Jeremy Corbyn (Vol. 3)

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motco

15,918 posts

245 months

Sunday 24th November 2019
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Bussolini said:
Crippo said:
If Labour is elected then I’m going to demand a new election. After all people didn’t know what they were voting for when he said he was going renegotiate a credible deal with Europe and doesn’t. That they thought only the Rich would pay abit more tax but actually everyone gets walloped with significant tax rises and that the marvellous NHS which was promised loads of investment is now over run with health tourists and strikes. After all if the losers can demand a second referendum when the most democratic of all votes happened in 2016, then I’m damned sure the losers could demand another ejection if the wrong government is elected. At the end of the day Brexit is a walk in the park compared with Corbyn & McDonnell
The point you are trying to make is silly considering we will have another election in five years time. It's not forever.
Are you sure?



JBM78

360 posts

179 months

Sunday 24th November 2019
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Wombat3 said:
Not really. In order to pay a dividend you first have to make a profit...
on which you first pay corporation tax.

The combined tax take from Corp tax +Divi tax is little different from PAYE
NI savings though, particularly in relation to employer's NI

98elise

26,366 posts

160 months

Sunday 24th November 2019
quotequote all
George Smiley said:
98elise said:
George Smiley said:
bazza white said:
Am I right in thinking labour's policies make being paid through a ltd company pointless.

So whilst they bark on about the 5% only being hit reality is even a sparky/handyman/beautician etc on average earnings of 28k a year is going to get shafted for a grand a year changing over to paye eek
It's one area I agree with. Should it be right I could book over 100k, pay myself 640 a month (no paye or ni) then top up with lightly taxed dividends?

Most ltds are done for this reason alone.
Are dividends lightly taxed? I need to have a word with my accountant if that's the case!
Certainly less than paye
There is very little in it these days.

98elise

26,366 posts

160 months

Sunday 24th November 2019
quotequote all
JBM78 said:
Wombat3 said:
Not really. In order to pay a dividend you first have to make a profit...
on which you first pay corporation tax.

The combined tax take from Corp tax +Divi tax is little different from PAYE
NI savings though, particularly in relation to employer's NI
How much employers NI do PAYE employees pay?

Mort7

1,487 posts

107 months

Sunday 24th November 2019
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motco said:
Excellent!

ant1973

5,693 posts

204 months

Sunday 24th November 2019
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The biggest issue for me the deceptively reasonable suggestion that dividends should be paid at the same rate of tax as income. Most people will not appreciate that dividends are paid after tax. In reality, this is a massive tax hike for small, owner managed, businesses.

By my reckoning, if you own a company and earn a £100k profit and take it all as dividend (post payment of CT), you pay an overall effective rate of tax of 31.7%. If you are an employee and earn the same, you pay 33.4% (a pretty meager incentive you might say, all other things being equal).

Taking the combined effect of the Dear Leader's increases in CT and dividend tax rates, this increases to 45.2% Not really a "bit more", is it! It is a near 50% increase in tax. More to the point, it leaves an employee paying less tax than the business owner if they earning the same amount of money. This will shatter small businesses, full stop. If anything, it plays into the hands of big business by eroding competition.

So how would small business react to this? Some would shut down and move back into employment. As an employee they would earn less, since the employer will reduce their income by the rate of Employer's NI. The tax take is the same.

For those that remain, any slack in the business will be removed. That will involve making employee's redundant (or freezing recruitment) - tax take down for the state. Some will decide this is liable to be transient and wait it out. Sure we will pay more CT for 5 years but many will reduce their outgoings and earnings and wait it out for a change of government.

Some may go abroad and work for a period of time but family commitments will make this less likely.

I just cannot see how the state benefits from this. Labour do not understand (or care) about the basic law of incentives which drives people to start a business.

Stay in Bed Instead

22,362 posts

156 months

Sunday 24th November 2019
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ant1973 said:
The biggest issue for me the deceptively reasonable suggestion that dividends should be paid at the same rate of tax as income. Most people will not appreciate that dividends are paid after tax. In reality, this is a massive tax hike for small, owner managed, businesses.

