proposed dividend tax looks like a very modest burden for PSCs
Anyone, what figure would the dividend tax have to be to fully cancel out the tax advantage of avoiding 13.8% employers NICs (applicable to over 65's) and what figure would it have to be to cancel out both employers and employees NICs (12% / 2%) for under 65's?
A 7.5% dividend tax even when scaled up to a percentage on profit surely looks quite modest in comparison with the total NICs percentage, at least for under 65's. If the new tax takes away the pressure and uncertainity on PSCs then surely this is a good thing to be welcomed by PSCs. Once the rules are clear, the market rates will adjust.
Net saving from new van benefit under IR35 rulesI run a service company under IR35 rules and drive a van as my everyday private and business vehicle. I believe I will gain from the new £3500 van benefit next year as I will be liable for Class 1A NICs and income tax on van benefit but not Employee NICs because under IR35 rules, IR35 salary is arrived at after deducting van benefit from gross. I think I will gain approx £350 provided my IR35 salary stays below NICs upper threshold. Above that and I neither gain or lose.I wonder if my reasoning is correct?