The Next Conservative Budget
Discussion
jonah35 said:
Thanks for clarification.
It would be interesting to see some examples.
I think this might be somewhere close, although I'm sure Eric or others could clarify if not.It would be interesting to see some examples.
Example Single Person Ltd Co. T/O £60k taking tax free allowance as salary and dividends up to basic rate limit with some profit retained in business. Rough numbers
Pre budget
turnover £60,000
expenses £10,000
salary £10,000 (no tax)
profit £40,000
corp tax at 20% - £8000
dividend £30,000
tax on dividend £0
total tax take £8000
Post budget
turnover £60,000
expenses £10,000
salary £11,000 (no tax)
profit £39,000
corp tax at 18% - £7020
dividend £29,000
taxable dividend £24,000
tax on dividend at 7.5% - £1800
total tax take £8820
A couple of thoughts:
On Pre-Budget...the net divi is £32k, which you need to gross up to £35k to find that you've hit the higher rate threshold, so more tax due.
On Post-Budget...the divi is £32k (which added to the £10k salary is under standard rate - this bit needs clarifying), so 7.5% on £27k
Camoradi said:
I think this might be somewhere close, although I'm sure Eric or others could clarify if not.
Example Single Person Ltd Co. T/O £60k taking tax free allowance as salary and dividends up to basic rate limit with some profit retained in business. Rough numbers
Pre budget
turnover £60,000
expenses £10,000
salary £10,000 (no tax)
profit £40,000
corp tax at 20% - £8000
dividend £30,000
tax on dividend £0
total tax take £8000
Post budget
turnover £60,000
expenses £10,000
salary £11,000 (no tax)
profit £39,000
corp tax at 18% - £7020
dividend £29,000
taxable dividend £24,000
tax on dividend at 7.5% - £1800
total tax take £8820
Sounds rather rubbish if that's right.Example Single Person Ltd Co. T/O £60k taking tax free allowance as salary and dividends up to basic rate limit with some profit retained in business. Rough numbers
Pre budget
turnover £60,000
expenses £10,000
salary £10,000 (no tax)
profit £40,000
corp tax at 20% - £8000
dividend £30,000
tax on dividend £0
total tax take £8000
Post budget
turnover £60,000
expenses £10,000
salary £11,000 (no tax)
profit £39,000
corp tax at 18% - £7020
dividend £29,000
taxable dividend £24,000
tax on dividend at 7.5% - £1800
total tax take £8820
Zoon said:
Camoradi said:
I think this might be somewhere close, although I'm sure Eric or others could clarify if not.
Example Single Person Ltd Co. T/O £60k taking tax free allowance as salary and dividends up to basic rate limit with some profit retained in business. Rough numbers
Pre budget
turnover £60,000
expenses £10,000
salary £10,000 (no tax)
profit £40,000
corp tax at 20% - £8000
dividend £30,000
tax on dividend £0
total tax take £8000
Post budget
turnover £60,000
expenses £10,000
salary £11,000 (no tax)
profit £39,000
corp tax at 18% - £7020
dividend £29,000
taxable dividend £24,000
tax on dividend at 7.5% - £1800
total tax take £8820
Sounds rather rubbish if that's right.Example Single Person Ltd Co. T/O £60k taking tax free allowance as salary and dividends up to basic rate limit with some profit retained in business. Rough numbers
Pre budget
turnover £60,000
expenses £10,000
salary £10,000 (no tax)
profit £40,000
corp tax at 20% - £8000
dividend £30,000
tax on dividend £0
total tax take £8000
Post budget
turnover £60,000
expenses £10,000
salary £11,000 (no tax)
profit £39,000
corp tax at 18% - £7020
dividend £29,000
taxable dividend £24,000
tax on dividend at 7.5% - £1800
total tax take £8820
bobbylondonuk said:
Why?
Because they want to stop the poor scrounging and working the system, but don't want to stop working the system themselves. The tax man is catching up on the current loopholes, and their gravy train is looking a little worse for wear.That they're still £5k better off than they would be on PAYE and paying it all as salary doesn't compute. They're worse off now that their (legal) fiddle is being clamped down on, and that's all that matters.
