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Thread: Self employed people virus payments

  1. #51
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    Quote Originally Posted by Kingstepper View Post
    Won't please everyone.

    You can continue to work.
    Only if you can get the materials / spare parts etc as most places are shutting down at the end of the week, we have a garage plenty of jobs in including ambulances but no parts available.
    As for the payments etc it's a joke a sick one at that the scheme for self employed dosn't even open until June, as for the furlough thing for employees how many business owners will be prepared to stump up the cash for a workforce not working until they can claim it back off the government.

  2. #52
    Quote Originally Posted by FULL TIMER View Post
    Only if you can get the materials / spare parts etc as most places are shutting down at the end of the week, we have a garage plenty of jobs in including ambulances but no parts available.
    As for the payments etc it's a joke a sick one at that the scheme for self employed dosn't even open until June, as for the furlough thing for employees how many business owners will be prepared to stump up the cash for a workforce not working until they can claim it back off the government.
    TBH just pointing out an advantage of the self-employed scheme as most comments seem to suggest the other one is the better. Some self-employed can continue to work (at home maybe) and will still claim this grant.

    Things aren't perfect but he's doing his best. Whatever he does someone will grumble that someone is getting more.

    Personally, just checked and my self-employed earnings were 48% so I'll get sweet f all. Ce la vie.

  3. #53
    Quote Originally Posted by Kingstepper View Post
    No doubt some will manage to get both payments.
    And probably work for cash still,win win

  4. #54
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    Quote Originally Posted by peter2704 View Post
    And probably work for cash still,win win
    This work for cash comment is getting really boring now! Not all self employed are going round asking for cash and in my experience the customer is the first to ask for a discount on my services for cash payment! It's far easier now to bank transfer and if anyone that has been paid in cash knows the interrogation you get from the bank from where its came from. I get my tax deducted & paid on my behalf from a large house builder I work for. I have no way of working from home, will not qualify for any help not that I planned on taking any!

    This attitude that we all chase cash payments is boring!

    How do we get mortgages if we only take cash and put a pittance through on our tax returns?



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  5. #55
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    Quote Originally Posted by learningtofly View Post
    I donít know anyone in my position (owner and sole director of a small business) who avoids paying tax. I pay both corporation tax and income tax (including on dividends drawn) and donít actually see why I should be stuffed whilst others receive assistance.

    Its barely any more tax efficient these days, and certainly doesnít justify the governmentís present position.
    Precisely.

    This thread has been a real eye opener for me, I had no idea there were so many folks that think weíre all tax dodging spivs. I, and all of the ltd company directors I know, pay vast amounts of corporation tax, VAT and dividend tax to the exchequer every year.

  6. #56
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    Quote Originally Posted by Peck View Post
    Precisely.

    This thread has been a real eye opener for me, I had no idea there were so many folks that think weíre all tax dodging spivs. I, and all of the ltd company directors I know, pay vast amounts of corporation tax, VAT and dividend tax to the exchequer every year.
    Completely agree.

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  7. #57
    Speaking to the few people I know last night that are self employed it is going to be a very difficult time for most of them having to wait until June for any form of help.
    Most seem to have very little saving to tide them over.
    Last edited by boring_sandwich; 27th March 2020 at 08:22.

  8. #58
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    Really? I don't know anyone who is in that position who doesn't. Most pay themselves £12,500 salary, avoiding any tax and paying minimal NI. The rest is paid as dividends. Then they claim back tax on literally everything they can. Coffees in the morning, breakfast, dinner, lunch everything seems a taxable expense. Some even throw there non working wife in there from an additional £12,500 of tax free income.

    Their argument is usually that they have no security in the work they do. But more often and not (from my experience) they have just as much and their day rate is 2 or 3 times that as an employee.

    So use the £55k example the OP used. On £55k a PAYE emloyee would pay £5,064 NI per annum against £464 of a self employed.

