Shorfall In Tax Take Looming

[turbobloke]

edh said:

turbobloke said:

edh said:

...and are "encouraged" to do so by DWP with the threat of sanctions..

So it's just like people on zero hours contracts, who are forced to take the job? Only this time it's the self-employed and an axis of compulsion involving employers and the DWP. Scales are falling from eyes across PH.

The only thing is, nobody is forced to take any job, and nobody is forced to become self-employed, both are entirely matters of choice.

OK - Job centre person says - you have a car or drivers licence? Ok then you can become a self employed taxi driver / delivery driver etc.. There is a vacancy here.. Refuse the "opportunity" to work for £2-£3 an hour and you get sanctioned. That means everything stops, JSA, HB, CTR, everything.

Sure you have a choice...

Firstly, others can make up sob stories with numbers to suit. You just type it in and bingo, there it is. Even half a story will do.

Self-employed persons have choice over working hours, so the earnings are variable and not fixed in any band as you appear to imply, and the total earned can be more than reasonable.

Secondly, moving away from fiction - and as a matter of principle - if there are jobs that people refuse, who gives the taxpayer a choice about shelling out for longer? Your posts suggest belief in the Socialist Money Tree.

[Claudia Skies]

plasticpig said:

The tax take per liter has fallen by about 5p.

Guess what the new government's first step will be, irrespective of which party gets elected in May?

Mansion tax is pure comedy - best described as a South of England Tax. Likely to be met with calls for "independence for the South East" and further partition of UK.

[Magog]

turbobloke said:

So it's just like people on zero hours contracts, who are forced to take the job? Only this time it's the self-employed and an axis of compulsion involving employers and the DWP. Scales are falling from eyes across PH.

The only thing is, nobody is forced to take any job, and nobody is forced to become self-employed, both are entirely matters of choice.

Even so there are other features in common. Where the self-employed earn less money, work more hours, and suffer more stress than employees, they still report greater overall job satisfaction (Pew Research Centre report on Social & Demographic Trends). How can this be so, with these poor coerced victims.

Strangely enough those on zero hours contracts report higher levels of overall job satisfaction than the average employee (CIPD report: Zero Hours Contracts, Myth and Reality). This report also showed that 18% of businesses pay hourly rates for zero hours staff that are higher than permanent employees compared to 11% that are lower. There's nothing in there about armies of bosses unlawfully paying below NMW.

Looking forward to the next instalment of poor bloody infantry doggerel.

Edited by turbobloke on Wednesday 28th January 09:51

Whilst there is no doubt some element of exploitation by some employers that wasn't the point I was trying to make.

By forcing people into poorly remunerated self employed work, whether genuinely self employed or not the government can massage the employment figures significantly. There is a real risk to the tax take and spending levels though in promoting people to engage in unproductive activity, which generates little or no profit and therefore isn't taxable in order to allow them to access in work benefits. Pushing people towards non genuine self employment, where there status should be that of an employee also allows for all sorts of creative practices that ultimately hit the governments bottom line in terms of tax take and NICs.

[turbobloke]

Magog said:

turbobloke said:

So it's just like people on zero hours contracts, who are forced to take the job? Only this time it's the self-employed and an axis of compulsion involving employers and the DWP. Scales are falling from eyes across PH.

The only thing is, nobody is forced to take any job, and nobody is forced to become self-employed, both are entirely matters of choice.

Even so there are other features in common. Where the self-employed earn less money, work more hours, and suffer more stress than employees, they still report greater overall job satisfaction (Pew Research Centre report on Social & Demographic Trends). How can this be so, with these poor coerced victims.

Strangely enough those on zero hours contracts report higher levels of overall job satisfaction than the average employee (CIPD report: Zero Hours Contracts, Myth and Reality). This report also showed that 18% of businesses pay hourly rates for zero hours staff that are higher than permanent employees compared to 11% that are lower. There's nothing in there about armies of bosses unlawfully paying below NMW.

Looking forward to the next instalment of poor bloody infantry doggerel.