By my reckoning, if you own a company and earn a £100k profit and take it all as dividend (post payment of CT), you pay an overall effective rate of tax of 31.7%. If you are an employee and earn the same, you pay 33.4% (a pretty meager incentive you might say, all other things being equal).

Taking the combined effect of the Dear Leader's increases in CT and dividend tax rates, this increases to 45.2% Not really a "bit more", is it! It is a near 50% increase in tax. More to the point, it leaves an employee paying less tax than the business owner if they earning the same amount of money. This will shatter small businesses, full stop. If anything, it plays into the hands of big business by eroding competition.

So how would small business react to this? Some would shut down and move back into employment. As an employee they would earn less, since the employer will reduce their income by the rate of Employer's NI. The tax take is the same.

For those that remain, any slack in the business will be removed. That will involve making employee's redundant (or freezing recruitment) - tax take down for the state. Some will decide this is liable to be transient and wait it out. Sure we will pay more CT for 5 years but many will reduce their outgoings and earnings and wait it out for a change of government.

Some may go abroad and work for a period of time but family commitments will make this less likely.

I just cannot see how the state benefits from this. Labour do not understand (or care) about the basic law of incentives which drives people to start a business.
Don't forget the Tories invented the Dividend tax.

AJL308

6,390 posts

155 months

Sunday 24th November 2019
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jakesmith said:
So Jezza will remain neutral in a future ref 'to respect the will of the people' he doesn't get this does he people want a strong leader to, you know, lead
He's even lying about that. They played his full quote on the radio the other day and it was something like;

I intend to remain neutral so that I can implement the result of a second referendum in an even handed manner. People chose to vote leave in the 2016 referendum but they did not vote to lose their jobs and be worse off.

So, he says he intends to remain neutral yet his very next sentence is an essentially remain one. Total moron.

Edited by AJL308 on Sunday 24th November 12:08

AJL308

6,390 posts

155 months

Sunday 24th November 2019
quotequote all
Evanivitch said:
If you're earning over £120k you're definitely not middle class by most people's standard, except London of course. But until the Capitalist Kingdom of London is established, try to remember the rest of us still exist.
Lots in the off-shore industry would earn that. Easily achievable for a diver in the North Sea, let alone a senior one. I know people who do marine protection work who earn that and more.

AJL308

6,390 posts

155 months

Sunday 24th November 2019
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Zirconia said:
Don't worry, they will vote themselves another pay rise to hit that 80k+ target.
Not without first lifting the tax bar to 500 quid more than they vote themselves.

AJL308

6,390 posts

155 months

Sunday 24th November 2019
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JagLover said:
Lots of people moaning about Rachel Riley pointing out Corbyn is a tw*t
Usually the same people who will happily and loudly call Boris (indeed any Tory supporter) a fascist!

loafer123

15,404 posts

214 months

Sunday 24th November 2019
quotequote all
ant1973 said:
The biggest issue for me the deceptively reasonable suggestion that dividends should be paid at the same rate of tax as income. Most people will not appreciate that dividends are paid after tax. In reality, this is a massive tax hike for small, owner managed, businesses.

By my reckoning, if you own a company and earn a £100k profit and take it all as dividend (post payment of CT), you pay an overall effective rate of tax of 31.7%. If you are an employee and earn the same, you pay 33.4% (a pretty meager incentive you might say, all other things being equal).

Taking the combined effect of the Dear Leader's increases in CT and dividend tax rates, this increases to 45.2% Not really a "bit more", is it! It is a near 50% increase in tax. More to the point, it leaves an employee paying less tax than the business owner if they earning the same amount of money. This will shatter small businesses, full stop. If anything, it plays into the hands of big business by eroding competition.

So how would small business react to this? Some would shut down and move back into employment. As an employee they would earn less, since the employer will reduce their income by the rate of Employer's NI. The tax take is the same.

For those that remain, any slack in the business will be removed. That will involve making employee's redundant (or freezing recruitment) - tax take down for the state. Some will decide this is liable to be transient and wait it out. Sure we will pay more CT for 5 years but many will reduce their outgoings and earnings and wait it out for a change of government.