    Tax wise a PAYE employee would pay £9,496. Difficult to calculate the tax a self employed would pay but from my experience on £55k you would be looking at half of that.

    I'm not an accountant and I'm sure I won't be right in all cases just speaking from my friends group point of view.

    Quote Originally Posted by learningtofly View Post
    I donít know anyone in my position (owner and sole director of a small business) who avoids paying tax. I pay both corporation tax and income tax (including on dividends drawn) and donít actually see why I should be stuffed whilst others receive assistance.

    Its barely any more tax efficient these days, and certainly doesnít justify the governmentís present position.

  9. #59
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    Yup that's pretty much how/why a friend of mine 'does it' that way.

  10. #60
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    Quote Originally Posted by JPCain86 View Post
    Really? I don't know anyone who is in that position who doesn't. Most pay themselves £12,500 salary, avoiding any tax and paying minimal NI. The rest is paid as dividends. Then they claim back tax on literally everything they can. Coffees in the morning, breakfast, dinner, lunch everything seems a taxable expense. Some even throw there non working wife in there from an additional £12,500 of tax free income.

    Their argument is usually that they have no security in the work they do. But more often and not (from my experience) they have just as much and their day rate is 2 or 3 times that as an employee.

    So use the £55k example the OP used. On £55k a PAYE emloyee would pay £5,064 NI per annum against £464 of a self employed.

    Tax wise a PAYE employee would pay £9,496. Difficult to calculate the tax a self employed would pay but from my experience on £55k you would be looking at half of that.

    I'm not an accountant and I'm sure I won't be right in all cases just speaking from my friends group point of view.
    I certainly never had as much as 55k and I paid far more than the half you estimated. Then theres personal dividend tax, accountancy fees, ppe, tools/supplies, van/vehicle, holiday pay. I've been put off site on a Tuesday afternoon to keep work for employees and not had work for weeks till theres been enough work again. I'm not in the same bracket as your friends you've used as an example and theres plenty more like me.

    Why do I do it? If could be on the books I would, the company I do regular work for wont take on anymore employees as it doesn't suit them!

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  11. #61
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    Quote Originally Posted by Agd47 View Post
    I certainly never had as much as 55k and I paid far more than the half you estimated. Then theres personal dividend tax, accountancy fees, ppe, tools/supplies, van/vehicle, holiday pay. I've been put off site on a Tuesday afternoon to keep work for employees and not had work for weeks till theres been enough work again. I'm not in the same bracket as your friends you've used as an example and theres plenty more like me.

    Why do I do it? If could be on the books I would, the company I do regular work for wont take on anymore employees as it doesn't suit them!

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    That's the trouble with trying to put a little context around things. Everyone is quick the take it as you are talking to them personally.

    Please understand this is purely from my experience. Most of my friends earn much more than the £55k and pay less than the figures I've highlighted. It was just an example.

  12. #62
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    Quote Originally Posted by JPCain86 View Post
    Really? I don't know anyone who is in that position who doesn't. Most pay themselves £12,500 salary, avoiding any tax and paying minimal NI. The rest is paid as dividends. Then they claim back tax on literally everything they can. Coffees in the morning, breakfast, dinner, lunch everything seems a taxable expense. Some even throw there non working wife in there from an additional £12,500 of tax free income.

    Their argument is usually that they have no security in the work they do. But more often and not (from my experience) they have just as much and their day rate is 2 or 3 times that as an employee.

    So use the £55k example the OP used. On £55k a PAYE emloyee would pay £5,064 NI per annum against £464 of a self employed.

    Tax wise a PAYE employee would pay £9,496. Difficult to calculate the tax a self employed would pay but from my experience on £55k you would be looking at half of that.

    I'm not an accountant and I'm sure I won't be right in all cases just speaking from my friends group point of view.
    Your acquaintances are gaming the system. Breakfast, lunch and dinner are not legitimate expenses. Their non-working wife should not be receiving £12,500 pa tax free.

