My contribution was not intended to be a direct response to your piece.
I was merely suggesting that there is no basis for the company owner to expect his/her tax rates to be lower than those applying to the sole trader or partner.
Why should earnings be taxed as investment income?
Why should company owners pay less tax than sole traders and partners making the same 'business profit'?
How many people would work full time in a business, and take all the risk, for a salary of £8,000?
How many people would expect an annual dividend of £30,000 on their £1 share?
The whole arrangement has been legal tax avoidance.
I do not believe this is totally unexpected - an 'NI surcharge' (or equivalent) on owner managed company dividends has been spoken about for years.
Whilst not directly related to Class 4 NI (which is only another tax, anyway) this new treatment does restore some sort of balance (arguably not enough - so "yes" things may get 'worse').
Sole traders and partners pay their tax as they earn their profit, have the same problems as company owners, but do not have limited liability, and cannot shelter income for drawing in later years.
At the end of the day these dividends and capital distributions are earnings.
The only real surprise is that the Conservatives have done it rather than the successive Labour governments which allowed it to flourish.
Not in business? I am sure that David must be correct about HMRC not being 'in business' and therefore not being regulated, but if they have 'customers', must they not be 'in business'? If not, what are they?
My answers
Who in their right mind would phone a help line if the answer was on-line? The helpline is the last port of call not the first.
Apologies
My contribution was not intended to be a direct response to your piece.
I was merely suggesting that there is no basis for the company owner to expect his/her tax rates to be lower than those applying to the sole trader or partner.
An alternative view
Why should earnings be taxed as investment income?
Why should company owners pay less tax than sole traders and partners making the same 'business profit'?
How many people would work full time in a business, and take all the risk, for a salary of £8,000?
How many people would expect an annual dividend of £30,000 on their £1 share?
The whole arrangement has been legal tax avoidance.
I do not believe this is totally unexpected - an 'NI surcharge' (or equivalent) on owner managed company dividends has been spoken about for years.
Whilst not directly related to Class 4 NI (which is only another tax, anyway) this new treatment does restore some sort of balance (arguably not enough - so "yes" things may get 'worse').
Sole traders and partners pay their tax as they earn their profit, have the same problems as company owners, but do not have limited liability, and cannot shelter income for drawing in later years.
At the end of the day these dividends and capital distributions are earnings.
The only real surprise is that the Conservatives have done it rather than the successive Labour governments which allowed it to flourish.
Presumably an unpopular question ...... but
Why should a business being operated through a limited company pay less tax than an identical business being run by a sole trader or partnership?
Ignoring arguments about costs of compliance and limited liability etc.
Just another reason
To retire
Not in business?
I am sure that David must be correct about HMRC not being 'in business' and therefore not being regulated, but if they have 'customers', must they not be 'in business'? If not, what are they?