Forum menu
Say person A is a 50% tax payer. Can person A employ Person B (their spouse) for £43,999 per year to be their office manager, therefore reducing Person A's taxable income?
or is all this no longer possible these days?
I think that ( employers and employees ) NI might cause you to not save very much in that position.
You are Ken Livingstone, and I claim my £5.
I believe it is possible, although the person has to actually do some work (although I don't know how they can check on this).
You can employ who you like but you have to pay their TAX, NI and employers NI.
*currently looking to increase pension contributions to avoid losing child benefit*
All this and more, there is a whole industry in this country revolving around our tax laws and how to get round them.
Say person A is a 50% tax payer
If person A is an employee of another company then no you can't do this. If on the other hand person A owns and operates his or her own company then yes you probably can, provided certain practical conditions are met. e.g. is the job that is being done really worth a salary of £43,999 pa.
@FD, this sort of thing is only possible if you are self employed/run your own business. But yes it's possible and totally normal, using salary payments and dividends. You cannot (and never could) employ someone out of your taxed PAYE income and claim tax relief.
Person A would be salaried through an employer, but then also do private work earning approx £100k, which would involve meeting clients in rented offices & receiving payment from insurance companies.
If Person A is bringing in the kind of money then Person A can afford an accountant.
we all pay far too much tax nowadays ...am sick to the back teeth of hearing about tax tax tax !!
Actually, we don't pay that much. Unfortunately what we do pay is disproportionately loaded onto the poorer in society.
In my book tax avoidance = tax evasion.
[s]No moral outrage![/s] Not much moral outrage. This place is getting better. 😀
[s]No moral outrage![/s] Not much moral outrage. This place is getting [s]better[/s] worse. 🙄
Tax avoidance = cheating.
MTFU, pay what you owe.
This place is getting [s]better[/s] worse. 🙄
I thought the lack of hypocrisy was quite refreshing, I guess I was wrong. 😆
[i]I thought the lack of hypocrisy was quite refreshing[/i]
Would you care to explain my hypocrisy?
[img] 
[/img]
Actually, we don't pay that much. Unfortunately what we do pay is disproportionately loaded onto the poorer in society.
Dare I even ask.... but how'd you work that out? Higher rate tax payers account for a small proportion of population but pay the majority of tax. That seems pretty progressive to me.
Source:
2012-13 top 10% of tax payers (gross income of over 50,500) pay 55.3% of total tax.
Dare I even ask....
Oh no. You've done it now...
Tax efficiency = paying what you owe
Quote from Kerry packer in oz. "I'll pay more tax when you can spend it properly"
MTFU, pay what you owe.
But the rules allow you to calculate "what you owe" in different ways.
[i]But the rules allow you to calculate "what you owe" in different ways.[/i]
Indeed. So part of paying tax becomes a matter of morality...
Crikey..."in your opinion"...
BTW what efforts are you making to pay more tax than the minimum?
[i]BTW what efforts are you making to pay more tax than the minimum? [/i]
I'm PAYE; I get no choice in the matter. I work, I get taxed on my earnings.
..and strange though it may seem, I'm happy to pay tax; I see it as my contribution to the society I live in.
Oh no. You've done it now...
I know, I can only apologise.
..and strange though it may seem, I'm happy to pay tax; I see it as my contribution to the society I live in.
Me to.
stw...as ever, the home of the "holier than thou"...
stw...as ever, the home of the "holier than thou"...
Would you care to qualify that remark?
I see paying tax as a duty; it pays for the things in society that I use and that others benifit from, and is one of the things that makes a society civilised.
Your response is to cheapen that, to dismiss it.
So, MTFU and argue your point, or give over.
I think he means that you can still save tax even if you are on PAYE by gifting money to the Church.
I don't know the answer. But how much, as a percentage of all pre taxable income, do the top 10% take though? I'd have a pure guess at 70/80% possibly higher? be interested if some one knew that figure..2012-13 top 10% of tax payers (gross income of over 50,500) pay 55.3% of total tax.