    However please try your best not to tar us all with the same brush; I, and many others, pay our way legitimately and do not do what your pals are doing. And if youíre trying to do comparative tax payments please try not to forget corporation tax, which adds 19% to your calculations which brings things back to near parity. Thanks.

  13. #63
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    I've worked alongside independent contractors who have openly flaunted their minimal tax liability through declaring low incomes. One of them didn't half complain when his fairly modest mortgage application was refused.
    Don't Panic

  14. #64
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    Quote Originally Posted by boring_sandwich View Post
    Speaking to the few people I know last night that are self employed it is going to be a very difficult time for most of them having to wait until June for any form of help.
    Most seem to have very little saving to tide them over.
    Iíve seen a lot of self employed saying they donít have money to live until June....I have sympathy for them (I spent last 20 years being self employed) but I always had enough money in my bank account to pay the tax bills every 6 months.

    How do self employed people find the cash for their tax bills if they have zero money to live on?

    They ought to be able to use their set aside tax bill money now to tide themselves over until the grants arrive in June?

  15. #65
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    That's the part I'm struggling to understand tbh, in a non judgemental way. Also if they're mortgage holders isn't there a 3 month deferred payment scheme that can be applied for, thereby reducing outgoings, even applies to BTL so my accountant claimed. Which to be honest surprised me though presumably it's as much, more even about protecting the banks by preventing a cascade of mortgage defaults than it is a gift for landlords. I'll pass tbh.
    Last edited by Passenger; 27th March 2020 at 10:55.

  16. #66
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    Quote Originally Posted by Peck View Post
    Your acquaintances are gaming the system. Breakfast, lunch and dinner are not legitimate expenses. Their non-working wife should not be receiving £12,500 pa tax free.

    However please try your best not to tar us all with the same brush; I, and many others, pay our way legitimately and do not do what your pals are doing. And if youíre trying to do comparative tax payments please try not to forget corporation tax, which adds 19% to your calculations which brings things back to near parity. Thanks.
    Wait a minute. I'm tarring no one with any brush. I'm purely stating this is from what I know from work friends and colleagues. If anything it is them who is doing the tarring.

    Dividends, corporation tax, either way. From my experience it is income. That they pay after expenses.

    I honestly think the people who play it by the books are the minority here.

    Tell me why you pay yourself minimum wage? Minimal national insurance payments but you will still draw the same state pension.

    To be honest my points are more around higher earner £100k plus. The figures at that range show a real difference.

  17. #67
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    Some self employed workers especially in construction have their taxed set aside by a larger company and dont have access to the tax money.

    I also dont understand why people have no money already as it's only been a week and most work either a week /month in advance so should be covered this month and most of this month paid next.

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  18. #68
    If two people do the same job they should pay the same tax regardless of their employment status.

    I'm happy for contractors to earn more money to balance the risk of the transitory nature of their job, but that shouldn't enable a tax benefit.

    In return, the same benefits afforded to PAYE staff should be offered to the self employed.

  19. #69
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    There are also many people confusing a sole trader business with a limited company set up.

    The MP who was on BBC breakfast 20 minutes ago didnít make the explanation very clear at all either, and he was given a perfect opportunity to do so.

  20. #70
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    Quote Originally Posted by Agd47 View Post
    Some self employed workers especially in construction have their taxed set aside by a larger company and dont have access to the tax money.
    This is why people are in a mess - complex games to hide what should be employees or workers that ends up confusing people - In the UK you cannot be a self-employed worker.

  21. #71
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    Quote Originally Posted by mr noble View Post
    How do self employed people find the cash for their tax bills if they have zero money to live on?
    For the hundreds of self employed people I know, because the month you have to pay your tax, January, is straight after the month you fill your boots.

