre]

All completely legal (including passed an IR investigation in at least 2 cases).

[eFestivals]

You made an explicit claim which was wrong. I refuted it and provided evidence. That's all.

there was nothing at all wrong with my claim. Your error is only in how you took it to mean. You took it to mean something that it did not explicitly said.

Most people don't own or operate businesses - even those that pay tax in the highest bands (Gre comments backed up this claim, and you seems prepared to belived him/her). Running a business or oprating as a sole trader will always give rise to the option of offsetting business income with allowable expenses - to reduce taxable profit.

Yes I know. That's no part of anything I've said (tho of course that exact thing comes with its own fiddles which are used to a lesser or greater extent by just about every business).

But When (if) you make a profit, or earn income, you have to pay income tax on it. The more profit you make or income you draw, the proportion of tax you pay grows. It is a failrly simple concept to grasp.

But as I keep saying to you, it's 100% wrong. You're definitely not an accountant, things don't get more basic than this.

Only the income a person receives for (best description I could think of) "work done" is what is taxable under the income tax and NI regime.

Income from other sources - such as (the two most common) company dividends, and capital gains - operate to a completely different set of rules.

It's exceedingly easy for certain people to manipulate things so that what would otherwise come to them as normal income for "work done" to channel that money in other directions so that it's treated as income from something other than "work done", and so taxed differently.