Scottish Parliamentary Elections Sweepstake

[Dominic]

Guess I'm in the squeezed middle then. Think I've said on here before, I'm happy to PAY a bit more tax. It's how it's SPENT I'm less convinced about.
)

I understand that sentiment... Right up to the point when I have to make a payment to HMRC.

[campbell]

Lol

[campbell]

Is that your professional stance, or personal!!

[mckeann]

Guess I'm in the squeezed middle then. Think I've said on here before, I'm happy to PAY a bit more tax. It's how it's SPENT I'm less convinced about.
)

I understand that sentiment... Right up to the point when I have to make a payment to HMRC.

aren't you both running your own businesses and enjoying all the associated tax scams that go along with that???? I'm not sure that makes you the squeezed middle

[pete]

Guess I'm in the squeezed middle then. Think I've said on here before, I'm happy to PAY a bit more tax. It's how it's SPENT I'm less convinced about.
)

I understand that sentiment... Right up to the point when I have to make a payment to HMRC.

aren't you both running your own businesses and enjoying all the associated tax scams that go along with that???? I'm not sure that makes you the squeezed middle

You and I are literally the only 2 people on this forum who actually pay about half our income to the government as we are unable to hide it. Everybody else pays, in real terms, about 14% and considers themselves hard done by.

[campbell]

Guess I'm in the squeezed middle then. Think I've said on here before, I'm happy to PAY a bit more tax. It's how it's SPENT I'm less convinced about.
)

I understand that sentiment... Right up to the point when I have to make a payment to HMRC.

aren't you both running your own businesses and enjoying all the associated tax scams that go along with that???? I'm not sure that makes you the squeezed middle

No scams here, my friend. Unhappy about that accusation actually, but c'est la vie.

[tut]

I presume most of us on here are on PAYE so have no say in the tax we pay, £10,600 allowance and pay tax on the rest, that is what my slip says.

tut

[pete]

I presume most of us on here are on PAYE so have no say in the tax we pay, £10,600 allowance and pay tax on the rest, that is what my slip says.

tut

3 of us then. there are LITERALLY three of us who are PAYE.








(Please don't tell me I actually need a smiley face to show that's a joke?)

[campbell]

You can be on PAYE and be taxed in quite a number of other ways. Not least VAT, fuel duty, Capital Gains, IHT, Corporation Tax, Stamp Duty.

Based on the purchase, sale, job or lifestyle choices you make, you actually have quite a big say in what you pay. In one sense.

[mckeann]

]

aren't you both running your own businesses and enjoying all the associated tax scams that go along with that???? I'm not sure that makes you the squeezed middle

No scams here, my friend. Unhappy about that accusation actually, but c'est la vie.

I don't mean scams per se, I mean using legal options to minimise your tax bill through your company that are unavailable to those of us on PAYE. No need to take offence, I'm not accusing you of anything illegal.

[campbell]

In which case, ta for clearing that up.

People make choices in their work and how they earn an income. Not sure if that's Capitalist but we're in a market economy and that's how it works.

I've seen both sides of employment and entrepreneurship, and I much prefer the latter. And not for financial reasons, I can assure you

If the chancellor wants to stop people avoiding tax, he needs to tighten the rules. And he is.

[Mikie711]

I'm not PAYE but I do have to complete a tax return every year and there is no escape for me. So on top of my tax bill I have accountant fees as well.
I think it should be a flat rate tax. You spend your entire working life trying to climb the ladder and when you get far enough up your tax goes through the roof. The US system is much better and I think promotes higher paid to stay in the country instead of driving them out.

[robin]

The difference between being paid PAYE and being paid via dividends (the primary tax efficiency mechanism of the small limited company) has narrowed to the point where the hassle of doing it is possibly no longer worth the return.

The dividend tax route is OK for people like Campbell and Dom because their businesses clearly provide a service to multiple customers, etc., and I would expect them to utilise it (it is none of my business whether or not they actually do, before anyone asks). I also believe that as well as being legal it is morally justifiable to pay less tax this way (they are taking more risk than an employee, they should be able to take more by way of return for that).

For anyone who is really an employee of another company, the shell company + dividend route carries the risk of HMRC deciding it's really just avoidance and taxing you on all your income using NIC/income tax scales. Whilst this approach might be legal, and many "get away" without the HMRC querying it, it is by my way of thinking harder to justify (they are taking no risk).

The routes that the >150K earners have for avoiding tax include SIPP where some of the assets are actually providing a benefit to the employee, arranging for your company to pay some part of your remuneration into something other than your bank account, possibly via a non-UK entity, etc. These mechanisms are all very dubious, but hard for the HMRC to unravel and often not worth the hassle.

Mike, it's your choice to use an accountant - you cannot blame the government for that one

The problem with a flat rate tax is that it is very unfair on the lowest paid workers - the US does not have a flat income tax rate, it is graduated at the federal level - it may be flat at the state level, but isn't always. In addition they have VAT (sales tax) and NIC (social security) similar to ours.

There is a flat rate system called AMT, but that's there as a mechanism to prevent exploitation of loopholes, I think - it says that in addition to paying the standard income taxes, you must pay the AMT, but that anything you pay in income taxes is allowed agains the AMT - but I don't really understand it, so may have gotten the wrong end of the stick there.

Cheers,
Robin

[thinfourth]

You and I are literally the only 2 people on this forum who actually pay about half our income to the government as we are unable to hide it. Everybody else pays, in real terms, about 14% and considers themselves hard done by.

What is it about nationalists and waving the victim card?



If you don't like that a minority on here are contractors then get off your butt and follow them

[thinfourth]

It's a balancing act - there is no "fair" scheme; increasing the top rate to 50% above 150K will clearly alienate high earners and they may well be mobile to the extent that they could relocate to England (and thus stick with the 45% rate); also as you push the thresholds higher, the number of earners in those brackets diminishes quickly, and these people are typically motivated to rearrange their income so as to avoid taxation (legally or otherwise).

So I don't know how much an aggressive super tax would actually raise.

Meanwhile you can reliably tax the PAYE brigade with little chance of them reorganising their affairs or leaving the system completely (the super wealthy can become residents of Monaco or Luxembourg or whatever works best for them). So it's always tempting to do that. Coupled with the reasonable desire to reduce the taxation burden on those earning the least it means that the tax burden on the middle has a habit of creeping up and that's roughly where we are.

I would be inclined to leave income tax roughly as it is were it me. I would look to more aggressive reorganisation of some of the peripheral taxes (NIC, VAT, fuel duty, etc.) Oh, and the elephant in the room, corporation tax for multi-nationals.

Cheers,
Robin

Ah but who actually pays under PAYE

It comes directly from my employer

Which is a vaguely irrelevant argument until you consider the following

All i care about is how much appears in my bank account each month

If the SNP bump up the tax i paid in the name of "fairness" then my wage packet goes down

I could move south of the border then a company in englandshire will have to pay out less to give me the same amount of cash

It will make it more expensive to employ people in the free workers democratic republic of sturgeonland


So when the nationalists start diddling with income tax they will drive more wealth south

Which is good as wealth moving south can be blamed on wastemonster