    These days, many professions that one could reasonably aspire to require several years of working for buttons, after years of undergraduate and postgraduate study. Life for these people is balancing earning real money from other work and putting in the unpaid hours at the dream - too much of the latter and they're destitute, too much of the former and they aren't progressing. Consequently, their tax bills are low - mostly NI contributions - and they've no savings at all.

    Last edited by Der Amf; 27th March 2020 at 09:26.

  22. #72
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    Taking the side of the self employed here......I donít really understand why the dividend part of ďself employedĒ company owners is not being included in their earnings calculations.

    The gov made the rule, which made the small salary/big dividend method the most tax efficient, so it seems rather unfair to penalise those who chose to use that method.

    It is only a couple of percent more efficient from a tax POV anyway. Hardly diddling the system, as has been suggested.

  23. #73
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    I see the Govt is suggesting that once this is over, they will look at raising the taxes the self-employed pay.

  24. #74
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    Quote Originally Posted by scooby View Post
    So if your employed on paye and earn £55k you get a payment of £2500
    If your self employed on £55k you get nothing
    Um that seems like a kick in the teeth


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    Self employed pay less tax so it pained the Government to give them a near equal deal to the employed.

    So much so that the chancellor is already near on saying after this is over the self employed are going to pay more Tax.

    Perhaps even equal to the employed so that will be a significant change.

    A change that I suspect will drive more self employed to under declare their earnings even more than they do now lol.

  25. #75
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    Quote Originally Posted by JPCain86 View Post
    Dividends, corporation tax, either way. From my experience it is income. That they pay after expenses
    I donít really understand what you mean here but, just to be clear, dividends are not tax free expenses. We pay corporation tax on them AND then personal tax on them.

    Your PAYE vs ltd company director tax comparisons are incorrect and unfair.

  26. #76
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    Quote Originally Posted by Peck View Post
    I donít really understand what you mean here but, just to be clear, dividends are not tax free expenses. We pay corporation tax on them AND then personal tax on them.

    Your PAYE vs ltd company director tax comparisons are incorrect and unfair.
    I didn't know dividends were tax free sorry. Probably pay a bit less tax then.

    My point is that most (yes I said it) won't pay 19% corporation tax on the remaining £42.5k.

    They will chuck expenses at it and get it right down.

  27. #77
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    Quote Originally Posted by Peck View Post
    I donít really understand what you mean here but, just to be clear, dividends are not tax free expenses. We pay corporation tax on them AND then personal tax on them.

    Your PAYE vs ltd company director tax comparisons are incorrect and unfair.
    Correct.

    Quote Originally Posted by Allthingsblue View Post
    But on the flip side I'm sure many of us will know people who pay family members a wage from the business and that person does little or nothing in return and in doing so are avoiding tax.
    I've never done it, and have never even contemplated it. I have no idea whether other people do.

    There are many, many assumptions being made on this thread, but to my mind the situation is simple. Anyone who needs help as a consequence of the awful situation we're (all) in should get it, equally and without favour.

  28. #78
    Quote Originally Posted by Peck View Post
    I donít really understand what you mean here but, just to be clear, dividends are not tax free expenses. We pay corporation tax on them AND then personal tax on them.

    Your PAYE vs ltd company director tax comparisons are incorrect and unfair.
    Plus accountancy fees, incorporation and company return fees, employers NI on salary amount, as well as employee NI.

    There really isnít much difference for a lot of people running their own company. At least once you add everything in. Yes, some people are playing the system, but most of them are clearly breaking the rules that are already in place.
    It's just a matter of time...

  29. #79
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    Quote Originally Posted by JPCain86 View Post
    I didn't know dividends were tax free sorry. Probably pay a bit less tax then.

    My point is that most (yes I said it) won't pay 19% corporation tax on the remaining £42.5k.

    They will chuck expenses at it and get it right down.
    Youíre really not getting this are you!?