I find a person's keenness to pay tax is inversely proportional to the amount they pay, it has very little to do with morality.
I've got a P60 somewhere, would you like to compare?
Crikey
You are saying those who lessen their tax liabilities in perfectly legal ways are morally inferior to you.
Presumably you have never had this option and I say you are "holier than thou" for this reason.
Don't have a P60, being PAYE isn't tax efficient for me.
[i]You are saying those who lessen their tax liabilities in perfectly legal ways are morally inferior to you.[/i]
No. You are putting words into my mouth.
I said: " part of paying tax becomes a matter of morality..."
I made no reference to myself; I suggested that the act of paying tax when you have a choice of how much to pay involves a moral judgement.
I have then spoken about my attitude towards tax.
At no point have I made a comparison, or claimed the moral high ground.
Allow me to ask a question or two;
If one is able to avoid paying some tax, is it a morality free issue?
Do you think we should all avoid paying tax?
If one is able to avoid paying some tax, is it a morality free issue?
Do you think we should all avoid paying tax?
We should all pay the right amount of tax.
The tax system should be set up so that it is simpler with less loop holes.
Where does the moral high ground end?
Cycle to Work to get out of Higher Rate Tax and buy a new MTB?
Import gear from the states to try and avoid VAT and Import Duty?
Shopping on Rose to save 1% VAT and not pay 20% to the UK Exchequer?
Increasing Pension or Charity donations?
If you overpaid HMRC on PAYE would you claim it back?
The op is on such a ego trip with this post-any excuse to tell people that you earn 100k eh? As others have said, if you earn that much you can probably afford a decent accountant, I've got a decent one and earn about 25% of what you do.
If person A was a 50% tax payer one might imagine them bright enough to figure it out for themselves
Crikey, do you adhere to the glass house maxim?
I expect you do, being a moral chap, and if that's the case then you are splitting hairs, in PhD level stw big hitter style.
I don't know the answer. But how much, as a percentage of all pre taxable income, do the top 10% take though? I'd have a pure guess at 70/80% possibly higher? be interested if some one knew that figure..
Not wanting to point out the obvious, but that table I linked too had that information too. To answer the question, the top 10% take 33% of all pre tax income. So still seems pretty progressive to me.
The bottom 50% of taxpayers pay, for comparison, 10.8%. Seems fair enough. Those that can pay more, do.
[i]Crikey, do you adhere to the glass house maxim?
I expect you do, being a moral chap, and if that's the case then you are splitting hairs, in PhD level stw big hitter style.[/i]
I notice a lack of answers...
Ditto!
1 Whether tax is a moral issue is a personal matter. If I was a high earner I'd be avoiding I expect, [u]it's up to government to tax people properly[/u], not allow a choice then selectively flame some of those who avoid (but not say the PM's dad).
2 see above.
Your answers?
i don't like paying tax.
i take every opportunity to reduce my tax bill. if i find a discarded train ticket i'll pocket it and set it against my tax. all bike purchases are set against my tax bill; my bike is after all my means of transport. the spare room is officially my office, but all i keep there are bike bits and other assorted crap. it does mean i can save 15% on the cost of living.
but then i've never taken anything from this system (Germany) and being self-employed means i won't get anything out of it either... i'm not entitled to any benefits the same as an employeed person is. there is no health system to speak of; if i get ill the costs come out of my pocket. i never recieved an education here yet i am paying for the education system (500€/term fees, anyone?).
yes, tax avoidance is a fine line to walk. there is being sly and then there is taking the mickey. the likes of Phillip Greene and a host of others that make their money in the UK and then just happen to not qualify for residency by one day are taking the piss, IMO.
never actually clicked it, quite surprised to be honest...well ye live and learn. but i would suggest that isn't the complete story. This thread is an example, the richer you get, the more it becomes easier to hide yer cash from the tax man.Ewan - MemberI don't know the answer. But how much, as a percentage of all pre taxable income, do the top 10% take though? I'd have a pure guess at 70/80% possibly higher? be interested if some one knew that figure..