Whilst there is no doubt some element of exploitation by some employers that wasn't the point I was trying to make.

By forcing people into poorly remunerated self employed work...

With respect, that misses the point of fact I made, which is that nobody is forced to take work either zero hours or self-employment. It's a choice. If your point is to indicate the limited choices that some people may have, then it's their responsibility and not that of taxpayers to increase employability via e.g. free training (which I already linked to in this or a similar thread) as this will increase choices, increase employability, thereby increasing the chances of employment and of better pay.

The government of the day will always massage the employment figures. The key thing is not to focus on government data manipulation but self-improvement (where somebody considers their lot to be not a lot).

Criticing government spin from e.g. a well-paid job seems like the better option to me.

[Magog]

turbobloke said:

With respect, that misses the point of fact I made, which is that nobody is forced to take work either zero hours or self-employment. It's a choice. If your point is to indicate the limited choices that some people may have, then it's their responsibility and not that of taxpayers to increase employability via e.g. free training (which I already linked to in this or a similar thread) as this will increase choices, increase employability, thereby increasing the chances of employment and of better pay.

The government of the day will always massage the employment figures. The key thing is not to focus on government data manipulation but self-improvement (where somebody considers their lot to be not a lot).

Criticing government spin from e.g. a well-paid job seems like the better option to me.

Well nobody is forced into it that's true, but the system is structured in such a way that if you find yourself unemployed you could well be better off running a loss making business rather than claiming jobseekers allowance. It's the modern equivalent of paying people to dig holes and paying other people to fill them in. It's an issue for all taxpayers and society if people are claiming in work benefits, working, and not doing something productive or revenue generating. Of course personal responsibility is an important element of it, but people can only exercise their personal responsibility with regards to work and income within the boundaries of the tax and benefits system as it exists.

[turbobloke]

Magog said:

turbobloke said:

With respect, that misses the point of fact I made, which is that nobody is forced to take work either zero hours or self-employment. It's a choice. If your point is to indicate the limited choices that some people may have, then it's their responsibility and not that of taxpayers to increase employability via e.g. free training (which I already linked to in this or a similar thread) as this will increase choices, increase employability, thereby increasing the chances of employment and of better pay.

The government of the day will always massage the employment figures. The key thing is not to focus on government data manipulation but self-improvement (where somebody considers their lot to be not a lot).

Criticising government spin from e.g. a well-paid job seems like the better option to me.

Well nobody is forced into it that's true, but the system is structured in such a way that if you find yourself unemployed you could well be better off running a loss making business rather than claiming jobseekers allowance.

Do you mean a loss-making business, or one providing an adequate but less than average income? A business that's established, with reserves, can survive making a loss. A start-up will soon wrap up. Anyway, as before, a limited choice signals a low level of employability, not big bad bosses or evil job centres and certainly not wicked taxpayers who have been funding excessive levels of largesse for years.

Magog said:

It's the modern equivalent of paying people to dig holes and paying other people to fill them in.

Not quite, that's what soviet style 'employment' looks like. Labour would love it - full employment

Magog said:

It's an issue for all taxpayers and society if people are claiming in work benefits, working, and not doing something productive or revenue generating. Of course personal responsibility is an important element of it, but people can only exercise their personal responsibility with regards to work and income within the boundaries of the tax and benefits system as it exists.

Quite so, the tax and benefits system should positively encourage work as a choice over benefits, and the proposed reductions will go some way to achieving a better balance in that regard. In terms of this thread and the recent comments on tax-take being below expectation, clearly the expectations were too high and the 'heretical' thought is that this could actually be due to some tax rates remaining too high.

[Tannedbaldhead]

A huge problem the govt is facing is the number of part time jobs in the workplace. Many large retailers, warehouses and distribution centres are paying three part timers to do a shift one full timer could do. Their motovation is that if they keep an individual's hours worked and pay low enough thet don't have to make an employer's national insurance contributions.

