I really think this “not your” money point is a total red herring.

It shouldn’t be your money. If you are basing yourself offshore to evade tax, then you’re stealing the government’s money. No?

It’s not the governments money. It’s the rent you receive from supplying your factor of production (your labour). From YOUR money you pay directly and indirectly for services received – for government services this is typically isn’t the form of a tax. The governments are responsible to us for allocating resources that are better supplied by them in an efficient manner. We are on a slippery slope if we let them ignore that responsibility and assumed that the factor rent (wages) is automatically their’s. It isn’t.

From YOUR money you pay directly and indirectly for services received

No, that’s paying for services – completely different to taxation.

We are on a slippery slope if we let them ignore that responsibility and assumed that the factor rent (wages) is automatically their’s.

That doesn’t follow on from my point at all.

Oh dear….

Oh dear yourself.

I don’t buy at all the concept that tax is money you never had

It’s never seemed all that conceptual to me when on PAYE.

To come back to the “employee tax” thing, employers deduct the taxes and simply pay you the net amount of your salary – their payment to HMRC can be almost a month later (or in some cases only quarterly).

EDIT: just a further note on “your” money, if you are set up as a business and receive a fee for the work/service then it’s very much your money

In fact you’ll find that it’s your business which receives a fee, and your business’ money. If you want to convert it to your money then either (as you point out) you have to reside offshore (in which case this discussion doesn’t really apply) or you have to pay your taxes.

Now now boys. Calm down. Heres a picture of some kittens….

Awwwwwwwwwww

Actually here’s another one for you. When your mum dies and leaves you £1 million, whose money is the inheritance tax?

Are they checking what size wheels we’re using if we’re using 650B wheels, binners?

Aracer – still a few minutes left to edit the question appropriately

Sorry, done

😀 😀

Good priorities!

jambalaya – Member

I don’t buy at all the concept that tax is money you never had, it is absolutely a deduction from your salary.

Not mutually exclusive.

You have the obligation to pay tax to the government. It’s your money paid to you by your employer from which you make a payment to the government. In the UK under PAYE that happens immediately. If you are self employed there will be a delay and indeed some uncertainly about how much you might pay based upon offsetting allowances/expenses. If you are in Singapore (excuse me using the example yet again) you get paid gross (no deductions) and you pay the government the tax upto 18 months later.

It’s your money, you are obliged to pay some of it to the government.

@aracer, on the IHT the government requires the estate to pay tax, so the money is taken before you receive it. Generally in a will you leave people amounts or percentages of the estate net of taxes and expenses.

@binners, are those your kittens or do some belong to the government ?

From a technical perspective, tax on your salary is borne by you the employee i.e. it is your liability – PAYE is a collection mechanism as are VAT and withholding taxes. Companies are merely acting as unpaid agents of the government.

They never belonged to Binners but he paid for them

if you are set up as a business

bit confused there, mate – think you’re trying to say if there is a company owned by you is in the mix…

@kona just an example to try and show that if you are doing work and being paid for it that the money is yours in return for the job done. You may be PAYE, you may be setup as a company. In the latter case tax is paid later and the amount can vary a lot depending upon offsets. Posters here have tried to argue that as PAYE is taken “at source” ie immediately somehow you should think of that as never having been your money.

if you are doing work and being paid for it that the money is yours in return for the job done

No it’s not. You’re never entitled to it – so the actual flow of cash is irrelevant.

Your employer offers you a compensation package for the work you do. This has a given value, and it’s not all cash of course. You assess the value to decide if it’s worth it. It’s value to you is NET of tax, and you know this up front. You never get the tax money, and there aren’t any circumstances in which you get to keep it, so it’s never really yours.

