First it was shareholders now it's the self empoyed

[PurpleMoonlight]

http://www.dailymail.co.uk/news/article-4273516/Tr...

The Government clearly prefers everyone to be employed PAYE.

But seems to fail to appreciate that there needs to be individuals willing to establish businesses, be they self employed or Ltd, to create those PAYE jobs. They often do so at huge personal financial risk too. The Government should be encouraging them not penalising them.

As an aside, the Government 'makes' £40,000 from a £100,000 PAYE salary. That's disgusting, and some of the net pay will go to the Government/Council in Council Tax, VAT, insurance tax etc.

Edited by PurpleMoonlight on Thursday 2nd March 03:52

[bogie]

Yep, PAYE sure is not one of the most tax efficient ways to earn your money...and even worse than that when you take off national insurance, and loss of £10k tax free allowance from £100-120k - then its effectively over 60% tax rate

But its only a small percentage of "rich" people who pay that...so thats ok...isnt it ? (sarcasm intended)

Still, many Euro countries are worse....other than a few tax haven islands, and Middle East countries I've not found anywhere better (otherwise I might have relocated already)

At least we may lose the layer of the EU to pay for soon.....

[Eric Mc]

We may be paying to the EU for years after we leave - so don't count on being free of EU payments for at least a decade.

[Chris Type R]

The sums that they're using include the Employers NI contribution. The comparison between employed and self-employed seem flawed.

"The Rich" - FFS

[KevinCamaroSS]

PurpleMoonlight said:

As an aside, the Government 'makes' £40,000 from a £100,000 PAYE salary. That's disgusting, and some of the net pay will go to the Government/Council in Council Tax, VAT, insurance tax etc.

That is actually fairly reasonable when compared to some countries. For example Hungary. The tax rate is 20/40% as in the UK, however, there is nil tax free allowances and also NIC at around 12% therefore you end up paying more direct tax in Hungary than you do in the UK.

[13m]

The thing is, when times get tough some entities look to see who has money and then seek to take it from them. That applies from burglars to central government.

That is what is happening here. Government sees that the self-employed can be squeezed more and know that PAYE voters will be happy because it doesn't affect them and after all it's "fair". Money raised, few if any votes lost.

[Terminator X]

Yet Nero's make a profit of £25m in the UK and pay no tax. You can see why Joe Public remains so calm about this sort of thing.

TX.

[PurpleMoonlight]

They will need to create a new tax though as they did with the Dividend tax, because the Torys promised not to increase income tax, NI and VAT during the parliament.

[13m]

Terminator X said:

Yet Nero's make a profit of £25m in the UK and pay no tax. You can see why Joe Public remains so calm about this sort of thing.

TX.

There are entities too big and too difficult to tax properly (I.e. to be bothered with). Much like the playground bully, the government will steal the lunch money from those who have it and who are least likely to fight back.

[markcoznottz]

Plus the one of social care levy, oh and increased insurance tax 🙂 Happy days

[ninja-lewis]

PurpleMoonlight said:

http://www.dailymail.co.uk/news/article-4273516/Tr...

The Government clearly prefers everyone to be employed PAYE.

But seems to fail to appreciate that there needs to be individuals willing to establish businesses, be they self employed or Ltd, to create those PAYE jobs. They often do so at huge personal financial risk too. The Government should be encouraging them not penalising them.

What proportion of the growth in self employment actually relates to disguised employment rather than genuine self employment?

[singlecoil]

ninja-lewis said:

PurpleMoonlight said:

http://www.dailymail.co.uk/news/article-4273516/Tr...

The Government clearly prefers everyone to be employed PAYE.

But seems to fail to appreciate that there needs to be individuals willing to establish businesses, be they self employed or Ltd, to create those PAYE jobs. They often do so at huge personal financial risk too. The Government should be encouraging them not penalising them.

What proportion of the growth in self employment actually relates to disguised employment rather than genuine self employment?

Most of it I reckon. There's a lot of people working as contractors who are really temporary employees.

[Trabi601]

On the flip side of this, how often does a question come up regarding securing a mortgage, where it turns out a self employed person has been declaring minimal income and taking money out in more 'tax efficient' ways?

Seems some self employed people want all the benefits with none of the downsides.

[oop north]

Chris Type R said:

The sums that they're using include the Employers NI contribution. The comparison between employed and self-employed seem flawed.

