Are you self employed, maybe a glimmer of hope.

Really? That doesn't make sense, either that or I am misreading you?

 

they are share holders receiving dividends, not employees

 

Ah ok, I see now, it's the 'divi' that's the key.

 

An eye opener for PAYE and normal self employed...possibly. Sorry for the long post, some here don't seem to get how this all works...

Someone I know, like moons (though it was a few decades ago and I have no idea how he personally runs his books)...

LTD co, he owned 50 shares, his wife the other 50

Paid his wife bang on her tax allowance to do nothing for 20 years for which, despite never paying a penny of NI or doing a minutes work, she was credited with having made NI contributions for that time so gets ye olde pension in full.

Meanwhile "my friend" paid himself a few thousand over the tax threshold, paid a few hundred of tax, employers and employees NI, a pittance, but it kept him out of the "never pays any tax" pile at the Rev office for investigation. Every 5 or 6 years his accountant moved his company's registered office to another tax region where they had another office. That put him back to the bottom of the "investigate" pile, or at least reset the clock somehow. Not that anything here was illegal, technically.

Additional to those allowances, he had at first £5K(?) dividends tax free and so did his missus as she owned half the shares, then Gordon Brown upped that allowance by (not to) £10K IIRC. We're up to about £50K legally tax free so far.

50p/mile car allowance made the car free. Office heating was a % of household bills, token rent allowance (worked at home).

VAT, he was on a scheme where he charged 17.5% (going rate at the time), then paid 14.5% to Customs & Excise without accounting for any purchases which suited him because he never had any purchases to claim on, so there's another £3K free actual cash (not untaxed allowance)/£100k, charged as VAT then trousered.

It all adds up. In his best year he earned just short of £100K and paid under 9k total tax. He didn't have any costs really other than the odd printer cartridge and professional indemnity insurance so it was pretty much all profit.

None of the above was his idea, it was standard stuff at the large firm of accountants he used that were wise enough to employ ex PAYE and Customs and excise accountants on their staff and get the inside view. He didn't choose these accountants, they took over the smaller one he used and he CBA to find another so went with the flow. All quite innocent.

Lets also not forget that he paid his main tax (on the dividends) up to two years after earning it.

And in my view the worst thing was despite all this pukka accounting for every penny and above board dealing with the tax office...his wife got lots of tax credits and of course the child allowance, some of which was based on our PAYE earnings only. You couldn't make it up really.

A lot of this stuff is defended under the blanket of making it worth the risk for wealth and job creating entrepreneurs. I can't agree, it's for the rich to get richer and pay as little tax as possible while the man in the middle (PAYE) subsidises all.

I don't think the Authorities really expect any meaningful tax from the self employed, but neither do they expect to hand them any money. They are kind of in another system altogether where they look after number one, duck and dive, pay as little tax as possible and don't claim either - everyone's happy. If you don't fit that description I suggest you're doing it wrong.

PAYE are stiffed on every penny they earn so personally I think they deserve a bit of pay back. Not so sure about TRULY self employed people, but the zero hours not really self employed could use a break too.

Hope that doesn't offend anyone, no criticism intended, no holes to dig, it is what it is.

 

£2917 per month! *****ing hell, I wish I was self employed!

I've just got a 3% pay rise which puts me on about £650 per month.

Who'd be a bloody pensioner!