Does Anybody Not On PAYE

Actually pay anything close to what they are supposed to?

 

It more a case of what you can legally claim for which most people on PAYE don't know they can.

There's loads of things you can claim as a business expenses.

I have been employed, self employed and also worked via agencies with Umbrella Company's which is sort of half- way between PAYE and self employment.

 

Doubt it...but 99% of them will call people on benefits scroungers.

 

You can't claim business expenses if you are employed though. You don't own your own business. PAYE is operated by your employer and you have no control over it.

There's reems of legislation and HMRC guidance on what are allowable business expenses. You need to keep records of these business expenses in the case of enquiry and if you don't pay the correct amount of tax you'll get interest and penalties.

 

Yes 100% with no attempt to avoid anything. Taxes we pay are based on or ability to pay and contribute to the infrastructure of our country. Anyone who avoids them is part of the problem not the solution.

 

Yes but... there's a big difference between hanging onto what you've earned and sticking your mitts out for a slice of what someone else has earned.

 

And why shouldnt they? These people are going out grafting for their money not sat about and calling at the job centre every thursday or whatever day.

You cant tell me you wouldnt claim for everything you could in that position.

 

I don't know any one that does, more like they tell their accountant how much they want in refund and he sorts it for them. How many times you hear self employed people say "it's okay I'll put it through the books" when buying stuff that's nowt to do with their employment. Uniform allowance, fecking hell, what about one for suit allowance that l have to buy to wear to work??

 

Because nobody with an ounce of decency should call someone a 'scrounger' for receiving benefits.

 

Why not? There are plenty of scroungers about in modern society. But then again, thinking about it what an odd angle you came at that with...

 

HMRC just don't have the resources to look into everyone's tax return. There are strict rules about what you can and can't claim deductions for. It's just a lot of people don't understand/don't stick to them.

 

You can claim business expenses even if you are employed, as long as they are legitimate expenses.

For instance I need to be a member of a professional body to do my job and I claim back the cost in my tax return I do each year even though I am paid through PAYE. As long as you can give a reasoned argument that the cost is integral to your job you can claim.

There is also the claim of extra fuel costs. If you do business mileage but own your own car then you can claim 45p a mile (at the moment) so if the company you work for pays you only 30p per mile you can complete a business mileage form and claim back the extra 15p from HMRC.

I also claim back for business calls on my own mobile phone, I am not provided with a works mobile but I do use my own phone on a regular basis so I keep a log of the calls, what they are for so I can back up the claim. I then claim back the cost of these on my tax return.

Even if you are employed you can request to complete a tax return, most people do not know this, and with the new online system it is getting much easier to complete a return.

 

You can claim it as a deduction so you have less taxable income but you can't claim the whole cost back. Otherwise why would your employer ever pay you business mileage if it knows the government will for you?

 

Correct. The difference between what the HMRC rates are and what your employer pays is treated as a business expense so you effectively get the tax back on the difference, not the full amount. However, I am still not sure why the IR allow employers to pay mileage at sub standard rates and have the difference claimed back against tax like this. My previous employer only paid 18ppm, so 22ppm was going on our tax return. It used to be worth nearly a grand a year off my tax bill. I don't understand how they get away with that.

 

I've done some Contract Software development through my Limited Company and the only tax breaks I've had is making a little bit on VAT (I charge 20% and pay HMRC 15% it's called Flat Rate VAT), and I don't pay National Insurance but that's because I've got 39 years NI contributions so I only pay myself a dividend. Dividends are tax-free up to the higher rate level of income, however I pay 20% Corporation tax on all my profit (which is all my earnings, there's no tax allowance on Corporation tax). I'd say I come out slightly better than PAYE (because of the VAT and NI) but not by much.

 

When I was made redundant a couple of years ago I was thinking of going into contracting in IT, so essentially setting up as a limited company.
One thing that got me, that showed why people end up setting up a company then paying a small salary but larger amount in dividends (lower tax) was the NI rules.
Essentially, I wanted to just set up, pay the money to myself as salary and pay the goings rates of tax as I would under PAYE, I wasn’t interested in what I could claim for, or avoid tax etc.
But the NI regulations were the most interesting, as I would have had to pay both employers and employees NI, so paying twice, I would be penalised essentially for doing the right thing.

 

Dividends not tax free from 6th April 2016

Now 7.5% on dividends over £5,000 pa and taxed at 32.5% on higher rate income with out any tax credit which used to reduce the rate to 22.5%

If you pay yourself a salary of £8,060 pa this is deducted from CT profits and uses most of your personal allowance.

Contractors in personal service companies should also be very wary of the intermediaries legislation (IR 35)

 

No there isn't. They're both robbing from the public purse - it's just that one is taking out and the other one's not putting in.

 

This absolutely. If you avoid tax you are stealing from everyone n a cod calculating way.

 

No you're not. Avoidance whether morally reprehensible or not is legal. Tax evasion is illegal.