Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#1
The first indications are coming through about the impact of the 50p tax rate in the self-assessment tax paid in January.
It was expected by HMRC number crunchers, based purely on a mathematical calculation, that £1bn extra would be collected in January as a result of the 50p tax rate. What has actually happened in the real world is a reduction of £509m in this part of the HMRC income tax regime.
Treasury 'sources' said that highly paid individuals are arranging their affairs to avoid paying the 50p rate. Well surprise surprise....
Before anyone starts going on complaining about tax evasion and how terrible and nasty the well paid are for not coughing up everything the taxman asks for you should think a bit about what exactly they are doing. I can speak here from direct knowledge of what is happening though naturally I cannot reveal any identity.
Some people are not working so hard, perhaps taking an extra day off work to spend with their family. After all if you can afford it why not? Why not place quality of life ahead of earning more when HMRC take 52% of all the extra you earn (that's 50% income tax plus 2% NI). Why on earth should you bother to work longer and harder when you get only 48% of what you generate and that assumes that there are no additional costs to working. No-one will begrudge them more time with their families surely.
Other people are not going after extra contracts, some are not bothering to take risks to expand their business.
Yes, that right - avoiding the 50p rate is not all about complex (or even simple) tax avoidance schemes or even moving abroad though some will do both.
HMRC and the economy are therefore suffering twofold as a result of this 50p tax rate loonacy.
First from reduced tax revenues and that is something that will get worse with a compounding effect the longer the tax rate stays in place.
Secondly from reduced economic activity - this directly impacts on the potential for new employment growth.
The simple message is this..... those least able to afford the 50p tax rate are the poor and those dependant on benefits, jobseekers in particular.
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#2
Yea, right.
Instead perhaps tax payers in general should supplement the income of those who cannot be mentioned/
Oh!! Too late.
Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#3
What in earth are you talking about Tom?
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#4
Quite a few on the 50p rate know how to fiddle their way out of paying their due income tax.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#5
If you know who they are Alex, you should report them. HMRC have a whistleblower's line for that purpose. If you don't know who they are, you have no evidence to back up your statement.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#6
Peter, I assumed that Barry's post 1 explained the evident: over 1.5 billion pounds less came in than expected.
Is there any evidence that the total of this sum is due to people taking time off work and spending it with their family? If you cannot back this claim, Peter, that brings us back to tax fiddling suspicions.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#7
Alexander. I have said it is from personal knowledge - you know what I do for a living.
Avoiding the 50p rate is very straightforward for most people on that kind of income and they do not have to 'fiddle' to do so.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#8
I have similar evidence from a tradesman friend who declines business once he is in the 40% tax band, and goes on long holidays instead.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#9
Thats right Peter, I could (I will not, confidentiality) name at least 5 business people who do that at the 40p band. It is harder to do it at that level because the income is overall lower, much easier at the 50p level.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#10
Yes. My friend is 56, divorced, house paid for, and enjoys the open air. When I called him to do an urgent job a few weeks ago he was in the south of France skiing for a month.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 653- Registered: 13 Mar 2008
- Posts: 10,540
#11
People will always work harder if they know they can keep more of it - human nature.
Roger
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#12
Yes Roger, many people would like to earn £10 an hour, and would work hard if they got it!
Guest 653- Registered: 13 Mar 2008
- Posts: 10,540
#13
Which is what I proposed a few weeks ago Alexander - more people would (want to) work and the difference would be paid by the Government, but instead of benefits to the individual, it woud be paid to the company.
A big injection to people's disposable income and businesses benefit by their greater spending. Society in general will then benefit.
But I know I'm missing something because if it could work, it would have been thought of and implemented before now.
Roger
Keith Sansum1
- Location: london
- Registered: 25 Aug 2010
- Posts: 23,948
#14
ROGER;
I'm sure barryw would have so many issues with your view on increasing the minimum wage to "£10 an hour.
one i would be concerned of is that if you leave it business, who will police that they abide by the rules and pay the minimum wage?
ALL POSTS ARE MY OWN PERSONAL VIEWS
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#15
It would not work - Roger's suggestion would be an economic disaster. The less governments do and interfere the better. All the economic problems we have stem from governments and it is government intervention that is resulting in people being locked into low wages.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
#16
the low paid were locked into very low pay before the last government stepped in.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#17
Totally disagree Howard.
Many people take a low pay as a stepping stone and it is not necessarily a permanent thing. Now the minimum wage has created a norm that has distorted the market and removed pay competition from many occupations.
Guest 670- Registered: 23 Apr 2008
- Posts: 573
#18
Could you give us 1or 2 examples Barry?
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
#19
no employer will pay a penny more than they need to, enlightened ones that have jobs at the lower end of the pay scale pay above the minimum wage to attract quality staff.
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,948
#20
howard
thus my comments.......
roger, barryw says no
ALL POSTS ARE MY OWN PERSONAL VIEWS