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Adopt the Irish model
From my understanding there is no employers NIC type liability on payments made to directors and controlling shareholders In Ireland and hence no tax saving between paying out salary or dividends from an Irish company. It's kind of like a reward for running your own company, as the money is yours.
Hence they don't have this crazy system with upteem layers of complexity.
Maybe the 'tax simplification' people could knock some sense into HMRC and seriously look at changing the whole tax system so it rewards people who genuinely run their own company.
IR35 was such a bad idea and rather than abandon it and introduce a simple 'employment' test along with using the GAAR they keep wanting to throw more legislation at it.
irish model-nhs and employers' NIC
The irish dont have the NHS so where-ever possible flock to the north to claim some connection with the uk along with so many other "health tourists" who come here and receive the luxury of our NHS...
(never mind all the young girls who have to come here to get a termination)
This is paid for by NIC but to make NIC costs for small employers LESS is a 1/2 way house measure- we should be removing the cap on NIC after all there is no cap on income tax. is there?
tinkering thats all the budget did....
"From my understanding there is no employers NIC type liability on payments made to directors and controlling shareholders In Ireland and hence no tax saving between paying out salary or dividends from an Irish company. It's kind of like a reward for running your own company, as the money is yours.
Hence they don't have this crazy system with upteem layers of complexity.
Maybe the 'tax simplification' people could knock some sense into HMRC and seriously look at changing the whole tax system so it rewards people who genuinely run their own company.
IR35 was such a bad idea and rather than abandon it and introduce a simple 'employment' test along with using the GAAR they keep wanting to throw more legislation at it".
Knocking sense into the right party
Interesting idea Ian, but the government of the day is the only one that can change the tax system. HMRC simply does as successive governments bid.
We seem to have a "grass is always greener" view of the Irish tax system. Perhaps that's justified although my only recent experience of it involved family members paying capital acquisitions tax of nearly €26k on inheriting an estate worth about €185k. Be careful what you wish for!
employees Nic
dont foirget that.....
All it means is Directors salaries go up to the tax free band as ees ni is less than CT
come guys keep up
Ian's suggestion is interesting ...
... but if I was in Government I would chose to level the playing field the other way by introducing NICs on small/close company dividends!
@kevinringer
But why
Small companies are the life blood of this country. If you tax dividends as employment income you remove any incentive to take risk.
The incentive to take risk is embedded in the large fees charged by the business for the service.
If you can't get those larger fees, then you need to get a proper job.
what paul johnston said
If I thought I had to pay 45.8% tax ie it +ers nic +ees nic at the low rate and then 55.8% at a higher rate rather than the 20% that I pay now, I wouldn't bother
a) Working past 4.30
b) Acquiring other firms of CAs
c) Employing staff
Indeed, All I would do is build up tiny firms of CAs over a 1 year period and sell them to you boys and pay 10% CGT until I had used up my £10 m ER allowance, well either that or retire