The result of this is what headlines as the economic miracle of three created jobs is merely one. The next problem is all three individuals will be below tax and NI paying thresholds, on employers' NI contribution is paid and if the part-timers have families substantial in work benefits will be paid out financed by us the taxpayers. The profits generated by these policies and the huge salaries and bonuses generated by these policies will then be subject to aggressive tax avoidance keeping the govt short of the tax take it needs.

[Claudia Skies]

^^^ Very true. All very indicative of the crazy state of UK today.

[turbobloke]

Claudia Skies said:

^^^ Very true. All very indicative of the crazy state of UK today.

Which didn't build up overnight, lest we not forget 1997-2010, in terms of what to do about it, lower tax rates to reduce the incentive for avoidance, and address NI the 'tax on earnings/jobs'. The Coalition has had time to address this but in context were lumbered twice, once by the shambles left by the outgoing shambles, and again by being hogtied to libdims.

If people want better jobs (hours and/or pay) and can't get them, employability should be the first consideration.

Related:

http://blogs.spectator.co.uk/coffeehouse/2014/02/t...

[plasticpig]

Tannedbaldhead said:

A huge problem the govt is facing is the number of part time jobs in the workplace. Many large retailers, warehouses and distribution centres are paying three part timers to do a shift one full timer could do. Their motovation is that if they keep an individual's hours worked and pay low enough thet don't have to make an employer's national insurance contributions.

The result of this is what headlines as the economic miracle of three created jobs is merely one. The next problem is all three individuals will be below tax and NI paying thresholds, on employers' NI contribution is paid and if the part-timers have families substantial in work benefits will be paid out financed by us the taxpayers. The profits generated by these policies and the huge salaries and bonuses generated by these policies will then be subject to aggressive tax avoidance keeping the govt short of the tax take it needs.

To be fair you also have the company directors who pay themselves a minimal salary so their class 1 NI contributions qualify them for things like JSA and then take the rest as dividends. It's a bit of a piss take really.

[turbobloke]

plasticpig said:

To be fair you also have the company directors who pay themselves a minimal salary so their class 1 NI contributions qualify them for things like JSA and then take the rest as dividends. It's a bit of a piss take really.

That's one not particularly representative outlook on the benefits side, what are the costs? Both are needed to form a cost-benefit analysis.

In the context of the thread and recent posts, where people are supposedly coerced but in reality aren't, consider also small business owners, and how many opt for sole trader status as opposed to being a Director of a ltd co they set up.

Were you thinking of expensive BBC presenters, trendy lefty comedians and the like, as opposed to the typical small business owner?

[plasticpig]

turbobloke said:

That's one not particularly representative outlook on the benefits side, what are the costs? Both are needed to form a cost-benefit analysis.

In the context of the thread and recent posts, where people are supposedly coerced but in reality aren't, consider also small business owners, and how many opt for sole trader status as opposed to being a Director of a ltd co they set up.

Were you thinking of expensive BBC presenters, trendy lefty comedians and the like, as opposed to the typical small business owner?

Costs to who? The directors win both ways. Their company makes less contributions and they can award themselves higher dividends. Not sure what the theoretical amount lost by HMRC is. It's a pretty common tactic in small companies though. One I have been very tempted to do myself.

[turbobloke]

plasticpig said:

turbobloke said:

That's one not particularly representative outlook on the benefits side, what are the costs? Both are needed to form a cost-benefit analysis.

In the context of the thread and recent posts, where people are supposedly coerced but in reality aren't, consider also small business owners, and how many opt for sole trader status as opposed to being a Director of a ltd co they set up.

Were you thinking of expensive BBC presenters, trendy lefty comedians and the like, as opposed to the typical small business owner?

Costs to who? The directors win both ways. Their company makes less contributions and they can award themselves higher dividends. Not sure what the theoretical amount lost by HMRC is. It's a pretty common tactic in small companies though. One I have been very tempted to do myself.

Nor me, whatever advantages you (not necessarily you personally) can see from it, don't have any merit from my perspective - but business owners are in different positions with different aims.

I was referring to the entire package of being a Director particularly of a small business you (as above) own. There are entries on the 'cost' side.

Also as mentioned, not all small businesses choose/want to go down the ltd co route.