You would still pay the tax, of course. Any saving would have come out of thresholds having been increased in the following tax year.
I've had them from many years, even prior to self assessment through having quite a number of unusual and varying factors from year to year. I agree though, in my early career when this wasn't the case, there weren't any unless one disputed the calculation.
There have to be some advantages...
But *all* tax paid was at basic rate, none at the higher rate.
No I gambled (correctly) that the following year would not be so good and I wouldn't be anywhere near the higher rate threshold, even with the held over overtime payments. Remember it was overtime pushing me into higher rate tax not basic pay. My basic pay was way, way, below the higher rate threshold but doing 60+ hour weeks for >6 months of the year produces a significant amount of overtime payments. B-)
This is going back a few years when I think the difference between basic and higher rate was nearer 50% than the 20% of today. The saving probably wasn't much but it's the principal of paying tax that I didn't have to and for minimal effort to boot.
I don't quite follow. As far as I understand it, a limited company is one of the established legal structures which allow a number of people to work under one umbrella. Are you suggesting an alternative?
Ah. The missing information. I hadn't appreciated that there was a substantial delta between the two
Completely agree there... not one penny more than they are due
No, merely observing that according to press reports huge numbers of self employed people have turned themselves into companies for the
*sole* purpose of saving tax.
There are some tax advantages to having a limited company that employs you, something to do with being a "consultant" rather than an "employee". HMR&C have caught on in the last few years and are tightening things down, I know several people who set up companies a few years back who are now thinking of winding up the company and reverting to sole trader.
I don't know the details, seemed far to much hassle for a small gain. IR35 comes into it some how.
Which was an entirely predictable result of GB introducing a 10% corporation tax band for companies with a small turnover. Then he whines about "tax motivated incorporation" and has to fix the fix one or two budgets later... Just how short sighted is this man?
He has two time horizons these days.
- three months
- three years
I thought it was squared (my Physics exams were a long time ago) or maybe that was drag.
I recon a few % drop on MPG around town and about 10% on motorways if my Berlingo is anything to go by. I leave the ladders on for a normal working week with town driving and take then off when I am working some distance from home (eg a rewire 20-30 miles away)
Adam
Nope, definitely cube.
Wow, that does surprise me.
So I'm confused (not difficult).
What is it around town that requires a ladder that working further away doesn't? I can't think of where one would be needed for a rewire anyway. Just curious.
Have you found another way to put an outside light up that is too high to reach without ladders :)
Working locally I will try to get to as many small jobs done as possible. The nice little call out type of job. These may need a ladder (outside lights, alarms etc). A contract job some distance away may not need ladders or there may already be some on site. If I know I need to take the ladders I will. I can drive from Yorkshire to Purley and back on one tank of fuel without ladders but I do need to top up with ladders on.
Adam
The message from "Dave Liquorice" contains these words:
In days of yore the gaps were smaller rather than larger. Don't you remember basic rate at 35% with higher rates in 5% bands?
Not into physics, just the memory of two holiday trips to France with bikes; first time they went on a carrier on the back door of the diesel Citreon BX estate and the fuel consumption was no worse than expected. On the second visit, there were moans about access to the rear space so I put the bikes on the roof; big mistake re. the fuel consumption which went down 10 to 15% IIRC.
I'm sure that that is explainable by the disruption of the smooth airflow over the roof versus the already dirty air at the rear of the car - and as said above the journeys were at speed. It might be thought that a ladder being 'flat' would cut through the air cleanly, but presumably each step creates it's own turbulence.
I won't make the obvious suggestion about carrying the ladders behind the van !!
Rob
I can remember about 33%, with higher bands starting at 40% and going up in 5% increments to 60%(?).
The lower "higher" bands were small. I can recall my (then) wife and I having to monitor our joint income - somewhere around the 50% rate it was worth being taxed separately and giving up the married allowance. We had modest incomes - the thought of some of it being taxed at 50%+ was pretty galling.
-- "Hailing frequencies open, Captain."
In 'more-yore' days; income tax _started_ at two/ninths 'earned income allowance' then Seven Shillings and ninepence in the pound ... (7s/9p). Let's not talk of Dennis Healeys 'supertax' - 19s/6p in the pound! Oh, I said let's not!
I recall a time when my wife worked overtime and her extra pay pushed 'me' into the higher tax bands - I got penalised for each pound she earned! According to the IR wife's income was added to husband's income
It got to 98p in the pound for tax on "unearned" income at its worst IIUC!
The message from "John Laird" contains these words:
IIRC 35% was the highest basic rate ever and the higher rates went up to the stratosphere.
Think yourself lucky that your income was that large. :-) 35% hurt more on a smaller income.
The message from "Brian Sharrock" contains these words:
I never did properly understand all that guff about 2/9ths, 1/9ths, etc. and the interaction with the tax rates and was glad when the system was simplified. I can still remember I had to do the sums myself just to convince myself that there was no change between the 2/9ths earned income allowance plus tax at what seemed like a higher rate and the zero band and tax at the basic rate.
I don't know what rates surtax got to - I never earned enough to qualify
- but surely Healey didn't put the boot in until after decimalisation when the rates were much simpler to understand and a marginal rate of
98% no more than very visible evidence of legalised theft.
Income tax started at 7/9d (39p) in the pound but on earned income (not interest and investment income) this was reduced by 2/9 making the rate about 30p. So far from people incorporating so they could pay themselves dividend rather than salary it made sense to do just the opposite.
Of course in those days personal allowances were a lot higher relatively speaking so lots of lower earners paid no tax and NI was (AIUI) a flat rate stamp, 6d or some insignificant sum, whilst now it's a supplementary income tax on earned income.
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