In USA self-employed people pay the employer and employee equivalent

[paul789]

Trabi601 said:

On the flip side of this, how often does a question come up regarding securing a mortgage, where it turns out a self employed person has been declaring minimal income and taking money out in more 'tax efficient' ways?

Seems some self employed people want all the benefits with none of the downsides.

Now don't be daft, you silly sausage. All the benefits? Holiday pay, sickness, pension contributions?

Freelancers fulfil a commercial need. We don't force ourselves onto companies - we are a flexible resource and we have to prove ourselves everyday.

Ultimately, we bear all the risk and realise a relatively small net reward. Even this reward sometimes only exists to cover the bench time.

But don't let me spoil your 'evil contractors' narrative though!

[PurpleMoonlight]

singlecoil said:

Most of it I reckon. There's a lot of people working as contractors who are really temporary employees.

Seems to me that if you are moving contracts every few months you should indeed be self employeed rather than a series of never ending short employments.

Does someone engaging a builder for an extention which takes three months to complete have to employ them on PAYE?

[13m]

paul789 said:

Trabi601 said:

On the flip side of this, how often does a question come up regarding securing a mortgage, where it turns out a self employed person has been declaring minimal income and taking money out in more 'tax efficient' ways?

Seems some self employed people want all the benefits with none of the downsides.

Now don't be daft, you silly sausage. All the benefits? Holiday pay, sickness, pension contributions?

Freelancers fulfil a commercial need. We don't force ourselves onto companies - we are a flexible resource and we have to prove ourselves everyday.

Ultimately, we bear all the risk and realise a relatively small net reward. Even this reward sometimes only exists to cover the bench time.

But don't let me spoil your 'evil contractors' narrative though!

Don't become too exercise by Trabi. He is special.

[KevinCamaroSS]

paul789 said:

Trabi601 said:

On the flip side of this, how often does a question come up regarding securing a mortgage, where it turns out a self employed person has been declaring minimal income and taking money out in more 'tax efficient' ways?

Seems some self employed people want all the benefits with none of the downsides.

Now don't be daft, you silly sausage. All the benefits? Holiday pay, sickness, pension contributions?

Freelancers fulfil a commercial need. We don't force ourselves onto companies - we are a flexible resource and we have to prove ourselves everyday.

Ultimately, we bear all the risk and realise a relatively small net reward. Even this reward sometimes only exists to cover the bench time.

But don't let me spoil your 'evil contractors' narrative though!

Trabi does not mention contractors, only self-employed. Any number of contractors work through a limited company, not as self-employed.

[bernhund]

paul789 said:

Trabi601 said:

On the flip side of this, how often does a question come up regarding securing a mortgage, where it turns out a self employed person has been declaring minimal income and taking money out in more 'tax efficient' ways?

Seems some self employed people want all the benefits with none of the downsides.

Now don't be daft, you silly sausage. All the benefits? Holiday pay, sickness, pension contributions?

Freelancers fulfil a commercial need. We don't force ourselves onto companies - we are a flexible resource and we have to prove ourselves everyday.

Ultimately, we bear all the risk and realise a relatively small net reward. Even this reward sometimes only exists to cover the bench time.

But don't let me spoil your 'evil contractors' narrative though!

This. I know plenty of sole traders who have no pension, as they sold it to stay afloat during the recession. I'm a sole trader & have worked 6 day weeks for best part of 35 years and do at least 2 hours paperwork on Sundays. Anyone with a business mind would say the business is clearly not viable, but I have to find the time and money to cover a pension, accountant, public liability insurance, loss of earnings at Christmas & holidays and all other business expenses. The worst of it was when I was in a car crash & couldn't work for 7 months. You wouldn't believe the hoops I had to jump through for incapacity benefit. And when I finally got it, it was about 4 months since applying.

[singlecoil]

PurpleMoonlight said:

singlecoil said:

Most of it I reckon. There's a lot of people working as contractors who are really temporary employees.

Seems to me that if you are moving contracts every few months you should indeed be self employeed rather than a series of never ending short employments.

Does someone engaging a builder for an extention which takes three months to complete have to employ them on PAYE?

That would depend on how he was being paid I expect. If he is on stage payments and is genuinely meeting the criteria for self employment then he should be paid as such. If on the other hand he is being paid day rate and expected to do a certain number of hours per day then that sounds very much like employment to me. The fact that the employment is temporary doesn't stop it being employment.