If someone offers you a £48kpa job, do you think ‘oh great, £4k per month!’ then grumble and complain when some gets taken away? If you do, you’re an idiot. The sensible thought is ‘Oh great, £2,915.14 per month!’

molgrips – that is absolute rot, how much tax you pay is determined by your personal circumstances, some of these may be reflected in your personal tax code so your employer will reflect them at source, others will not. Your employer will not reduce your gross salary because your tax code means you get a higher net salary than they anticipated nor will the reverse happen if you have a zero code.

Yes technically there are differences, but you know your own tax code, so you know what your own take home would be. The point is that why would you ever look at the gross figure other than for comparison purposes?

It’s like buying a car and being all upset when it doesn’t get the government fuel test figures when you drive it.

It’s money that you’re not entitled to. End of.

If I make charitable donations I’m entitled to it, if i pay qualifying interest I’m entitled to it, if I make losses on unquoted shares I’m entitled to it … do you want me to go on there are plenty more?

FFS no I don’t, cos it’s not relevant. The exact figure is not important in this particular argument.

@molgrips – my employer paid me the same money for the same job in London vs Singapore (and would have done had I gone to Dubai) – tax rates are roughly 40%, 20% and 0% respectively. Also see my example of getting paid via a service business or via paye. Your payslip says deductions for a reason.

Of course its relevant, it just rather inconvenient because it proves the point that you were making is a load of baloney. It is quite clear that money collected through PAYE is money you can become entitled to, so to suggest it is never yours is simply wrong.

Just to follow up on @mefty’s comment HMRC have just admitted they go tax calc’s wrong twice for many.

So @molgrips if the government puts up taxes you get a paycut, it’s like your contract of employment was changed by a third party ?

Your employer offers you a compensation package for the work you do. This has a given value, and it’s not all cash of course. You assess the value to decide if it’s worth it. It’s value to you is NET of tax, and you know this up front. You never get the tax money, and there aren’t any circumstances in which you get to keep it, so it’s never really yours.

If someone offers you a £48kpa job, do you think ‘oh great, £4k per month!’ then grumble and complain when some gets taken away? If you do, you’re an idiot. The sensible thought is ‘Oh great, £2,915.14 per month!’

Do income tax changes affect your gross or net wages?

If taxes goes up, does the difference come out of your employers pocket or your take home pay?

Thats the flaw in your argument…

(edit, I see Jambalaya’s thought processes were going along similar lines before I refreshed)

molgrips seems a thoroughly decent and smart fellow, I can only assume someone has hacked his account and is posting this

😆

Is tax optional?

Is tax optional?

Yes, you can opt out of paying tax by giving all your income save the amount covered by the personal allowance to charity. There are people that do this.

EDIT: Actually I am not sure you can do this anymore, as some avoidance schemes were artifically using charitable giving.

There is a limit of £50,000 of deduction so it is only optional to those earning less than £60,000.

or put it into your pension, thereby reducing your income tax

or you could use it to set up a second career, (for example possibly building it for the first couple of years whilst incurring significant losses, which can be written off against your main job to reduce your taxable income)

or become a shareholder or director of your company and receive dividends instead of a salary

etc.

The limit still applies to pension contributions and losses. (It is actually £50,000 or 25% of income, so the latter limited will always mean you are paying tax.)

if you are doing work and being paid for it that the money is yours in return for the job done. You may be PAYE, you may be setup as a company. In the latter case tax is paid later and the amount can vary a lot depending upon offsets.

Not really – if it’s a company that has performed the work, the money is not “yours”, it is the company’s (the company of course being a different person to you). This is why the person I was responding to is confused.

I really need one of those facepalm images to post here.

The second-most spoken primary (Belgian) language, used natively by almost 40% of the population, is French 😛

I really need one of those facepalm images to post here.

It would be pointed back at you – you and the other guy are trying to be pedantic about whose money it is, and then totally overlooking whose money it is when you bring another person into the arrangement. You’re trying to engage in half-baked smartarsery.

We are not being pedantic. Your wages are 100% your money. End of story.

Except for the bit you don’t get to keep.