[Misc] Will the Unions bring everyone to their knees?

[zefarelly]

cant open mines, environmental objections. cant have workhouses, planning objections.

I'm sure Boris can do attitude will 'get regression done'

 

[Harry Wilson's tackle]

You seem to be in a real tizzy about this, but please, don't just take my word for it - here's the latest I could find on the subject from HMRC (2019/20 tax year, published March 2022): https://www.gov.uk/government/stati...0-commentary-for-tables-31-to-311-316-and-317

View attachment 149230

Roughly 70% of 'additional rate' taxpayers (i.e. income from all sources exceeding £150k) have the majority of their income from employment.

• All of the bankers? Employees.
• All of the fat-cat C-suite company execs? Employees.
• All of their bonuses and share income (apart from potentially a small amount in 'tax favoured' all-employee share schemes)? Taxed as employment income at the same 48.25% rate (+ 15.05% from their employer).
• Employees earning over £100k do need to file tax returns, but can't claim anything other than tiny amounts (if at all) for the expenses you mention. They genuinely do pay tax at full rates on virtually all of their income (with the exception being the very open and well published 'avoidance' schemes created by government, e.g. pension contributions).
• Google's UK corporation tax liability has no bearing on the UK personal tax liabilities of any of its employees or shareholders. Google and its parent Alphabet have never paid out any dividends and have publicly stated that they do not intend to do so in the near future.
• The Google Annual Report referenced in your link (https://find-and-update.company-information.service.gov.uk/company/03977902/filing-history) shows that Google paid £118M of employer NI contributions in that tax year. It doesn't show the PAYE or employee NI withholdings as that is not a cost of the business, but be assured that they will have been made in full.

Many thanks for that. I stand corrected. Perhaps I have swallowed all the hyperbole associated with the likes of Google and extrapolated it back far farther than is appropriate. One lives and learns

 

[LamieRobertson]

I was union leader at my business, knocked off at 4 most days, sometimes downed tools at 3 when it was really hot and sunny.

That’s an example of why he’s not keen ..that and I might start revolting

 

[LamieRobertson]

Many thanks for that. I stand corrected. Perhaps I have swallowed all the hyperbole associated with the likes of Google and extrapolated it back far farther than is appropriate. One lives and learns

One of the things I like about you Harry ..prepared to humble yourself.

 

[WATFORD zero]

Nobody doubts there is all sorts of tax avoidance going on [MENTION=1200]Harry Wilson's tackle[/MENTION], but where is your evidence that the vast majority of recipients of £150k pay nowhere near the full whack of tax?

My guess is that it all changes for people making millions every year because entry to off shore tax havens then come into play. To me, £150k is a nice but not particularly extraordinary amount of money to make, and my gut feeling is that plenty/most of them will be caught in PAYE.

Having retired some years ago I fully accept my experience is obviously out of date, but just over 10 years ago out of about 15 being paid more than £150k only three were paid through PAYE, and two of those three insisted on it out of principle. The rest got paid through various different consultancies, companies etc for tax efficiency reasons.

It is only one example, but at the time, I believed that those sort of numbers were representative

 

[Springal]

Having retired some years ago I fully accept my experience is obviously out of date, but just over 10 years ago out of about 15 being paid more than £150k only three were paid through PAYE, and two of those three insisted on it out of principle. The rest got paid through various different consultancies, companies etc for tax efficiency reasons.

It is only one example, but at the time, I believed that those sort of numbers were representative

I think it depends on the company, while I think for many there will be flexible employees, but my experience in the tech industry is they’re pretty rigid, below VP level not much special deals going on. Paid through PAYE. I couldn’t even get a previous employer to go above a certain % for pension contributions (before tax)

And having done tax returns , agree very limited options to gain tax relief on much if income was PAYE

 

[WATFORD zero]

My boss isn’t keen on me becoming a union member

You've mentioned him before. He sounds like a right ********

 

[WATFORD zero]

I think it depends on the company, while I think for many there will be flexible employees, but my experience in the tech industry is they’re pretty rigid, below VP level not much special deals going on. Paid through PAYE. I couldn’t even get a previous employer to go above a certain % for pension contributions (before tax)

And having done tax returns , agree very limited options to gain tax relief on much if income was PAYE

In my earlier life I worked for some big financial companies and they were very inflexible, later life with SME's and even smaller plc's and it's a whole different story. Maybe that's why there are such different views on how many people over 150K are on PAYE (this was all tech industry too)

 

[Harry Wilson's tackle]

Having retired some years ago I fully accept my experience is obviously out of date, but just over 10 years ago out of about 15 being paid more than £150k only three were paid through PAYE, and two of those three insisted on it out of principle. The rest got paid through various different consultancies, companies etc for tax efficiency reasons.

It is only one example, but at the time, I believed that those sort of numbers were representative

Ah.

I think it may well take some digging before the full facts are clear, then. HMG data will probably not show the number of people who have some of their income directed through non PAYE routes, and will capture PAYE data only for income that goes through the PAYE channels. Indeed it may well define income as being PAYE income.

And yes I can imagine that there may be wide variation in different sectors.

One of my colleagues (a university professor) earns a proportion (I don't know how much) of his income via consultancies paid to a company that he set up. He drives a hire car that is leased to a company that he set up. But as far as HMG income statistics are concerned pehaps his data are curated as his PAYE university salary. I simply don't know.

There are also several medics I know who are NHS employees but who moonlight at a private hospital. Their employment arrangements are, of course, none of my business.

Anyway, I don't wish to backtrack after being schooled, and will leave it there, with one eyebrow quivering between rest and raised.

