Shaun, yes I know we are a capitalist country. I ment, we are too much like a capitalist state to show fairness across the board. Money talks. So now I'm too red for this trade? Come on, I'm only saying directors should pay NI!
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
Pretty difficult to tax plan much around sole traders -
Sole traders who have no choice but to pay into the system, like the rest of the UK workforce.
I took this part seperately as its more technical than theoretical capitalism vs socialism discussion.
Tax planning is not all about telling people to incorporate to save money. There are a whole host of methods employed by the self employed to reduce their personal tax liabilities. The key is not necessarily legal form but rather how much money is involved.
Tax planning is not about paying no tax but rather attempting to ensure that tax is paid at the lowest possible rate. i.e. trying to keep people away from the 60% effective tax rate and loss management to ensure that the entirety of the personal allowance is used before wasting losses.
I understand what you are saying about NI but looking at it another way, why should the self employed pay 9% capped at £41,866 (2% thereafter) with directors paying 25.8% with no cap on the the level at which one pays 15.8%.
Does not the treatment of the self employed create the atmosphere where directors and accountants feel that avoidance of NI is justified when the system is geared against directors? At the end of the day the dividends are only available from taxed income so it is not as if directors are not paying into the system.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Shaun I'm not saying you're wrong, nor that your calculations are wrong. My point is purely one which involves a need to pay NI similar to the self employed paying class 2. Look it's just opinion. I think any further change above that would result in a fair few disincorporating. Those who tax plan to receive tax credits should be struck off. I remember sustainability being part of ethics, do what you can today without harming tomorrow's generation. That being said, if it's legal go for it - I just do believe that everyone who can pay in does. I know NI isn't necessarily all used for good, just like road tax doesn't pay for roads. Yes companies pay CT, but they wouldn't pay that if they were better off being self employed anyhow, as they wouldn't have incorporated. This could go on forever lol. It's just my opinion.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
on the latter point that goes back to what I mentioned yesterday that some people have no option but to incorporate as large corporates will not do business with the self employed so you can see how directors of one man limited companies feel that they are being unfairly treated when compared to the self employed who suffer a much lower NI burden.
Sensible accountants do not advise clients to pay themselves so little that they pay no NI c ontributions as that would be shooting themselves in the foot over state pension so its not that directors pay nothing in NI and if you think about it a dirctor pay NI at 25.8% will pay almost three times as much as a self employed person paying at 9%. Is that not justification in itself for the director to take dividends for the tax system to be fair?
I'll have you singing the conservative party anthem yet, lol.
I know the sort of ethics that you are talking about although the ethical theorists name has temporarily eluded me (sounds like Cyert & March but don't hold me to that until I've had chance to check it out later (it's covered in ACCA paper P1 if you are interested where professional ethics are covered in every ACCA paper).
Professional ethics though are geared towards a different sort of ethical behaviour intended to instill the confidence of the public in the profession rather than our personal responsibility to the planet. For that side of things we choose what companies we will deal with. for professional ethics we are concerned with the public perception of us.
The key professional ethic is integrity in that everything that one does in both their business and personal life must be beyond reproach and do nothjing to bring the profession into disrepute.
Aslo, during our acceptance procedures it is a key step that we must judge whether anything in the arrangement with the cliwent would be a threat to our image and reputation. Association with things such as dodgy tax schemes are not the sort of thing that professional firms should be involved with. But, where we have a situation such as dividends where such actually creates fairness when utilised properly I see no issue with that.
You're right, this discussion could go on forever espechially now that its teatering on ethical dilemas which is one of my favorite areas.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
But just to emphasise, when I talk about ethics I am talking about professional ethics (IFAC code and professional bodies more stringent adaptions of such) rather than the P1 type ethics which you and the attached article were referring to.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Indeed. There are many people who only invest in ethical companies. Many people are against many forms of planning. I'm obviously going to extremes now - there are obviously businesses whom produce products such as weaponry which would put investors off. Me personally would never invest in anything remotely connected to the gambling industry, I would neither work for anyone who is connected to such trade. Everyone has a ethical barometer, some are put off by the slightest grey mark, others see value in war. Business is much more than accounting, without customers businesses wouldn't stay as a business for very long - it is easier to attract customers if your business is ethically minded. IMO
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
Personally I would have nothing to do with Whaling, deforestation, shale gas extraction, open cast mining or gambling (we're in agreement on that one). There will be others that I judge on a case by case basis.
I don't personally have an issue with instruments of war as its always better to have a bigger stick than everyone else even if you don't intend to use it.
I'm a bit of a tree hugger at heart (I choose to live next to 28 square miles of forest and my garden is controlled nature freindly), that said though I would not seek to use that as a selling point as it cheapens one's moral and ethical values if you put a price tag on it.... A little like celebrities and MP's who jump on a cause because of what it does for them, not what it does for the cause itself if that makes any sense.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I don't live a million miles away from there, Codsall for me - safest tory seat in the land seemingly lol.
We always seem to say we don't wish to associate with crooks, rightly so, yet we never really touch up on ethics. I guess when you've enough clients we can choose which way we will go.
Having said that, I would imagine that most of us here never have to worry about arms / diamond dealers etc the big 4 however....
Even where it's legal, some folk won't tread.
Others like to stay away from animal testers and such like too - in fact that's quite a large subject in itself. Some people choose to turn an eye to that - hate the testing - love the beauty products. We are a funny species.
-- Edited by abacus12345 on Monday 7th of March 2016 06:43:13 PM
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
