Diego_Sideburns Posted February 2, 2012 Share Posted February 2, 2012 George Osborne has ordered a review to look into whether or not the 50p tax rate is justified by the amount of extra revenue it generates, saying "inefficient" taxes are pointless. Danny Alexander says a 100-strong "affluence team" is going to make sure the 350,000 people in the UK whose personal wealth is more than £2.5m, and who qualify for the controversial 50p top rate of tax on income over £150,000, are paying up. He insists that everyone should pay "the right tax", and that tax avoidance, while legal (unlike tax evasion) is wrong. The same Danny Alexander agreed a deal in which the Chief Executive of the Student Loans Company is paid as a firm, not as an individual, allowing him to pay less tax. His package totals £182,000, and his salary is paid gross to his private service company, liable for corporation tax at 21% rather than income tax, with minimal national insurance. This hasc potential savings for him of about £40,000 a year, compared to if he had been rightly treated as a public sector employee. The Department for Business, Innovation and Skills describes the arrangement as “tax efficient”. He also receives £550 a week to pay for his travel and living expenses, to cover his costs of getting to the company’s offices in Glasgow. An urgent review is to find out out how many other public sector appointees are being paid through an agency by a personal service company. All of us being "in this together" seems to mean that we taxpayers are paying the state to negotiate a deal for a very highly-paid official to avoid tax. To add insult to injury, the man who has got this deal is pursuing students in the UK to make sure they pay back every penny of their student loan. Quote Link to comment Share on other sites More sharing options...
jimsleftfoot Posted February 2, 2012 Share Posted February 2, 2012 (edited) George Osborne has ordered a review to look into whether or not the 50p tax rate is justified by the amount of extra revenue it generates, saying "inefficient" taxes are pointless. Danny Alexander says a 100-strong "affluence team" is going to make sure the 350,000 people in the UK whose personal wealth is more than £2.5m, and who qualify for the controversial 50p top rate of tax on income over £150,000, are paying up. He insists that everyone should pay "the right tax", and that tax avoidance, while legal (unlike tax evasion) is wrong. The same Danny Alexander agreed a deal in which the Chief Executive of the Student Loans Company is paid as a firm, not as an individual, allowing him to pay less tax. His package totals £182,000, and his salary is paid gross to his private service company, liable for corporation tax at 21% rather than income tax, with minimal national insurance. This hasc potential savings for him of about £40,000 a year, compared to if he had been rightly treated as a public sector employee. The Department for Business, Innovation and Skills describes the arrangement as tax efficient. He also receives £550 a week to pay for his travel and living expenses, to cover his costs of getting to the companys offices in Glasgow. An urgent review is to find out out how many other public sector appointees are being paid through an agency by a personal service company. All of us being "in this together" seems to mean that we taxpayers are paying the state to negotiate a deal for a very highly-paid official to avoid tax. To add insult to injury, the man who has got this deal is pursuing students in the UK to make sure they pay back every penny of their student loan. Contractually, this has issues. It's not my area of expertise but there are rules that mean companies have to distinguish between employees and contractors. If someone who should be an employee is treated as a contractor where they shouldn't, the tax man tends to not like it. In this situation it seems amazing that you can have a Chief Executive who is not an employee i.e a CE normally controls the company but the company has limited control over him. Though if he doesn't do his job correctly, the Student Loans company could sue his company for breach of contract - though they probably haven't got a contract in place knowing this shower.... Edited February 2, 2012 by jimsleftfoot Quote Link to comment Share on other sites More sharing options...
beag_teeets Posted February 2, 2012 Share Posted February 2, 2012 Well I for one am shocked by this turn of events. Quote Link to comment Share on other sites More sharing options...
24hoursfromtulsehill Posted February 2, 2012 Share Posted February 2, 2012 This has been in the pipeline for a few weeks. Labour Members have asked each Government Department whether any senior civil servants or staff employed by executive agencies (NDPBs, including the Student Loans Company) are paid via "companies" (ie: as contractors). There might be more to come. Tony Blair (no longer a public employee) and David Miliband (still an MP) have similar tax-avoiding arrangements. Most of the Cabinet and a good number of junior Ministers (as per the ministerial code) have their holdings in "blind trusts" and pay companies tax. The real scandal is the big companies avoiding tax. If they paid what they should, there'd be no talk of deficits or debt. Simple as that. There's a great blog on tax avoidance and related issues. I'd encourage everyone to make it their home page, or at least to read it once in while. http://www.taxresearch.org.uk/Blog/ Quote Link to comment Share on other sites More sharing options...
Roger Ritchie Posted February 2, 2012 Share Posted February 2, 2012 We need taxes that will generate money. I propose a 'like' tax. Everytime the word like is used out of context £1 must be paid. For example: 'I was like so mad that he like just like pulled his pants up and walked off!' Would generate £3 Quote Link to comment Share on other sites More sharing options...
beag_teeets Posted February 2, 2012 Share Posted February 2, 2012 We need taxes that will generate money. I propose a 'like' tax. Everytime the word like is used out of context £1 must be paid. For example: 'I was like so mad that he like just like pulled his pants up and walked off!' Would generate £3 I'm now concerned that this is where your mind went to for an example! Quote Link to comment Share on other sites More sharing options...