Not wanting to point out the obvious, but that table I linked too had that information too. To answer the question, the top 10% take 33% of all pre tax income. So still seems pretty progressive to me.
The bottom 50% of taxpayers pay, for comparison, 10.8%. Seems fair enough. Those that can pay more, do.
[b]Flaperon[/b] - Member
Actually, we don't pay that much. Unfortunately what we do pay is disproportionately loaded onto the poorer in society.In my book tax avoidance = tax evasion.
Not a statement I agree with, you may feel you don't pay that much but you can only speak for yourself.
As for the second statement that's just not true. As an extension to @Ewan's post where the top 10% pay 55% of tax collected the top 1% pay 25%. The poorer in society pay a lower rate, benefit more from tax allowances and the essentials such as housing and food are VAT free. They also benefit from state services like the NHS, police and education which are paid for by others. The wealthy pay more tax, much more and they pay a higher proportion of their income.
but then i've never taken anything from this system (
You only walk on unlit streets? Etc ad nauseum...
this country is set up for tax avoiders, those of us on PAYE are taxed firstly on income, then secondly on things we buy-- 'self employed' --can be creative in their accountancy, and can claim back against most purchases.
Now big companies do this on an industrial scale, full time accountants to ensure that its all 'legal'-- oh and schooling for the rich are registered charitees, again have tax benefits-- as gore vidal noted --its capitalism for the poor, socialism for the rich....
VAT has to be the least progressive tax out there. Yeah, so-called essentials are VAT free but from a day to day perspective it unfairly penalises those least able to pay.
I'm fortunate enough to be in a position where I have a high disposable income. I'm in this position thanks to a good deal of luck and circumstance. I'm aware that my tax burden is minuscule. Would I voluntarily pay more tax? No. But I'd understand if I did.
Ironically I'm definitely in your 25% (and possibly in your 1%) but that doesn't stop me seeing how some people are struggling.
see tbh when you think about the whole tax issue is a bit of a red herring anyhow. the most important issue to look at solving is low wages and high prices for goods/services/food/housing etc. the tax system doesn't look all that bad going from that pdf. worst bit is the lower 50%'s wages, raise those and you collect more tax.
@ c-al...
nah, i willing to concede and pay for the fact that german trains run (mostly) on time and are relatively inexpensive (although even that has changed in the ten years that i've known Germany), but taxes here are high as it is and to think that i'm paying the same as - but recieve less than - your average Helmut peeves me a little.
oh, and the street lighting here is generally crap. lit roads are still dark. the Autobahns are devoid of any additional lighting (and cats-eyes and even reflective paint - a bit daunting at times when "cruising" at 200kmph). it does however mean that there is less light pollution.
Sounds like a tough life alpin.
alles ist relativ, al.... 🙂
I dont want to state the obvious, but doesn't this table..
simply refer to *income* tax.
The total tax take, as a percentage of income, should be measured using all forms of tax that someone pays directly shouldn't it?
Perhaps, the top 1% of earners pay less tax overall due to spending less on the high street, or on food, or other goods as a percentage of income.
Perhaps if wealth inequality wasn't so great, we wouldn't need such high rates of tax?
@Flapon - someone in the 1% is paying top rate tax of 45% plus 2% national insurance plus their employer is paying 13.8% employers NI - so the marginal tax take is 60%. If the person buys something with vat on it that's another 20% on the net income - so total tax take is approx 70%. Hardly miniscule. I appreciate that possibly your income is not subject to PAYE style taxes so maybe you have more ways to reduce your bill.