Some may go abroad and work for a period of time but family commitments will make this less likely.

I just cannot see how the state benefits from this. Labour do not understand (or care) about the basic law of incentives which drives people to start a business.
Whilst I agree with your post, the logical thing would be for business owners to pay themselves through wages if that incurred less tax.

Personally, as the co-owner of several businesses, I do little tax planning/optimisation at the moment but would start to do so if Corbyn got in.

ant1973

5,693 posts

204 months

Sunday 24th November 2019
quotequote all
Stay in Bed Instead said:
Don't forget the Tories invented the Dividend tax.
I completely agree. The Tories have hardly been business friendly in the last decade. But what sane choice we have? If we want a better society it has to be paid for somehow. With a narrowing tax base, however, the position becomes ever more precarious. Those within that tax base are ever more vulnerable to taxation - particularly if they are immobile. There is no national consensus as to what amounts to a "fair" level of taxation or what it is intended to achieve. That's the problem. The NHS is a case in point. Demand for anything that is useful and free is liable to be infinite. You could make a compelling case for doubling the NHS budget and I do not doubt that outcomes would improve. Would the "improvement" in outcomes be doubled? Unlikely. So where do you draw the line. The more you spend on anything the more incremental the improvement. Not an absolute rule but not a bad rule of thumb. How much money would be saved if the causes of lifestyle choices were addressed? But that's too difficult a conversation for the political classes. Why is drink driving a social stigma but excessive drinking a "good laugh".

ant1973

5,693 posts

204 months

Sunday 24th November 2019
quotequote all
loafer123 said:
Whilst I agree with your post, the logical thing would be for business owners to pay themselves through wages if that incurred less tax.

Personally, as the co-owner of several businesses, I do little tax planning/optimisation at the moment but would start to do so if Corbyn got in.
Shifting to self employment is also likely since self employed ni is cheaper than employer ni. I wonder if they have considered that behavioural change?

Stay in Bed Instead

22,362 posts

156 months

Sunday 24th November 2019
quotequote all
ant1973 said:
Shifting to self employment is also likely since self employed ni is cheaper than employer ni. I wonder if they have considered that behavioural change?
Other downsides to be considered with that though.

ant1973

5,693 posts

204 months

Sunday 24th November 2019
quotequote all
Stay in Bed Instead said:
Other downsides to be considered with that though.
Yes. Not for the feint hearted or under insured.! Cue disposal of assets to spouse and humourous divorce consequences thereafter!

oop north

1,592 posts

127 months

Sunday 24th November 2019
quotequote all
ant1973 said:
Shifting to self employment is also likely since self employed ni is cheaper than employer ni. I wonder if they have considered that behavioural change?
No, they definitely haven’t. Have had one quick read through the manifesto and the funding document and they seem to assume that most behaviours will be unchanged - they assume that dividend income is unearned income, and there is a comment to the effect that if you run a company and take dividends instead of earnings (Salary with nic thereon) well you should just be taking it as salary

loafer123

15,404 posts

214 months

Sunday 24th November 2019
quotequote all
ant1973 said:
Stay in Bed Instead said:
Other downsides to be considered with that though.
Yes. Not for the feint hearted or under insured.! Cue disposal of assets to spouse and humourous divorce consequences thereafter!
That’s what LLPs are for...

Dr Jekyll

23,820 posts

260 months

Sunday 24th November 2019
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98elise said:
How much employers NI do PAYE employees pay?
13.8%

Wombat3

11,962 posts

205 months

Sunday 24th November 2019
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Dr Jekyll said:
98elise said:
How much employers NI do PAYE employees pay?
13.8%
And that number will be squarely in McDonnel's sights, you can bet the farm on that.

Hes committed not to change employee rates but said nothing about Employers rates.

Same as he will pull the same stunt Brown did & sneak through an effective tax rise by not raising allowances with inflation. (So called fiscal drag)

We've seen it all before.
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