Stevie_J Posted February 2, 2012 Share Posted February 2, 2012 We need taxes that will generate money. I propose a 'like' tax. Everytime the word like is used out of context £1 must be paid. For example: 'I was like so mad that he like just like pulled his pants up and walked off!' Would generate £3 Scores of people would starve throughout the North East of England. Quote Link to comment Share on other sites More sharing options...
leeslover Posted February 2, 2012 Share Posted February 2, 2012 What is often called, "tax avoidance," could equally be called, "abiding by the rules." Quote Link to comment Share on other sites More sharing options...
jimsleftfoot Posted February 2, 2012 Share Posted February 2, 2012 (edited) What is often called, "tax avoidance," could equally be called, "abiding by the rules." Quite..... Tax avoidance = Legal BLURRED LINE Tax evasion = not There is quite a bit of anti-avoidance legislation though, to try and stop companies/people avoiding tax by doing something, if the avoiding tax was the only point of doing it. Edited February 2, 2012 by jimsleftfoot Quote Link to comment Share on other sites More sharing options...
rudemedic Posted February 2, 2012 Share Posted February 2, 2012 He's now to pay his tax from source http://www.bbc.co.uk/news/uk-politics-16854187 Quote Link to comment Share on other sites More sharing options...
leeslover Posted February 2, 2012 Share Posted February 2, 2012 The real scandal is the big companies avoiding tax. If they paid what they should, there'd be no talk of deficits or debt. Simple as that. Or, to put it another way, the country would be in a better place if we levied £127 billion of new taxes on businesses. That's one way to grow our way out of recession. Quote Link to comment Share on other sites More sharing options...
Stevie_J Posted February 2, 2012 Share Posted February 2, 2012 Or, to put it another way, the country would be in a better place if we levied £127 billion of new taxes on businesses. That's one way to grow our way out of recession. Unless those businesses decide they're better off elsewhere. Quote Link to comment Share on other sites More sharing options...
24hoursfromtulsehill Posted February 2, 2012 Share Posted February 2, 2012 Unless those businesses decide they're better off elsewhere. Quote Link to comment Share on other sites More sharing options...
oafc0000 Posted February 2, 2012 Share Posted February 2, 2012 (edited) Contractually, this has issues. It's not my area of expertise but there are rules that mean companies have to distinguish between employees and contractors. If someone who should be an employee is treated as a contractor where they shouldn't, the tax man tends to not like it. In this situation it seems amazing that you can have a Chief Executive who is not an employee i.e a CE normally controls the company but the company has limited control over him. Though if he doesn't do his job correctly, the Student Loans company could sue his company for breach of contract - though they probably haven't got a contract in place knowing this shower.... IR35 brought in by Tony Blair in 2001 to tackle contractors that where in fact "disguised employee". There are basically a couple of tests to decide if you are a "disguised employee" or in fact an actual genuine business. Are they Controlled by the client Mutuality of obligation Are they in business in their own right Are they Part and parcel of the company Do you have a right of substitution There is actually more to it but fall foul of this and you could be liable for a :censored: load of tax. It largely a :censored:ing awful piece of legislation and the tax man has had real difficultly in winning cases. Mainly because most people they attack are in fact "in business". What it did do though is scare a lot of "disguised employees" into using umbrella companies. Edited February 2, 2012 by oafc0000 Quote Link to comment Share on other sites More sharing options...
jimsleftfoot Posted February 2, 2012 Share Posted February 2, 2012 (edited) I have particular disdain for the 'tax protestors' who invade Topshop etc, yes there may be a case for the likes of Arcadia to pay more tax, but lets remember they employ lots of people who pay taxes in their own right and also spend money to keep the economy going. Edited February 2, 2012 by jimsleftfoot Quote Link to comment Share on other sites More sharing options...
24hoursfromtulsehill Posted February 2, 2012 Share Posted February 2, 2012 (edited) Unless those businesses decide they're better off elsewhere. They're free to leave any time they like. Off ye go lads, see how you get on in one of those tax-friendly kleptocracies everyone raves about. Edited February 3, 2012 by 24hoursfromtulsehill Quote Link to comment Share on other sites More sharing options...
opinions4u Posted February 2, 2012 Share Posted February 2, 2012 I'm all for a £20,000 personal tax allowance and a flat rate of income tax of 25% above this threshold. The only exception to this rule would be Premiership footballers who I would tax at 99.5% on any earnings above £100k a year. Distributing 50% of the proceeds to lower league clubs and reintroducing free meals on wheels for Grannies. Vote for me! Quote Link to comment Share on other sites More sharing options...
joe_lead Posted February 8, 2012 Share Posted February 8, 2012 Sounds like a master stroke to me as long as his 'firm' bears the cost of all his defective work and errors as is required under IR35 principals. Should save the Taxpayer £Ms. I'd be checking the small print of my liability insurance if I was him. Can't see how he can perform as CEO if he is not integrated into the organisation. Quote Link to comment Share on other sites More sharing options...
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