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The Rich Get Richer and the Poor.....

pin2011
Grafter
Posts: 109
Registered: 09-06-2011

The Rich Get Richer and the Poor.....

So the mighty chancellor Osborne has suddenly discovered that his friends in high places are not paying their fair share of taxes.
Why should that be a surprise when he is one of them that is avoiding tax on money from the family business etc?
Wink
27 REPLIES
Community Veteran
Posts: 5,472
Thanks: 288
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Registered: 11-08-2007

Re: The Rich Get Richer and the Poor.....

Osbourne unveiled as "Director of Fear"
He is already talking about putting in a heart rate monitor record just how scary it is.
Looks like both jobs are having a similar outcome !  Undecided
Community Veteran
Posts: 18,551
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Registered: 12-08-2007

Re: The Rich Get Richer and the Poor.....

Quote from: codfanglers
Why should that be a surprise when he is one of them that is avoiding tax on money from the family business etc?
Wink

Do you have evidence of this or is it just prejudice Undecided Undecided
itsme
Grafter
Posts: 5,924
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Registered: 07-04-2007

Re: The Rich Get Richer and the Poor.....

Normal advice from accountants with family run limited companies will be to draw a liveable wage paying normal income tax and National Insurance and then draw your extra disposable income as a dividend which carry a lower tax.
Community Veteran
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Registered: 12-08-2007

Re: The Rich Get Richer and the Poor.....

so quite legal then Wink
Credit to Osbourne for attempting to deal with some of our tax abnormalities.  Don't remember the last bunch of incompetents doing anything Undecided
itsme
Grafter
Posts: 5,924
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Registered: 07-04-2007

Re: The Rich Get Richer and the Poor.....

Yes legal and I have not got a problem with it so can't understand all the fuss with Ken Livingstone. If they were only paying themselves a pittance then drawing a large amount as a dividend then it's a blatant tax avoidance. A few years ago HMRC were targeting directors that  were doing this. 
Community Veteran
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Registered: 12-08-2007

Re: The Rich Get Richer and the Poor.....

Much of the money retained in small companies allows the company to invest in future development.  Many companies do not pay it as dividends.  This is good for the company and its employees.
In Livingstone's case there can be no reason for his actions except to avoid tax.  On his radio show he said he would stop the practise - if he becomes London Mayor.  He would not commit to his action if he lost the mayoral election.
itsme
Grafter
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Registered: 07-04-2007

Re: The Rich Get Richer and the Poor.....

I would say that any company that has only the husband and wife as directors would be paying dividends.
itsme
Grafter
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Registered: 07-04-2007

Re: The Rich Get Richer and the Poor.....

Quote from: artmo
In Livingstone's case there can be no reason for his actions except to avoid tax.  On his radio show he said he would stop the practise - if he becomes London Mayor.  He would not commit to his action if he lost the mayoral election.

Probably due to the fact that if he become Mayor he will be barred from doing media work which at present is the income that is going through the limited company.
Community Veteran
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Registered: 21-03-2011

Re: The Rich Get Richer and the Poor.....

I've voted for Ken Livingstone as Mayor in the past, however I have a reasonable memory of his performance in office. There was an awful lot of cronyism where self seriving idiots were put in charge of important departments, there was also the debacle of the mobile roadblocks called "Bendy Buses" introduced by Ken. He failed to control Transport for London which is very poor value for money, who halved the road capacity of London by indiscriminate Bus Lanes.. He was in the process of changing the sensible Congestion Charge into an envy tax in which people owning larger engined cars were to be taxed on their potential for pollution (a national government issue) rather than actual congestion caused. His process of soaking the rich was beginning to reach down to normal people in his money grabbing schemes. Now in a frivilous attempt to buy votes he proposes to fritter away the money saved for investment in the transport infrastructure by introducing some bus fares cuts (they'll creep back up if he's ever elected).
Ken used to have entertainment value, but unfortunately Boris Johnson is not only entertaining but seems to be doing a good job.
Now Zen, but a +Net residue.
itsme
Grafter
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Registered: 07-04-2007

Re: The Rich Get Richer and the Poor.....

Boris been good for London Transport?
Community Veteran
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Re: The Rich Get Richer and the Poor.....

Quote from: itsme
Probably due to the fact that if he become Mayor he will be barred from doing media work which at present is the income that is going through the limited company.

No so, Boris still contributes a weekly column for the Spectator.
Boris has done a good job for London.  Ken didn't do anything for the outer boroughs.
Community Veteran
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Registered: 12-08-2007

Re: The Rich Get Richer and the Poor.....

Quote from: itsme
I would say that any company that has only the husband and wife as directors would be paying dividends.

I think you will find this is incorrect.  It's the smaller businesses that tend to plough everything back into the business, certainly for the first few years of start-up. 
itsme
Grafter
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Registered: 07-04-2007

Re: The Rich Get Richer and the Poor.....

Then my friends were given the wrong advice to setup a limited company pay themselves a minimal amount and take out dividends to get a living wage. And this was the setup that HMRC was trying to stop.
tinto
Grafter
Posts: 262
Registered: 21-11-2010

Re: The Rich Get Richer and the Poor.....

Quote from: artmo
Quote from: codfanglers
Why should that be a surprise when he is one of them that is avoiding tax on money from the family business etc?
Wink

Do you have evidence of this or is it just prejudice Undecided Undecided

After the budget he claimed his annual income was such that  he wasn't liable for the 50% tax rate he'd just abolished, but make an educated guess based on the following information which is all in the public domain
1)  his annual salary as  Chancer at the Exchequer left him around £15,000 below the aforesaid 50% tax rate
2) he has  rent free accommodation in Downing St, and is able to rent out the family home  in Notting Hill (it isn't a bedsit)
3) he has another home in his constituency valued at £600,000
4) he has a 15% share in the family business valued at £4M