Re so called essentials, food, housing are vat free, NHS and education is free. So a low income person has to pay vat on clothes, booze, takeaways ....
someone in the 1% is paying top rate tax of 45%
(99 percentile £156,000)
37400 @ 20% = £7480
112600 @ 40% = £45040
6000 @ 50% = £3000
total tax = £55520 = 35.5% not 45%
I'll let other people counter the rest, it's getting late..
Disposable income.
low pay, you ave no choice, all your money pays for basics of life, high income means loads for luxury, i would gladly pay 70% tax and get by on the other 30% like richard branson
out of interest, those income:tax tables...
they're on declared income presumably so if I massage my private company accounts, maximise expenses, buy my mayfair house via the cayman islands etc and join Jimmy Carr's scheme, that all won't go down as my income ?
if all they are is bottom line net income vs income tax, aren't they meaningless ?
you getting the way it works there scaredy 😉
My my, interesting responses, odly all the people who earn lower wages suggesting its evil, all those earning higher wages saying get on with it. No jealousy at all I guess.
Its not actually my situation, just a discussion with a colleague. Said person works very hard, has studied for years to get where they are, has had no more opportunity in life than anyone else on this forum, but now at a point in their life where they can start to be rewarded fir all their hard work.
They are not breaking any rules, but want to maximise their income, and see after already having worked 80 hrs in the week, that they can work at a weekend and not have the tax man cut his £5k to £2.5k
Didn't at least one person state that they paid top rate tax and disagreed with your premise? There's nothing wrong with the situation described at all provided his spouse is qualified to be an office manager and the salary reflects the role. Is this the case?
odly all the people who earn lower wages suggesting its evil, all those earning higher wages saying get on with it
Nope not correct at all. I kept my opinion to myself regarding whether I thought it right or wrong and personally I think it is wrong to use tax dodges in this way. It may be legal but that doesn't mean I think it is right.
and see after already having worked 80 hrs in the week, that they can work at a weekend and not have the tax man cut his £5k to £2.5k
Frankly more fool them if they want to work those sort of hours.
Jambalaya - nope, PAYE here.
It's only high earners that work hard eh?FunkyDunc - Member
My my, interesting responses, odly all the people who earn lower wages suggesting its evil, all those earning higher wages saying get on with it. No jealousy at all I guess.Its not actually my situation, just a discussion with a colleague. Said person works very hard, has studied for years to get where they are, has had no more opportunity in life than anyone else on this forum, but now at a point in their life where they can start to be rewarded fir all their hard work.
They are not breaking any rules, but want to maximise their income, and see after already having worked 80 hrs in the week, that they can work at a weekend and not have the tax man cut his £5k to £2.5k
Point isn't really about the tax system, as i said, it's fair enough to be honest(although, I'd raise the tax threshold to about 15k). The moral issue comes with people earning high wages and others earning a pittance and struggling, it's not just people that earn alot that work hard you know.
Big issue that is the moral one is high earners, who set wages etc, pontificating about low earners being spongers etc, when they are generally the ones who set the wages.. Up the wages and everyone is happy, the poorer get to pay more taxes and pay their way, and people can safely earn more with alot less jealousy about...the 2 things aren't inter-connected.
fwiw i'm fairly comfortable btw, so i'm not arguing for myself here, i'm arguing for poor sods who have to live on the likes of 12/15k a year.
Quote from Kerry packer in oz. "I'll pay more tax when you can spend it properly"
Maybe government would spend it properly if they weren't being bribed by people like Kerry Packer (Costigan Commission).
80 hours a week and they're thinking of working weekends? So 5 16 hours days in the week then?!
i doubt its manual work-- looking on here takes a lot of hours up 😉
80 hours a week and they're thinking of working weekends? So 5 16 hours days in the week then?!
Used to be quite normal for me in my old job. The worst weeks were over 100 hours, which got tiresome after a while. These days I don't do as much - rarely more than 60 a week.
I look forward to the day I earn enough to pay 50% tax.
I think I'm a sucker.
Oh, and I work with one of Kerry Packer's old senior management team. I must ask him about those days at some point....