 

[schmunk]

Having retired some years ago I fully accept my experience is obviously out of date, but just over 10 years ago out of about 15 being paid more than £150k only three were paid through PAYE, and two of those three insisted on it out of principle. The rest got paid through various different consultancies, companies etc for tax efficiency reasons.

It is only one example, but at the time, I believed that those sort of numbers were representative

IR35 has put paid to most of those wheezes. HMRC are much hotter on tax avoidance/evasion now than they ever have been; e.g. https://www.gov.uk/government/news/...voidance-scheme-promoted-by-london-based-firm

 

[WATFORD zero]

IR35 has put paid to most of those wheezes. HMRC are much hotter on tax avoidance/evasion now than they ever have been; e.g. https://www.gov.uk/government/news/...voidance-scheme-promoted-by-london-based-firm

I'm sure I remember IR35 coming in about 20 years ago long before I retired. In the early days it stopped a lot of tech 'contractors' with their ltd/one client companies. The people I am talking about where still doing this just over 10 years ago ?

All of us had a number of business interests and companies, but we were all getting over 150K from a single group of companies. It was our choice whether we took that through PAYE or not

 

[schmunk]

I'm sure I remember IR35 coming in about 20 years ago long before I retired. In the early days it stopped a lot of tech 'contractors' with their ltd/one client companies. The people I am talking about where still doing this just over 10 years ago ?

All of us had a number of business interests and companies, but we were all getting over 150K from a single group of companies. It was our choice whether we took that through PAYE or not

Ah, but since 2017 in the public sector, and 2020 in the private sector, it has become the end-client's problem and suddenly, **would you believe it**, they've all started caring about the risk...

 

[rippleman]

Wow. That's something else I didn't know, that the majority of people earning >£150K are on PAYE and don't do a full tax return, claiming for this, that and the other. So as we crank up the scale to the massive companies, there is a glut of money gushing to the chancellor's coffers. Nice. But, oh, hang on, eventually as income becomes staggering....

https://inews.co.uk/news/google-uk-pays-just-50m-of-tax-on-revenues-totalling-1-8bn-966557

A tiny minority, I'll agree, and indeed this is a company rather than an individual. However....where does PAYE, no wriggle room, nothing to see here, transition into massive quantitative tax easing? £500K PA? Two mil? Ten Mil?

Thinking about it....I also find the idea that most people on £150K a year are simple employees on a fixed income with PAYE a little surprising. Nobody employed via a third party? Nobody paid in a mix of salary and stock? Nobody claiming for a home office, wear and tear, or employees? Nobody offsetting tax liability by investment? And nobody taking advice, whether it be a simple £400 to do the tax return to more complex and costly advice?

Well, I'm surprised, I'll admit, but must say I am delighted that nothing like this goes on, and am more than happy to be schooled by an expert

But you are, to a certain extent, absolutely correct. Everybody has heard about the film partnership tax avoidance schemes. There are also Venture Capital Trusts. If you have the wedge to invest, you can save a significant amount of tax. But you have to have that wedge in the first place. So yes, there are certainly mechanisms for the most wealthy to reduce the tax they pay. Gift Aid and pension contributions also save tax at the higher rate.

 

[rippleman]

Many thanks for that. I stand corrected. Perhaps I have swallowed all the hyperbole associated with the likes of Google and extrapolated it back far farther than is appropriate. One lives and learns

It is a total misconception that because a high earner is an employee and therefore under PAYE that there is nothing that can be done to mitigate their tax liability. I gave examples in my previous post.

 

[schmunk]

But you are, to a certain extent, absolutely correct. Everybody has heard about the film partnership tax avoidance schemes.

These are not legal tax avoidance and almost everyone involved has had to pay back the tax plus penalties on top.

There are also Venture Capital Trusts. If you have the wedge to invest, you can save a significant amount of tax.

These are legitimate government-led tax avoidance, for the wealthy, but they are rather risky investments. Caveat Investor!

But you have to have that wedge in the first place. So yes, there are certainly mechanisms for the most wealthy to reduce the tax they pay. Gift Aid and pension contributions also save tax at the higher rate.

Absolutely, there is more motivation for tax avoidance for higher earners, but actual bona fide outlets are limited - even Gift Aid and pension are now capped to avoid exploitation.

 

[LamieRobertson]

You've mentioned him before. He sounds like a right ********

Awful ..I’ve told him so too …as I was looking in the mirror

 

[WATFORD zero]

Awful ..I’ve told him so too …as I was looking in the mirror

Good for you, standing up for yourself.

What did he say

 

[Chicken Run]

Good for you, standing up for yourself.

What did he say

He said, if you spent as much time on productivity as you do on chat sites talking to pensioners I’d give you a pay rise now, btw he was talking to his reflection [emoji6]


Sent from my iPhone using Tapatalk Pro

 

[Eric the meek]

I don't think salary sacrifice has been mentioned.

This is a legal way of reducing your tax bill. In return for a voluntary pay cut, your employer makes a commensurately (or maybe not - eez complicated) bigger contribution to your personal pension, out of your gross pay, and therefore free of tax.

This is advantageous to all taxpayers, but is especially true for higher rate taxpayers, as it removes a chunk of your earnings from your taxed pay. This could have the effect of moving you down a tax band, on your marginal tax rate, as well as reducing employee's NI. It is also advantageous for the employer, as they don't have to pay employer's NI on the sum involved. It must still fall within the annual allowance rules.

Imagine paying all your gross income straight into your pension in the years approaching retirement. I realise this option is not available to everyone.

Of course, it only works if you anticipate that when you draw your pension, it will be taxed at a marginal tax rate lower than when you paid it in.

 

[Thunder Bolt]

Back on topic. Far from bringing the country to its knees, the train strike has garnered more support from the public.

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