  30. #80
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    Quote Originally Posted by Peck View Post
    Youíre really not getting this are you!?
    I am clearly stating the situation that most of the people I know work too and that is that they pay very little tax for what they earn and in fairness a lot have come out and said well we can't have it both ways.

    I am not saying this is the case for everyone but feel free to put me in my place and say I earned £x and paid £x NI and £x tax. Which is in-line with what someone from PAYE would pay.

    I can give examples of many people who earned.£100k last year and paid less than £10k tax.

  31. #81
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    Quote Originally Posted by Alansmithee View Post
    I see the Govt is suggesting that once this is over, they will look at raising the taxes the self-employed pay.
    I hope not... and this is why i do get depressed sometimes...in one of my most recent years I think my total profit was about £27k, by the time i settled my account in Jan,and paid 50% and the other 50% in July, and in jan again, so a rolling Jan to Jan year, Iíd pulled in £27k, and shelled out £11k in tax payments...
    Thatís my real world figures...

  32. #82
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    Surely as a self employed person you would have either a Ďrainy dayí fund or cash saved to pay your tax bill
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  33. #83
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    Quote Originally Posted by JPCain86 View Post
    I am clearly stating the situation that most of the people I know work too and that is that they pay very little tax for what they earn and in fairness a lot have come out and said well we can't have it both ways.

    I am not saying this is the case for everyone but feel free to put me in my place and say I earned £x and paid £x NI and £x tax. Which is in-line with what someone from PAYE would pay.

    I can give examples of many people who earned.£100k last year and paid less than £10k tax.
    Are you saying these many people you know ended up with £100k in their bank accounts, paying less than £10k in tax? If so, they are bullsh*tters or out and out tax criminals. Itís not possible.

    And, just as another little tip to aid your understanding, as soon as you take anything over ~£42k in dividends, youíre taxed at 32.5% personally. On top of your 19% corporation tax

  34. #84
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    Quote Originally Posted by 100thmonkey View Post
    Surely as a self employed person you would have either a Ďrainy dayí fund or cash saved to pay your tax bill
    Can I ask why self- employed people should have to wipe out their savings, which might have taken years/decades to accumulate, when the employed don't?

  35. #85
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    Quote Originally Posted by 100thmonkey View Post
    Surely as an employed person you would have a rainy day fund
    FTFY

  36. #86
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    Quote Originally Posted by Peck View Post
    Are you saying these many people you know ended up with £100k in their bank accounts, paying less than £10k in tax? If so, they are bullsh*tters or out and out tax criminals. Itís not possible.

    And, just as another little tip to aid your understanding, as soon as you take anything over ~£42k in dividends, youíre taxed at 32.5% personally. On top of your 19% corporation tax
    Exactly. Too much uninformed opinion on this thread and too little empathy. Then again, that's TZ-UK these days.

  37. #87
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    Quote Originally Posted by 100thmonkey View Post
    Surely as a self employed person you would have either a Ďrainy dayí fund or cash saved to pay your tax bill
    Relative to what you earn, yes one should.
    I do find it hard though sometimes with what little get...

  38. #88
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    Quote Originally Posted by JPCain86 View Post
    I am not saying this is the case for everyone but feel free to put me in my place and say I earned £x and paid £x NI and £x tax. Which is in-line with what someone from PAYE would pay.
    Oh and I already have above. You donít understand how dividends are taxed within a business, hence your inaccurate comparison.

  39. #89
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    Quote Originally Posted by Peck View Post
    Are you saying these many people you know ended up with £100k in their bank accounts, paying less than £10k in tax? If so, they are bullsh*tters or out and out tax criminals. Itís not possible.

    And, just as another little tip to aid your understanding, as soon as you take anything over ~£42k in dividends, youíre taxed at 32.5% personally. On top of your 19% corporation tax
    No I am not. I am saying that they earnt £100k. I don't have the remainder of my salary in my bank at the end of the year.

    They spend it all then they go to an accountant who works his magic and gets their tax bill down to around £10k. Quite often they can't afford this so there has been times where they have folded the business and paid nothing and started again.

    I am telling you it is possible.

  40. #90
    As someone who has been a Ltd company contractor for over 25 years I can say for sure the tax breaks are not anywhere near what non contractors believe them to be. When I first started they were but over the years they have been eroded.
    I as a contractor will receive nothing and my wife who has a zero hour contract will receive nothing.
    We have savings that will see us through this but it will be a big hit where as someone who is paye will not have to use their savings which does not seem fair, especially as I am sure once this is over I will be included in the paying it back part.

  41. #91
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    Quote Originally Posted by JPCain86 View Post
    No I am not. I am saying that they earnt £100k. I don't have the remainder of my salary in my bank at the end of the year.

    They spend it all then they go to an accountant who works his magic and gets their tax bill down to around £10k. Quite often they can't afford this so there has been times where they have folded the business and paid nothing and started again.

    I am telling you it is possible.
    Think you've listened to one too many billy bullsh##s

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  42. #92
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    I also suspect that the more these high earning, self employed, powerfully built people earn, possibly the more leveraged up they are to not put away a slush fund....

  43. #93
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    I'm purely going on what my friends who are contractors and accountants say.

    I'll take it they are all lieing to me.

  44. #94
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    Quote Originally Posted by JPCain86 View Post
    No I am not. I am saying that they earnt £100k. I don't have the remainder of my salary in my bank at the end of the year.

    They spend it all then they go to an accountant who works his magic and gets their tax bill down to around £10k. Quite often they can't afford this so there has been times where they have folded the business and paid nothing and started again.

    I am telling you it is possible.
    Jesus Christ, where to start with this?

    All youíre talking about now is out and out illegality. Accountants Ďworking their magicí!? Mate you need to go away, read Ďaccountancy and tax for dummiesí and get some better mates. Embarrassed for you to be honest.

  45. #95
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    The last thing any accountancy firm wants is its clients being investigated for tax irregularities for working their "magic"

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  46. #96
    I for one am well pleased with the deal as I expected I'd get nothing to be honest , I have savings so not getting any money till June is not really an issue for me , but I can completely see why its an issue for self employed who live weekly hand to mouth.

  47. #97
    Quote Originally Posted by maccado View Post
    As someone who has been a Ltd company contractor for over 25 years I can say for sure the tax breaks are not anywhere near what non contractors believe them to be. When I first started they were but over the years they have been eroded.
    I as a contractor will receive nothing and my wife who has a zero hour contract will receive nothing.
    We have savings that will see us through this but it will be a big hit where as someone who is paye will not have to use their savings which does not seem fair, especially as I am sure once this is over I will be included in the paying it back part.
    Thatís downside to Universal Credit, anyone who is prudent and has certain savings will not get it.

  48. #98
    Quote Originally Posted by Kingstepper View Post
    Thatís downside to Universal Credit, anyone who is prudent and has certain savings will not get it.
    Unless of course you're PAYE and earn £100k have lots of savings you will get £2.5k per month.

  49. #99
    Quote Originally Posted by maccado View Post
    Unless of course you're PAYE and earn £100k have lots of savings you will get £2.5k per month.
    No, not fair...

  50. #100
    Master
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    Quote Originally Posted by Agd47 View Post
    The last thing any accountancy firm wants is its clients being investigated for tax irregularities for working their "magic"

    Sent from my SM-G950F using Tapatalk
    Maybe working their magic is a bad term but I meant claiming for expenses. I couldn't be bothered to list them.

    But the way I've seen it work. With nothing illegal done. Just making the most of everything.

    On £100k....

    Wife gets paid a salary aswell & we allow say 10k for other expenses, travel , mobile phone

    On net profit roughly 65k, pays corp tax of £12,350

    then say £3,750 in dividends if set company up right to give mrs shares as well.


    It would be circa £16.5k against £32k PAYE.

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