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Why do papers not ask accountants

According to the Guardian this morning, talking about the BBC: "Staff on company payrolls pay up to 50% tax on their salaries and must contribute national insurance. Those paid via personal service companies set up for the recipient's benefit pay tax at 21% and are exempt from national insurance."

So they completely ignore any higher rates of taxes on dividends taken. Is this a simple mistake, which is just bad journalism, or are they lying to make some kind of political point ?

Other papers used the same example to scupper Ken Livingstone. Surely there should be some responsibility for the press to tell the truth with regards to tax, or do they just hope that 99% of people will believe what they say ?

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It's the extreme

If these people are frugal and don't take out dividends subject to tax at higher rates then they don't have to pay extra tax. They can even take out loans at low rates of interest and/or regularly dissolve companies and suffer reduced tax and live off the funds released.

I think there are so many options and possibilities journalists don't want to get bogged down in the detail.

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the whole truth

is not to be found within the pages of a newspaper. I learnt that years ago. When I see an article about a subject I (and we on this board) know about and realise how it is full of half-truths, I then think how misleading the other articles about subjects I am less informed about must be. They make stories by selecting facts. If some of the facts don't fit the story, they don't get included. And if the story doesn't fit the agenda, it doesn't even get printed.

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Headline Grabbing

If they stated that there may be additional tax on dividends etc then the headlines would not be so "Big"

and, (without being rude to others) most non accountants will believe this hype and form the "lynch mob" the press are hoping for without understanding it

It is clever journalism or should I say poor (a bit like the drama over 50% tax when no journalists reported the 60%/62% effective tax on earnings between 100k and 115k - I still have clients today who knew nothing about this {they didn't read my emails on teh subject either!})

And we won't even talk about the 100% effective tax on those earning above £50k and have 8 children......... :-)

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Honesty is a rare commodity these days

Some suppliers have similar sales tactics. They omit some vital piece of information that would reverse your decision to buy.

 

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Money for NO FACTS

;

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Today programme

On the Today programme this morning, they had an interview with someone (Chairman?) from CIOT who gave a very reasoned explanation, even mentioning IR35 a few times.

So, the message would appear to be - get your news from BBC Radio 4 or Private Eye, but not from the Guardian.

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Radio v newspaper

Euan MacLennan wrote:

On the Today programme this morning, they had an interview with someone (Chairman?) from CIOT who gave a very reasoned explanation, even mentioning IR35 a few times.

So, the message would appear to be - get your news from BBC Radio 4 or Private Eye, but not from the Guardian.

I suppose the main difference is due to the medium.

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They are all at it!

Euan MacLennan wrote:

On the Today programme this morning, they had an interview with someone (Chairman?) from CIOT who gave a very reasoned explanation, even mentioning IR35 a few times.

So, the message would appear to be - get your news from BBC Radio 4 or Private Eye, but not from the Guardian.

......or the Telegraph! It was their front page headline yesterday with identical numbers.

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.

I used to have a jorno ring me to "check facts" as I acted for a friend of his.  Given the poor nature of most stories I didn't actually mind, as I find one bad article in the Times and you used to get 3 or 4 calls about it on the Monday.

Invariably they would try and put words into my mouth that I wouldn't say. Or I would give a long answer, and they would come back with "so would you say that...." and i would say "no, its not that simple". But they would go with it anyway.

In the end I got fed up with it, and asked for it to be done properly, in writing, and they could quote my name if I got to agree the article but I would need to be paid. At which point *poof* into the night, never to be heard of again. 

There was never a feeling of trying to get to the bottom of anything truthfully, or to get anything right, just an attempt to make a headline, which of course is their job.  Its was quite insightful in terms of how little they knew about the subject. Didn't stop them writing about it however.

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Someone from the CIOT - John Whilting

He's the Policy director. I thought that he did a fine job of explaining it on R4 today. I must admit when I heard the presenter today discussing the civil service/BBC off-payroll/IR35 issue I braced myself with the prospect of more journalists getting it wrong and so it was rather a pleasant surprise to find that they got it so right, John to explained the case so well.

Sadly for us we are all "bean counters" in the eyes of most papers and so our lowly opinon does not count.

Probably about time that IR35 was binned though. It is way to costly too enforce it.

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BBC

I too heard John Whiting on Radio 4 this morning and like Nichola, I agree he made a good job of explaining IR35. The trouble is, that at this point it starts to get complicated and neither Radio 4 or Radio 5 presenters want anything other than an easy soundbite, and could not seem to understand personal service companies/self employment/IR35.

It's even more indicative of sloppy practice when you think that the BBC could presumably have got someone in from their in house tax department to explain everything, at no cost to the BBC, off air to a researcher and then the presenters could have been properly briefed.

(On second thoughts if there is still an internal market at the BBC they probably do think that there is a "cost") 

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and another thing ....

... while we're talking about the Today programme on Radio 4. It always irks me if they get John Humphries to interview the Chancellor / his shadow, rather than Evan Davis.

Probably like a lot of people on here, I know a bit more about economics than most people. As it turns out, it appears I know more than JohnH because he never quite seems to understand the subject properly. Inflation/rate of inflation increases/PSBR/public debt/wealth/income - it all becomes a horrible mish-mash.

Just let Evan Davis do the economics interviews, he brings far more clarity and light to the subject than JohnH. Understandable I suppose as he is an [deleted] economist.

End of rant!

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Trained?

What training can anybody get in economics?

I do agree that his academic and work experience make him qualified and a good choice but it's not like the training that an accountant, lawyer or doctor receives.

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"Probably about time that IR35 was binned though."

... and the 100,000 umbrella company users won't be incorporated as PSC's by Monday lunchtime after the announcement? The value of IR35 is in the deterrant value. The OTS report on it is illuminating.

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Surely

the most germane point that nobody has actually mentioned here is that the whole thing is mainly driven by the government via employers NIC. Do away with this and the driver to use service companies will be largely removed.I don't suppose anyone in the Treasury or HMRC will have the guts to mention this point.

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Report on BBC website by ACCA regarding PSC's

I read with interest a recent article on the BBC's website (http://www.bbc.co.uk/news/business-19846152) regarding the benefits or otherwise of PSC's

With the recent furore over this issue the ACCA has put some figures to the taxation applied to income through PSC's Vs PAYE

After reading the article I attempted the calculations myself and couldn't make my figures match those from the ACCA.  From my calculations, based on a gross income of £200,000 a PSC has a lower tax burden than income though PAYE - based on the same assumptions as the article.

I calculate that the tax and NI due via PAYE would be £85,463 whereas tax due if all income was taken as dividends from a PSC would be £74,044.

I feel that I have applied the correct treatment to the income in both cases but I am happy to be corrected.

Please could anyone let me know whether my calculation or the ACCA's is correct?

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What about ...

salary at maximum without NIC, maybe travel in the short term and, admittedly, only a small amount, of use of home as office?

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