Because we're all in it together means stopping the poor getting handouts, not stopping them avoiding paying.
Edited by Pegscratch on Wednesday 8th July 14:59
CaptainSlow said:
A couple of thoughts:
On Pre-Budget...the net divi is £32k, which you need to gross up to £35k to find that you've hit the higher rate threshold, so more tax due.
On Post-Budget...the divi is £32k (which added to the £10k salary is under standard rate - this bit needs clarifying), 5k tax free dividends so so 7.5% on £27k-5k = 22k
Edited as i understand itOn Pre-Budget...the net divi is £32k, which you need to gross up to £35k to find that you've hit the higher rate threshold, so more tax due.
On Post-Budget...the divi is £32k (which added to the £10k salary is under standard rate - this bit needs clarifying), 5k tax free dividends so so 7.5% on £27k-5k = 22k
He mentioned in the speech that the 10% Notional Tax Credit will be abolished.
Under the current system, a person who receives (say) a £10,000 dividend payment into their hand, is DEEMED to have received a Grossed Up dividend of £11,111.11 on which £1,111.11 tax has been deducted. It is the £11,111.11 amount that is used when working out the person's gross income for tax assessment purposes i.e. it's the Gross Dividend of £11,111.11 that will be added to their overall income to see if their income has exceeded the Higher Rate Tax threshold.
With the abolition of the 10% Notional Tax Credit, this grossing up exercise on dividends will not be required.
Under the current system, a person who receives (say) a £10,000 dividend payment into their hand, is DEEMED to have received a Grossed Up dividend of £11,111.11 on which £1,111.11 tax has been deducted. It is the £11,111.11 amount that is used when working out the person's gross income for tax assessment purposes i.e. it's the Gross Dividend of £11,111.11 that will be added to their overall income to see if their income has exceeded the Higher Rate Tax threshold.
With the abolition of the 10% Notional Tax Credit, this grossing up exercise on dividends will not be required.
Pegscratch said:
Because they want to stop the poor scrounging and working the system, but don't want to stop working the system themselves. The tax man is catching up on the current loopholes, and their gravy train is looking a little worse for wear.
That they're still £5k better off than they would be on PAYE and paying it all as salary doesn't compute. They're worse off now that their (legal) fiddle is being clamped down on, and that's all that matters.
Because we're all in it together means stopping the poor getting handouts, not stopping them avoiding paying.
That they're still £5k better off than they would be on PAYE and paying it all as salary doesn't compute. They're worse off now that their (legal) fiddle is being clamped down on, and that's all that matters.
Because we're all in it together means stopping the poor getting handouts, not stopping them avoiding paying.
Edited by Pegscratch on Wednesday 8th July 14:59
Bitter much at his failings? So I risk my house, my pension and my savings in order to run my business and create a lot of jobs and yet you resent the way I'm taxed?
Pegscratch said:
bobbylondonuk said:
Why?
Because they want to stop the poor scrounging and working the system, but don't want to stop working the system themselves. The tax man is catching up on the current loopholes, and their gravy train is looking a little worse for wear.That they're still £5k better off than they would be on PAYE and paying it all as salary doesn't compute. They're worse off now that their (legal) fiddle is being clamped down on, and that's all that matters.
Because we're all in it together means stopping the poor getting handouts, not stopping them avoiding paying.
Edited by Pegscratch on Wednesday 8th July 14:59
Overall a decent budget I thought
The planned cuts in departmental spending were curtailed, as they needed to be.
The combined affect of the minimum wage hike and welfare reductions is that the government will start to scale back on the state paying for a low wage economy and also paying for people's lifestyle choices.
The planned cuts in departmental spending were curtailed, as they needed to be.
The combined affect of the minimum wage hike and welfare reductions is that the government will start to scale back on the state paying for a low wage economy and also paying for people's lifestyle choices.
R8VXF said:
Still works out cheaper in year 2 and beyond than the highest rate currently. Think it was circa £450 inclusive of the premium tax
That's assuming you are paying the additional £310 for years 2-6 of ownership on top of the "average cost" of £140 though unless I am missing something. If your car costs over £40K and is in the "premium" band I assume you pay £310 on top of whatever the "premium" band is going to cost.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff