political commentator * author * publisher * bookseller * radio presenter * blogger * Conservative candidate * former lobbyist * Jack Russell owner * West Ham United fanatic * Email iain AT iaindale DOT com
Thursday, March 22, 2007
How to Damage Small Businesses in two Easy Lessons
I just had my business rates bill for the next financial year - a 16% rise on last year. And that's with a 50% small business rate relief!
And I also face a 3p hike in Corporation tax. Anyone got a map to Beachy Head?
I agree Iain that it's bad that small businesses will pay more corporation tax (this is being publicised as 2p more by the way, where does your figure of 3p come from?) and large businesses pay less, but I have to query if the Tories in office would do any different. Despite the hype, generations of Tory (and Labour) governments have favoured the very wealthy and large corporations over the moderately well-off and smaller businesses. One need only consider the matter of corporate donations to political parties to determine why this might be.
You should try working for a living Iain, the FSA have obliterated the small Insurance Broker( I am one) making entry to the market impossible and raising crushing new costs .
the story of how everyone has got outt of opaying these costs is a salutary lesson in the stupuid in-effectiveness of Governement .
Just think of the waste of money all those inspectors are responsible for...I expect you are paying for some of them, right now //
..ahem ..I `m sure opining and so on is hard work to .. but at least its fun
You should try working for a living Iain, the FSA have obliterated the small Insurance Broker( I am one) making entry to the market impossible and raising crushing new costs .
the story of how everyone has got outt of opaying these costs is a salutary lesson in the stupuid in-effectiveness of Governement .
Just think of the waste of money all those inspectors are responsible for...I expect you are paying for some of them, right now //
..ahem ..I `m sure opining and so on is hard work to .. but at least its fun
not many NuLab MPs in the house to defend that shambles yesterday, a few ReaLab's ex-miner types thats it. Osbourne not giving a bad speech albeit to no audience.
A comparison of net rates of business formation under Labour and the Tories might help the neutral reader decide who has the best record in encouraging small businesses.
Could all those in favour of small businesses please explain why they think they should be subject to a lower rate of tax on their profits than those who are employed. They might also want to explain why they seem to think that they can put almost every personal expense through their business so that the VAT can be claimed back and they can get tax relief. This is the reason why everyone now asks you why you want a receipt everywhere - this Sunday I was asked when I took my kids out for a meal whether I wanted a VAT receipt - perhaps a small businessman could explain why that is a legitimate business expense.
Re the FSA placing burdens on insurance brokers - all I can say is about time. Perhaps no one remembers endowment misselling (or pensions misselling) when a whole group of so called "independent" financial advisors missold life assurance - pocketed big up front fees and then in many cases collapsed their companies leaving everyone else to pick up the pieces. Perhaps if the insurance sector had self regulated itself then it wouldn't have needed the State to do the job for everyone else!
'I agree Iain that it's bad that small businesses will pay more corporation tax (this is being publicised as 2p more by the way, where does your figure of 3p come from?)'
It's 19% at the moment. So an increase to 22% would be an increase of 3%.
He used another slight of hand. He said it would rise from 20% next year to 22%. However that means a 1% rise to get to the 20% in the first place.
Not sure how you got a 16% rise in business rates - the standard multiplier for small businesses for 2007/08 rose to 44.1% compared with 42.6% for the previous year - a rise of 3.5%. Are you factoring in the change in rateable values which took effect on 1 April 2005?
"why should small businesses pay a lower rate of tax than individuals pay in income tax?"
Because, you unbelievably blockheaded socialist ******* persons, a company isn't an individual. How does the owner of a business get money out of the business? Same way as everybody else, either by paying a salary, which is subject to PAYE, or by taking a dividend, which is also subject to income tax. This is known as double taxation.
There is no reason whatsoever why companies should pay tax, since any income they generate will be taxed again anyway!
The reason we stand for it at all is because, by owning our own business, we aren't subject to bosses, or unions, or blockheaded socialists, except insofar as they are Chancellors of the Exchequer.
I've been meaning to ask this for a while but since you've been quite hot on "conflicts of interest" this week maybe you can clear something up for me.
On your Doughty St broadcast about the Smith Institute you interviewed an MP (Keith Simpson) who said he was so outraged by what he had discovered that he tabled a few PQs.
Fine.
But what you DIDN'T tell us, is that Mr Simpson sponsors your Parliamentary pass.
So tell us, what do you offer the great British public in return for this high-level access to the corridors of power?
And why didn't you mention in your broadcast - even aside from all the PE stuff - that Keith Simpson is, effectively, your employer?
How laughably funny. Keith Simpson asked those PQs long before I had even got involved in the Smith Institute issue. Second of all, he is not my employer and he does not pay me. I voluntarily help him from time to time. Unlike Ivan Henderson I undertake no lobbying activity of any kind.
I'm afraid it's you who is the dunderhead - there isn't double taxation of dividends the receipient is given tax relief for the tax suffered on the dividend - and the wages taken out are deducted from profits before taxes are calculated.
If small businesses did not have a lower rate of effective taxation than individuals taxed at 40% then perhaps you could explain why Matt Wardman is so keen to continue to use service companies as a means of avoiding paying tax.
>Matt Wardman is so keen to continue to use service companies as a means of avoiding paying tax.
You seem to want to misunderstand. I don't avoid paying tax.
I have 3 problems with El Gordo's proposals:
1 - He is trying to make me pay Income Tax on business expenses.
2 - He is thus creating an unlevel playing field - effectively handing over chunks of business to his large corporate friends who charge 2-3 times as much for the same work.
3 - The monumental administrative innefficiency he is imposing.
He's made the bed and the public sector is going to have to lie in it.
If you want to debate the details better to do it at my site rather than put all the boys and girls here to sleep.
"I'm afraid it's you who is the dunderhead - there isn't double taxation of dividends the receipient is given tax relief for the tax suffered on the dividend"
All the tax? No sir. You go and read it up properly first before you call me a dunderhead.
" - and the wages taken out are deducted from profits before taxes are calculated."
Correct. So all income taken out of a company is taxed already, at least once, sometimes twice. If the company grows in value and you sell its shares, you are subject to capital gains tax. There is simply no way of getting out of paying tax just by having a company. So the question remains: why should companies be taxed on their profits? Just because it can be done? Perhaps unions should be taxed on their surpluses, too?
there isn't double taxation of dividends the receipient is given tax relief for the tax suffered on the dividend
If you are a 40 per cent taxpayer, you pay 32.5 per cent tax on dividends, as they are the 'top slice' of income. However, because you are given credit for some of the payment, you get an 'effective tax rate' on dividends of 25 per cent.
If you pay tax at 22%, you don't need to pay tax on dividends, as the dividend tax credit will cover your liability. However, if you are a higher rate (ie 40%) taxpayer, you do, as I have described above. It is therefore incorrect to imply that there is tax relief for all dividends.
Who pays more to the tax man - an employee who earns a £100k or an employer who makes a profit of £100k after all his expenses and then pays himself that amount in salaries or dividends. I'll think that you will find that it is the former by some margin, especially when you take into account National Insurance (and that is before account is taken of paying salaries to wives who don't work and claiming non-business expenses). Please provide examples which show otherwise - if you can. You may want to argue that you deserve a lower tax rate because of all the risks you take etc. - but I doubt that you can argue that you pay more tax.
Bel - I understand what you say - but the overall impact was that for small companies the effective rate of tax on small company dividends used to be slightly less than the 40% rate paid by tax payers - not sure whether this will change - will the 32.5% rate still apply?
Cassander - as you say companies are taxed on their profits - and so the amount of income covered by costs is not taxed - if your argument re double taxation was correct anyone would be able to argue that they are subject to double taxation.
Ian P - everyone (including your competitors) pays the same tax rate on their income - get used to it. There is nothing to stop you growing or working harder - if you're sucessful then you'll be better off. You get tax relief for any legitimate business expenses. I'm well aware of IR35 - I remember doing the same work as others before its introduction but paying twice the level of taxes because I wasn't a tax dodger.
Before I post I wish to declare an interest - I run a small business.
I think we need to restore the tax free band, expand it, even. Owners of small businesses make the country run more efficiently by increasing competition and lowering costs for their customers. They create employment. They would create even more if the "escape velocity" required to get into hiring orbit was not so ABSURD.
Anyone running a small business understands the plight of employees far better than managers at large companies. They have to, they often cannot pay them into happiness and they suffer greatly if a good one leaves. I have more respect for the corner shop owner, than the CEO of a large company who is a promoted employee.
I believe the post of Chancellor of the Exchequer should only be open to those who have built their own business, however modest.
I believe the post of Chancellor of the Exchequer should only be open to those who have built their own business, however modest.
roger thornhill, I agree with you 100%.
tory boys ... Over the past few years, the taxman has made it harder to pay income to a spouse who doesn't work. Even giving shares (and with it the right to dividends) to such a spouse is enough to attract the taxman's attention. And as for non-business deductions, the taxman has been running wild here. Small companies are being 'investigated' rather aggressively by the lovely men at Revenue at Customs, so there is not as much 'leeway' as before, for a small business.
But I agree with your wider point, that an employee has no shelter, no umbrella. He takes body blow after body blow from the taxman, and cannot even duck. He has very limited scope to arrange his affairs, he doesn't even have a cash flow advantage, as much of the tax is deducted monthly through paye.
Is there a party out there that will say something about our increasing tax burden, and mean it?
And, Roger T, we might add that employers also act as unpaid tax collectors for PAYE, NIC and VAT (as well as a trillion totally unrelated things collected or adjusted via the PAYE returns, e.g. student loan repayments...). Guess who pays for all that admin? And guess who gets into deep dodo for making a mistake on any of the zillion ever-more complicated forms?
"Tory boys..." might observe that an employee can deduct any tax-deductible expenses to exactly the same degree as the employer. You believe that, just because somebody owns a business, they are fiddling their expenses and taxes. Well you're just plain wrong.
If we didn't provide the employment, where would everybody else work? You can't all be working for the state, 'cos then, you see, there'd be nobody to earn the money that actually pays the taxes that pays for all the public-sector employees.
Yes, which way? I'll come with you, Ian. Greedy, snout in the trough, Broon has, knowingly and deliberately, put another nail in the coffin of SMEs.
4.4 MILLION SMES, over 99% of all businesses, employing almost 60% of all workers in UK, and that prat Broon wants to kill us off in favour of his donor class, Broon's giant, corporate cronies.
Make the most of it, Mr Broon, because are finished at the next election.
Now come on Iain. Apologise to the nice people for misleading them over your relationship with Keih Simpson, otherwise people are going to start wondering about whether regulation of internet TV isn't such a bad thing after all.
There is of course the coincidence about the broadcast and the questions, and of course weren't there those coincidental resignations from some body or other recently as well?
All very coincidental if you ask me, but nothing which a full and contrite apology wouldn't cure.
Have you noticed how Broon pronounces his job title as:
chance alors
Very apt, Mr Broon, as you've chanced your luck to destruction with this budget and we, the people, are going to press your doom button in the not so far future.
And, Cassander, has Toryboys realised WHO pays EVERY PENNY of that Employee NIC? In fact who pays up first the income tax that the employee pays? Yup, the employer pays it. Every bean.
Re the FSA placing burdens on insurance brokers - all I can say is about time. Perhaps no one remembers endowment misselling (or pensions misselling) when a whole group of so called "independent" financial advisors mis-sold life assurance …
Tory boy you tragic buffoon,.It probably isn`t worth the time but I `m going to answer you out of some compulsive inability not to . Endowments are not Insurance and are sold to the general Public why then do you mention it unless as I suspect you have only the dimmest notion of what any of these things are . Noone except a fool would imagine that the subject had been forgotten by anyone. . The FSA is also regulating transactions between one company and another in commercial indemnities You will no nothing of the effect of this but allow me to educate you. When the FSA unveiled its mountain of form’s and checks that the Insurance Broker was obliged to comply with initially it caused chaos of course ,and drove many out of business . It still makes it impossible to enter the market without considerable resources . You can of course be as crooked and ill equipped to handle the accounts as ever. Larger companies having wasted vast capital in the charade of compliance then discovered that they have another business that that they could sell to the smaller fish who were by then having to wind up or seek employment,. These smaller companies then began to source to work under various sub contractor and licensing arrangement for the large companies whilst in fact maintaining autonomy. The wads of pointless pap were shuffled elsewhere and the smaller broker merely had to hand over a percentage of his income. This of course suits large companies very well as does all regulation . It allows them to profiteer with their own markets and at the expense of other would be suppliers . I don’t resent to its what I would do and in the mad house that New Labour have made it’s the least insane thing to do.
As the problem developed the increased costs began to alter the shape of the suppliers ,. Instead of having one person responsible for al elements of the transaction it was now impossible with the bulks of Bureaucracy that was handled in a specialist team . This puts a huge pressure on the productive people in the company who have cut costs by taking people with commission only deals . The person now you talk to on the phone knows far less than he did before any of this regulation. Admittedly those of us earning a living are obliged once in a blue moon to explain to some absurdly overpaid clot how to sit the right way round on a toilet seat before sending him off with some more forms to fill in.
Naturally all these costs are passed onto the consumer and that will go on as the market is strangled. Remembering the size of this industry my mind boggles as to the damage and the waste .
A couple of things you will also know nothing about .
With all this futile blundering waste and stupidity there are areas that I accept the state has role in. Chief amongst them would be the provision of employers Liability. I am going to assume you know what that is with some trepidation. This compulsory Insurance protects Employees clearly and is virtually a strict Liability workers Compensation . I wonder if you know who the largest provided of employers Liability in the UK is to the Construction industry (The largest sector ). It is a company called---------------( look it up) . They are licensed outside the country under the EU freedom of provision of Services act and the FSA has absolutely no jurisdiction over them whatsoever . This is not uncommon and I am myself involved in a company operating form the EU. I haven’t the time to explain how the different histories of the local legislations make this exceedingly dangerous but take my word for it we all; know one of them is going to go down badly. . Here is the funny thing though . . Now everyone thinks the FSA is looking after them and they assume it is alright and the FSA have to recommend the security as good in order to comply with the act . It is not ; and today there is a large ruction in Construction as the truth has started to seep out. Iain I believe once had something to do with Insurance perhaps he knows what I `m talking about . Perhaps someone here knows who ------------- is .Owned by one of the richest men in Europe .
So the regulation does not work , hurts everyone , is staggeringly expensive and does not regulate at all where regulation might be warranted . It does however foster an atmosphere in which caveat emptor is forgotten with the same disastrous results as usual
The rest of what you say is equally stupid but I have to go out .
I have every intention of stealing your wonderful expression "press your doom button". I would love to have paid some royalties for said expression, but as you insist on hiding behind "anonymous" you are not going to be able to sue me. Ha-ha!
Anything else lying around I can nick? Novels, film-scripts perhaps - or maybe the occassional stage play? I'm not fussy...
I'm perfectly aware of what you are talking about.
Endowments do have an insurance element as well as an investment element - at least thay are meant to pay out if people die early which is meant to be an insurance risk.
It was very common for IFAs to offer investment advice as well as act as insurance brokers. I appreciate that not all insurance brokers deal with the general public or dealt with endowments in the past - but there was something very badly wrong with the mentality/skills in that industry which needed to be dealt with. Self regulation didn't work and external regulation was the only alternative.
I can agree with many of your points about the quality and direction of the FSA's regulation and indeed the direction and management of the FSA - but the blunt truth is that this is a problem that the industry has bought down upon itself.
Regulation by the FSA will not go away - rather than moaning about it, the sensible thing is to look for smart regulation that is directed towards achieving the main objectives rather than drowning people in mindless bureaucracy.
There is still an awful lot of mis-selling of investment, insurance and mortgage products going on - what do you think should be done about it??
I should declare an interest as well - I have built up sucessful businesses from scratch as well - the only difference is that I did it overseas while working for a major company and generating several millions of export earnings for the UK parent.
But of course - you think that I should pay a higher tax rate because I wasn't working for my own company - and you even seem to think that it is the employer who pays the employee NIC - perhaps it's your employeees who help you earn the income which pays
The reality is that the economy needs both employees and employers (of all sizes)and they are all entitled to the same degree of respect - all I'm asking is that those with the same level of income should be taxed at the same rate - and that doesn't happen at present!
I have every intention of stealing your wonderful expression "press your doom button". I would love to have paid some royalties for said expression...ha,ha
Have it with my blessing, narky Mark, if your use of it helps hasten Broon's doomsday by one second I'll put up ballons. I wasn't hiding behind 'anon', by the way, just forgot to sign my blog name.
I don't mind the tax "equalisation" measures for (very) small businesses too much - Tory Boys NGU has a pretty sound point there. What gets me is the constant tinkering that GB does. Every year my corpotration tax calculations change; tax free bands, non corporate distributions, cancellation of non corporate distributions, cancellation of tax freee bands, changge of corporation tax rates. And of course the ever-present chopping and changing of capital allowances. For god's sake Mr Brown, MAKE YOUR BLOODY MIND UP how you want to tax us small businesses and stick with it.
The really big problem with growing small businesses is not the tax situation, it is the personnel management that the government (inspired by that "nice" Mr Brown) has dumped on us. As soon as you employ someone, the mountain of legislation that you have to abide by is horrendous. If all the gender eqality stuff wasn't bad enough, we have now to abide by pointless age equality legislation. Why should a company of less than say 20 people be subject to ythis nonsense? As it is, the second person you have to employ when you grow your business is a Personnel Manager.
I don't mind the tax "equalisation" measures for (very) small businesses too much - Tory Boys NGU has a pretty sound point there. What gets me is the constant tinkering that GB does. Every year my corpotration tax calculations change; tax free bands, non corporate distributions, cancellation of non corporate distributions, cancellation of tax freee bands, changge of corporation tax rates. And of course the ever-present chopping and changing of capital allowances. For god's sake Mr Brown, MAKE YOUR BLOODY MIND UP how you want to tax us small businesses and stick with it.
The really big problem with growing small businesses is not the tax situation, it is the personnel management that the government (inspired by that "nice" Mr Brown) has dumped on us. As soon as you employ someone, the mountain of legislation that you have to abide by is horrendous. If all the gender eqality stuff wasn't bad enough, we have now to abide by pointless age equality legislation. Why should a company of less than say 20 people be subject to ythis nonsense? As it is, the second person you have to employ when you grow your business is a Personnel Manager.
Newmania @ 7.31 put it all in a nutshell re FSA, I can confirm all he says.
Point is, all this bloody financial, taxation and employment legislation is all dreamt up by people who've absolutely no experience of business, and see the whole of commercial life as an episode from a Social Services training video.
Anonymous said... why should small businesses pay a lower rate of tax than individuals pay in income tax?
gosh, you tories never learn do you?
Fat cat Broon stuffs over £200,000 of our taxes into his own burgeoning coffers every year.
Having robbed all pensioners blind, he gets a, self awarded, golden, tax free pension pot. He also gets priviledged retirement terms. The rest of us will have to work til we drop to pay for the elitist retirements of Broon and his kind.
Where's the social justice, fairness and equality that Broon constantly crows about in that?
As for starting a business yourself. Only a criminal or the criminaly insane would even try it these days.
Whats the point of starting if you cant employ anyone to take the physical and mental strain off your back, so you can grow in the future?
Answer: none at all, except small marginal tax reasons, if any exsist.
The modest rise in incorporation that Gordon Brown likes to talk about is another government lie. He only quotes a period where he made a radical tax change making accountants encourage the self employed to become limited companies.
A few years later he changed the rules again, because to many small businesses took up the offer.
As a very small but truly profitable British manufactuer, I would like to say I am in good company. However its a very lonely possition to be in.
My company has only grown to its large turnover by staying as small as humanly possible, only employing family, useing sub contractors and living off the bones of other rapidly dieing companies.
My company ship is now so tight it could stay afloat during a full nuclear attack.
However my will to live may not survive working for Gordon Brown much longer.
Iain Please dont worry about being called an economic simpleton.
NOBODY UNDERSTANDS ECONOMICS
What I mean is 'possitive' wealth creation is just so complicated that econemists never mind ignorent politicians should NOT even try to understand it, never mind say they do.
Do you or anyone else really think that if Gordon Brown ever even understood a book as basic as The Wealth of Nations, he would suddenly throw 40 odd years of socialist doctrin in the recycling skip?
All he would do is use the undeniable power of capitalism for authoratarian socialist ends.
Which, with as much help from the BBC and the media as possible, is precisely what he has done.
Shut it down. People will have to be careful but at least they will know. The benefits on the other hand are huge.The answer is not " What do you, the state ,do " .The answer is what do you stop mucking up.
Perfection is not attainable , it would be an improvement.
Newmania said... what do you think should be done about it??
Shut it down. People will have to be careful but at least they will know. The benefits on the other hand are huge.The answer is not " What do you, the state ,do " .The answer is what do you stop mucking up.
Perfection is not attainable , it would be an improvement.
The investment bank analysis on the budget do not gel with Browns explanation. His performance on radio 4 yeasterday will do him severe harm. He claims certain measures meant X and Humphreys claimed they meant Y. The independent analysis ALL confirm the outcome is indeed Y.
he didnt appear at the debate because he was in ameeting about Northern Ireland and the performance of Alan Johnson and Straw was defensive, spiteful and as ever full of blatant lies. The reaction of NuLab MP's is the most interesting of all. ive have yet to hear one MP back the budget and its implications with any sensible argument. Most are simply resorting to cherry picking changes and ignoring the offsetting measures; Keith Vaz, pompous prat, said it was the best budget he had seen in 20 years, enough said.
Brown leaves the Treasury in a poor state. the growth forecasts are too high, the revenue projections too high and borrowing forecasts too low.
It will come as no surpris eto anyone that a Labour minister is being economical with the truth, putting the country at risk, misleading the public and all for personal benefit.
Brown will not become PM because the other potential candidates will realise the futility of "more of the same". If he is not challenged then it means the party accepts defeat at the next GE as highly likely.
a Thatcher legacy which has killed any attempts to regenerate inner cities. Bradford has a shortage of storage space for shops and market stalls because the business rates make it prohibitively expensive
Charity shops dominate because they get free goods, discounted business rates, and volunteer staff - they expand rapidly
Bradford is barren compared to the 1970s and local shops have been destroyed - Business Rates set centrally had a big effect
The trick is to treat Britain as you would Indonesia and match risk and funding. So you have a profitable operation abroad and leverage the UK operation to the max with local-sourced debt and make much of it non-recourse.
Then have liabilities in the UK and unleveraged profit streams offshore
The same with housing - die with outstanding mortgage to reduce IHT or be a City banker and buy a farm to avoid IHT
the only difference is that I did it overseas while working for a major company
I climbed Mt Everest, the only difference being it was Glastonbury Tor.
ToryboyNGU, if you read my post you will see that I said the employer first pays what the employee pays.
The fact is, people work for nett. The employer hires at gross.
Do you support flat taxes?
I support flat taxes and a fat personal allowance. Lets say £12k for starters and 30% or so rate initially, lowering to 20% across the board once the revenues come flooding in. Oh, and for small companies, allowing founders to accumulate unused tax allowances during the lean startup years might help.
[maths]My guess is that you would have "enjoyed" an increase of 16% even if you had had no 50% relief.
[charity law]If only ID industries were registered as a charity - as for example Policy Exchange - you would enjoy a statutory 80% charity relief on top of your 50% small business rate, meaning only 10% to pay, and your local authority would also be empowered to give you back the other 10% if and only if (IFF) they could finance this from elsewhere in their budget[/maths][charity law]
[note]Second comment is maths and charity law[/note]
I am a small ins broker and have exactly same gripe as you. It doesn't help with the big players in our industry sucking up to the FSA to curry favour and lock out the small players. I can't believe the amount of money I have had to pay to them before even starting trading.
I hate the way the FSA has this patronising "There's nothing to worry about...we're only trying to help you" malarkey" when the underlying Act is riddled with dangerous ambiguities.
"Toryboys Never Grow Up", what you said is uninformed. None of my clients are little old ladies who need protection - only corporate clients not in the UK. Why do they need same protection as little old ladies. Why do little old ladies have to suffer vastly reduced competition. The FSA is widely despised in the industry - including from the clients' perspective who now have to jump through a series of hoops.
78 comments:
Is your council Tory?
anonymous:
business rates are set centrally.
"I am pleased to inform the House that the Small Businesses (Maps of Beachey Head) Allowance of 27p per annum will be introduced from April 2017."
Wot does the speaker do? Straw has just claimed that a recent survey said trust in politicians had increased! how can that be allowed?
Darling claimed the budget was good for small business as well.
Iain,
The vote on Sky news re the budget is itself a con!! One person can register multiple votes !! I have done it myself.
Cant be bothered to sit here all day pressing a button though.
Don't worry though, Iain, the mega corporations will pay less tax thanks to your kind contributions.
No but I've got one to Heathrow Airport if you want to join the brain drain (and endure the nightmare that is Heathrow)
You should be grateful (as we all are....) for a 2p reduction in tax!
I agree Iain that it's bad that small businesses will pay more corporation tax (this is being publicised as 2p more by the way, where does your figure of 3p come from?) and large businesses pay less, but I have to query if the Tories in office would do any different. Despite the hype, generations of Tory (and Labour) governments have favoured the very wealthy and large corporations over the moderately well-off and smaller businesses. One need only consider the matter of corporate donations to political parties to determine why this might be.
You should try working for a living Iain, the FSA have obliterated the small Insurance Broker( I am one) making entry to the market impossible and raising crushing new costs .
the story of how everyone has got outt of opaying these costs is a salutary lesson in the stupuid in-effectiveness of Governement .
Just think of the waste of money all those inspectors are responsible for...I expect you are paying for some of them, right now //
..ahem ..I `m sure opining and so on is hard work to .. but at least its fun
You should try working for a living Iain, the FSA have obliterated the small Insurance Broker( I am one) making entry to the market impossible and raising crushing new costs .
the story of how everyone has got outt of opaying these costs is a salutary lesson in the stupuid in-effectiveness of Governement .
Just think of the waste of money all those inspectors are responsible for...I expect you are paying for some of them, right now //
..ahem ..I `m sure opining and so on is hard work to .. but at least its fun
not many NuLab MPs in the house to defend that shambles yesterday, a few ReaLab's ex-miner types thats it. Osbourne not giving a bad speech albeit to no audience.
No but I have a map to Jersey ;)
A comparison of net rates of business formation under Labour and the Tories might help the neutral reader decide who has the best record in encouraging small businesses.
Could all those in favour of small businesses please explain why they think they should be subject to a lower rate of tax on their profits than those who are employed. They might also want to explain why they seem to think that they can put almost every personal expense through their business so that the VAT can be claimed back and they can get tax relief. This is the reason why everyone now asks you why you want a receipt everywhere - this Sunday I was asked when I took my kids out for a meal whether I wanted a VAT receipt - perhaps a small businessman could explain why that is a legitimate business expense.
Re the FSA placing burdens on insurance brokers - all I can say is about time. Perhaps no one remembers endowment misselling (or pensions misselling) when a whole group of so called "independent" financial advisors missold life assurance - pocketed big up front fees and then in many cases collapsed their companies leaving everyone else to pick up the pieces. Perhaps if the insurance sector had self regulated itself then it wouldn't have needed the State to do the job for everyone else!
'I agree Iain that it's bad that small businesses will pay more corporation tax (this is being publicised as 2p more by the way, where does your figure of 3p come from?)'
It's 19% at the moment. So an increase to 22% would be an increase of 3%.
He used another slight of hand. He said it would rise from 20% next year to 22%. However that means a 1% rise to get to the 20% in the first place.
Brown like big business - they can afford to buy him off with training schemes and leadership conferences in Scotland.
He pays them back by stamping on small companies.
If you can't make sufficient money from a political bookshop in Westminster then you're doing something wrong.
Not sure how you got a 16% rise in business rates - the standard multiplier for small businesses for 2007/08 rose to 44.1% compared with 42.6% for the previous year - a rise of 3.5%. Are you factoring in the change in rateable values which took effect on 1 April 2005?
I agree.
I am directly affected by measures that no one seems to have noticed yet: dealing with "Tax Avoidance by means of Managed Service companies".
The consequences are dire, both for Freelancers and their Public Sector customers.
Smoke and mirrors is what all Budgets are about.
why should small businesses pay a lower rate of tax than individuals pay in income tax?
gosh, you tories never learn do you?
Anyone got a map to Beachy Head?
With pleasure Iain
map to Beachy Head
"why should small businesses pay a lower rate of tax than individuals pay in income tax?"
A)Because they're the lifeblood of the economy and often make a loss for a few years
B)This argument should be used to justify the reduction in income tax, not the oncrease in corporation tax
When will the Left get over its infantile dislike of enterprising individuals who want to do well for themselves and their families?
"why should small businesses pay a lower rate of tax than individuals pay in income tax?"
Because, you unbelievably blockheaded socialist ******* persons, a company isn't an individual. How does the owner of a business get money out of the business? Same way as everybody else, either by paying a salary, which is subject to PAYE, or by taking a dividend, which is also subject to income tax. This is known as double taxation.
There is no reason whatsoever why companies should pay tax, since any income they generate will be taxed again anyway!
The reason we stand for it at all is because, by owning our own business, we aren't subject to bosses, or unions, or blockheaded socialists, except insofar as they are Chancellors of the Exchequer.
Actually Iain, whilst you're here...
I've been meaning to ask this for a while but since you've been quite hot on "conflicts of interest" this week maybe you can clear something up for me.
On your Doughty St broadcast about the Smith Institute you interviewed an MP (Keith Simpson) who said he was so outraged by what he had discovered that he tabled a few PQs.
Fine.
But what you DIDN'T tell us, is that Mr Simpson sponsors your Parliamentary pass.
So tell us, what do you offer the great British public in return for this high-level access to the corridors of power?
And why didn't you mention in your broadcast - even aside from all the PE stuff - that Keith Simpson is, effectively, your employer?
How laughably funny. Keith Simpson asked those PQs long before I had even got involved in the Smith Institute issue. Second of all, he is not my employer and he does not pay me. I voluntarily help him from time to time. Unlike Ivan Henderson I undertake no lobbying activity of any kind.
Cassander
I'm afraid it's you who is the dunderhead - there isn't double taxation of dividends the receipient is given tax relief for the tax suffered on the dividend - and the wages taken out are deducted from profits before taxes are calculated.
If small businesses did not have a lower rate of effective taxation than individuals taxed at 40% then perhaps you could explain why Matt Wardman is so keen to continue to use service companies as a means of avoiding paying tax.
Well it's good to know that you allow mitigating circumstances for yourself, Iain.
Oh, and Simpson tabled the Smith Institute PQ on 1st February. Your Doughty Street stuff was on 31st January. Pretty timely, don't you think?
So what do you help him out with that makes your priveliged access to Parliament essential?
tory boys never grow up said...
>Matt Wardman is so keen to continue to use service companies as a means of avoiding paying tax.
You seem to want to misunderstand. I don't avoid paying tax.
I have 3 problems with El Gordo's proposals:
1 - He is trying to make me pay Income Tax on business expenses.
2 - He is thus creating an unlevel playing field - effectively handing over chunks of business to his large corporate friends who charge 2-3 times as much for the same work.
3 - The monumental administrative innefficiency he is imposing.
He's made the bed and the public sector is going to have to lie in it.
If you want to debate the details better to do it at my site rather than put all the boys and girls here to sleep.
"tory boys..."
"I'm afraid it's you who is the dunderhead - there isn't double taxation of dividends the receipient is given tax relief for the tax suffered on the dividend"
All the tax? No sir. You go and read it up properly first before you call me a dunderhead.
" - and the wages taken out are deducted from profits before taxes are calculated."
Correct. So all income taken out of a company is taxed already, at least once, sometimes twice. If the company grows in value and you sell its shares, you are subject to capital gains tax. There is simply no way of getting out of paying tax just by having a company. So the question remains: why should companies be taxed on their profits? Just because it can be done? Perhaps unions should be taxed on their surpluses, too?
Brilliant, just get the train to Brighton, and the number 12A bus will take you right to Beachy Head.
I honestly think you've made the right decision. You stopped being use or ornament a while back.
Happy plummeting.
Tory Boys
For a small limited company, i.e. 1 director, 1 co.sec, Gordo introduced something called IR35 and S660a.
The HMRC considers everything that my COMPANY earns as personal and is taxed at 40pct. They even tell me how I can disburse company funds.
i want my company to grow, and to EMPLOY people, but I cant break out of the sick cycle of taxation that this moron has placed on small business.
Old Soviet methods. The economy will stagnate just like it did for Joe Stalin.
What do you expect? Small businesses is where the Tories of the future are reared. Stamp them out and hey presto!
Simon - we have NOT had a 2p reduction in tax, Including NI changes and the scrapping of the 10% band, we WILL all pay more in total
toryboys ...
You said ...
there isn't double taxation of dividends the receipient is given tax relief for the tax suffered on the dividend
If you are a 40 per cent taxpayer, you pay 32.5 per cent tax on dividends, as they are the 'top slice' of income. However, because you are given credit for some of the payment, you get an 'effective tax rate' on dividends of 25 per cent.
If you pay tax at 22%, you don't need to pay tax on dividends, as the dividend tax credit will cover your liability. However, if you are a higher rate (ie 40%) taxpayer, you do, as I have described above. It is therefore incorrect to imply that there is tax relief for all dividends.
Don't know what you are all whingeing about. My small company is doing just fine.
Acme Artificial Smoke and Mirror Manufacturers.
Iain, have you noticed the defence spending cut of £800 million in real terms? See here for more:
http://aconservatives.blogspot.com/
Cassander/Bel
Who pays more to the tax man - an employee who earns a £100k or an employer who makes a profit of £100k after all his expenses and then pays himself that amount in salaries or dividends. I'll think that you will find that it is the former by some margin, especially when you take into account National Insurance (and that is before account is taken of paying salaries to wives who don't work and claiming non-business expenses). Please provide examples which show otherwise - if you can. You may want to argue that you deserve a lower tax rate because of all the risks you take etc. - but I doubt that you can argue that you pay more tax.
Bel - I understand what you say - but the overall impact was that for small companies the effective rate of tax on small company dividends used to be slightly less than the 40% rate paid by tax payers - not sure whether this will change - will the 32.5% rate still apply?
Cassander - as you say companies are taxed on their profits - and so the amount of income covered by costs is not taxed - if your argument re double taxation was correct anyone would be able to argue that they are subject to double taxation.
Ian P - everyone (including your competitors) pays the same tax rate on their income - get used to it. There is nothing to stop you growing or working harder - if you're sucessful then you'll be better off. You get tax relief for any legitimate business expenses. I'm well aware of IR35 - I remember doing the same work as others before its introduction but paying twice the level of taxes because I wasn't a tax dodger.
Before I post I wish to declare an interest - I run a small business.
I think we need to restore the tax free band, expand it, even. Owners of small businesses make the country run more efficiently by increasing competition and lowering costs for their customers. They create employment. They would create even more if the "escape velocity" required to get into hiring orbit was not so ABSURD.
Anyone running a small business understands the plight of employees far better than managers at large companies. They have to, they often cannot pay them into happiness and they suffer greatly if a good one leaves. I have more respect for the corner shop owner, than the CEO of a large company who is a promoted employee.
I believe the post of Chancellor of the Exchequer should only be open to those who have built their own business, however modest.
I believe the post of Chancellor of the Exchequer should only be open to those who have built their own business, however modest.
roger thornhill, I agree with you 100%.
tory boys ...
Over the past few years, the taxman has made it harder to pay income to a spouse who doesn't work. Even giving shares (and with it the right to dividends) to such a spouse is enough to attract the taxman's attention. And as for non-business deductions, the taxman has been running wild here. Small companies are being 'investigated' rather aggressively by the lovely men at Revenue at Customs, so there is not as much 'leeway' as before, for a small business.
But I agree with your wider point, that an employee has no shelter, no umbrella. He takes body blow after body blow from the taxman, and cannot even duck. He has very limited scope to arrange his affairs, he doesn't even have a cash flow advantage, as much of the tax is deducted monthly through paye.
Is there a party out there that will say something about our increasing tax burden, and mean it?
And, Roger T, we might add that employers also act as unpaid tax collectors for PAYE, NIC and VAT (as well as a trillion totally unrelated things collected or adjusted via the PAYE returns, e.g. student loan repayments...). Guess who pays for all that admin? And guess who gets into deep dodo for making a mistake on any of the zillion ever-more complicated forms?
"Tory boys..." might observe that an employee can deduct any tax-deductible expenses to exactly the same degree as the employer. You believe that, just because somebody owns a business, they are fiddling their expenses and taxes. Well you're just plain wrong.
If we didn't provide the employment, where would everybody else work? You can't all be working for the state, 'cos then, you see, there'd be nobody to earn the money that actually pays the taxes that pays for all the public-sector employees.
You could shut yourself in your garage with your Audi. With the amount of fumes that produces, you'll be done in no time.
Yes, which way? I'll come with you, Ian. Greedy, snout in the trough, Broon has, knowingly and deliberately, put another nail in the coffin of SMEs.
4.4 MILLION SMES, over 99% of all businesses, employing almost 60% of all workers in UK, and that prat Broon wants to kill us off in favour of his donor class, Broon's giant, corporate cronies.
Make the most of it, Mr Broon, because are finished at the next election.
Auntie Flo'
Now come on Iain. Apologise to the nice people for misleading them over your relationship with Keih Simpson, otherwise people are going to start wondering about whether regulation of internet TV isn't such a bad thing after all.
There is of course the coincidence about the broadcast and the questions, and of course weren't there those coincidental resignations from some body or other recently as well?
All very coincidental if you ask me, but nothing which a full and contrite apology wouldn't cure.
Whaddya say Iain old boy?
Have you noticed how Broon pronounces his job title as:
chance alors
Very apt, Mr Broon, as you've chanced your luck to destruction with this budget and we, the people, are going to press your doom button in the not so far future.
And, Cassander, has Toryboys realised WHO pays EVERY PENNY of that Employee NIC? In fact who pays up first the income tax that the employee pays? Yup, the employer pays it. Every bean.
Income tax is a tax on employment.
Re the FSA placing burdens on insurance brokers - all I can say is about time. Perhaps no one remembers endowment misselling (or pensions misselling) when a whole group of so called "independent" financial advisors mis-sold life assurance …
Tory boy you tragic buffoon,.It probably isn`t worth the time but I `m going to answer you out of some compulsive inability not to . Endowments are not Insurance and are sold to the general Public why then do you mention it unless as I suspect you have only the dimmest notion of what any of these things are . Noone except a fool would imagine that the subject had been forgotten by anyone. . The FSA is also regulating transactions between one company and another in commercial indemnities You will no nothing of the effect of this but allow me to educate you.
When the FSA unveiled its mountain of form’s and checks that the Insurance Broker was obliged to comply with initially it caused chaos of course ,and drove many out of business . It still makes it impossible to enter the market without considerable resources . You can of course be as crooked and ill equipped to handle the accounts as ever. Larger companies having wasted vast capital in the charade of compliance then discovered that they have another business that that they could sell to the smaller fish who were by then having to wind up or seek employment,. These smaller companies then began to source to work under various sub contractor and licensing arrangement for the large companies whilst in fact maintaining autonomy. The wads of pointless pap were shuffled elsewhere and the smaller broker merely had to hand over a percentage of his income. This of course suits large companies very well as does all regulation . It allows them to profiteer with their own markets and at the expense of other would be suppliers . I don’t resent to its what I would do and in the mad house that New Labour have made it’s the least insane thing to do.
As the problem developed the increased costs began to alter the shape of the suppliers ,. Instead of having one person responsible for al elements of the transaction it was now impossible with the bulks of Bureaucracy that was handled in a specialist team . This puts a huge pressure on the productive people in the company who have cut costs by taking people with commission only deals . The person now you talk to on the phone knows far less than he did before any of this regulation. Admittedly those of us earning a living are obliged once in a blue moon to explain to some absurdly overpaid clot how to sit the right way round on a toilet seat before sending him off with some more forms to fill in.
Naturally all these costs are passed onto the consumer and that will go on as the market is strangled. Remembering the size of this industry my mind boggles as to the damage and the waste .
A couple of things you will also know nothing about .
With all this futile blundering waste and stupidity there are areas that I accept the state has role in. Chief amongst them would be the provision of employers Liability. I am going to assume you know what that is with some trepidation. This compulsory Insurance protects Employees clearly and is virtually a strict Liability workers Compensation . I wonder if you know who the largest provided of employers Liability in the UK is to the Construction industry (The largest sector ). It is a company called---------------( look it up) . They are licensed outside the country under the EU freedom of provision of Services act and the FSA has absolutely no jurisdiction over them whatsoever . This is not uncommon and I am myself involved in a company operating form the EU. I haven’t the time to explain how the different histories of the local legislations make this exceedingly dangerous but take my word for it we all; know one of them is going to go down badly. . Here is the funny thing though . . Now everyone thinks the FSA is looking after them and they assume it is alright and the FSA have to recommend the security as good in order to comply with the act . It is not ; and today there is a large ruction in Construction as the truth has started to seep out. Iain I believe once had something to do with Insurance perhaps he knows what I `m talking about . Perhaps someone here knows who ------------- is .Owned by one of the richest men in Europe .
So the regulation does not work , hurts everyone , is staggeringly expensive and does not regulate at all where regulation might be warranted . It does however foster an atmosphere in which caveat emptor is forgotten with the same disastrous results as usual
The rest of what you say is equally stupid but I have to go out .
Save it Iain, when Brown wins with a 150 seat maj. I'll drive you to Beachy Head!!
anon 7.06
I have every intention of stealing your wonderful expression "press your doom button". I would love to have paid some royalties for said expression, but as you insist on hiding behind "anonymous" you are not going to be able to sue me. Ha-ha!
Anything else lying around I can nick? Novels, film-scripts perhaps - or maybe the occassional stage play? I'm not fussy...
Marquee,
So sorry, that should have been pleasure with an 'l'.
How much do you want then - go on, go on, go on,.....
Scrobbers
Marquee,
I'm utterly confused now,
The original comment fell off the end before the editing/preview 'thing' came up on the screen!
I've got a serious story to publish and you are the lucky winner!
All this has now destabilised into stupidness, so I'll apologise to you and Iain and do something else...
Newmania
I'm perfectly aware of what you are talking about.
Endowments do have an insurance element as well as an investment element - at least thay are meant to pay out if people die early which is meant to be an insurance risk.
It was very common for IFAs to offer investment advice as well as act as insurance brokers. I appreciate that not all insurance brokers deal with the general public or dealt with endowments in the past - but there was something very badly wrong with the mentality/skills in that industry which needed to be dealt with. Self regulation didn't work and external regulation was the only alternative.
I can agree with many of your points about the quality and direction of the FSA's regulation and indeed the direction and management of the FSA - but the blunt truth is that this is a problem that the industry has bought down upon itself.
Regulation by the FSA will not go away - rather than moaning about it, the sensible thing is to look for smart regulation that is directed towards achieving the main objectives rather than drowning people in mindless bureaucracy.
There is still an awful lot of mis-selling of investment, insurance and mortgage products going on - what do you think should be done about it??
Roger T
I should declare an interest as well - I have built up sucessful businesses from scratch as well - the only difference is that I did it overseas while working for a major company and generating several millions of export earnings for the UK parent.
But of course - you think that I should pay a higher tax rate because I wasn't working for my own company - and you even seem to think that it is the employer who pays the employee NIC - perhaps it's your employeees who help you earn the income which pays
The reality is that the economy needs both employees and employers (of all sizes)and they are all entitled to the same degree of respect - all I'm asking is that those with the same level of income should be taxed at the same rate - and that doesn't happen at present!
Marquee Mark said...
anon 7.06
I have every intention of stealing your wonderful expression "press your doom button". I would love to have paid some royalties for said expression...ha,ha
Have it with my blessing, narky Mark, if your use of it helps hasten Broon's doomsday by one second I'll put up ballons. I wasn't hiding behind 'anon', by the way, just forgot to sign my blog name.
Auntie Flo'
I don't mind the tax "equalisation" measures for (very) small businesses too much - Tory Boys NGU has a pretty sound point there. What gets me is the constant tinkering that GB does. Every year my corpotration tax calculations change; tax free bands, non corporate distributions, cancellation of non corporate distributions, cancellation of tax freee bands, changge of corporation tax rates. And of course the ever-present chopping and changing of capital allowances. For god's sake Mr Brown, MAKE YOUR BLOODY MIND UP how you want to tax us small businesses and stick with it.
The really big problem with growing small businesses is not the tax situation, it is the personnel management that the government (inspired by that "nice" Mr Brown) has dumped on us. As soon as you employ someone, the mountain of legislation that you have to abide by is horrendous. If all the gender eqality stuff wasn't bad enough, we have now to abide by pointless age equality legislation. Why should a company of less than say 20 people be subject to ythis nonsense? As it is, the second person you have to employ when you grow your business is a Personnel Manager.
I don't mind the tax "equalisation" measures for (very) small businesses too much - Tory Boys NGU has a pretty sound point there. What gets me is the constant tinkering that GB does. Every year my corpotration tax calculations change; tax free bands, non corporate distributions, cancellation of non corporate distributions, cancellation of tax freee bands, changge of corporation tax rates. And of course the ever-present chopping and changing of capital allowances. For god's sake Mr Brown, MAKE YOUR BLOODY MIND UP how you want to tax us small businesses and stick with it.
The really big problem with growing small businesses is not the tax situation, it is the personnel management that the government (inspired by that "nice" Mr Brown) has dumped on us. As soon as you employ someone, the mountain of legislation that you have to abide by is horrendous. If all the gender eqality stuff wasn't bad enough, we have now to abide by pointless age equality legislation. Why should a company of less than say 20 people be subject to ythis nonsense? As it is, the second person you have to employ when you grow your business is a Personnel Manager.
Newmania @ 7.31 put it all in a nutshell re FSA, I can confirm all he says.
Point is, all this bloody financial, taxation and employment legislation is all dreamt up by people who've absolutely no experience of business, and see the whole of commercial life as an episode from a Social Services training video.
Auntie Flo'
I should have recognised your style. Remind me a little nearer the time for an invite to the premier/launch/first night!
And don't forget - it's 99 red balloons you have to put out....
Scroblene:
Calm down...deep breaths...
Anonymous said...
why should small businesses pay a lower rate of tax than individuals pay in income tax?
gosh, you tories never learn do you?
Fat cat Broon stuffs over £200,000 of our taxes into his own burgeoning coffers every year.
Having robbed all pensioners blind, he gets a, self awarded, golden, tax free pension pot. He also gets priviledged retirement terms. The rest of us will have to work til we drop to pay for the elitist retirements of Broon and his kind.
Where's the social justice, fairness and equality that Broon constantly crows about in that?
left wingers, you never learn, do you?
Iain, I'm completely anti Brown but you are just an economic simpleton.
Mindless bigot, oh do enlighten us... you are so very clearly wiser than any of us.
I'm sorry but I just can't take Brown seriously any more after watching this on Guido:
http://www.guynews.tv/2007/03/bogey-man-cometh.html
If I caught my kids doing that they'd get no pocket money for a week.
We have a joke in our industry.
How do you get to run a small business?
Answer: You buy a big one and wait a few years.
As for starting a business yourself. Only a criminal or the criminaly insane would even try it these days.
Whats the point of starting if you cant employ anyone to take the physical and mental strain off your back, so you can grow in the future?
Answer: none at all, except small marginal tax reasons, if any exsist.
The modest rise in incorporation that Gordon Brown likes to talk about is another government lie. He only quotes a period where he made a radical tax change making accountants encourage the self employed to become limited companies.
A few years later he changed the rules again, because to many small businesses took up the offer.
As a very small but truly profitable British manufactuer, I would like to say I am in good company. However its a very lonely possition to be in.
My company has only grown to its large turnover by staying as small as humanly possible, only employing family, useing sub contractors and living off the bones of other rapidly dieing companies.
My company ship is now so tight it could stay afloat during a full nuclear attack.
However my will to live may not survive working for Gordon Brown much longer.
Gordon Brown eats his snot, live on TV!
http://sjhoward.co.uk/archive/2007/03/22/gordon-brown-eats-his-greens-from-his-nose
Cheer up Iain! watch Gordon eating his own bogies, live on PMQ's. It's disgusting!
Iain
Please dont worry about being called an economic simpleton.
NOBODY UNDERSTANDS ECONOMICS
What I mean is 'possitive' wealth creation is just so complicated that econemists never mind ignorent politicians should NOT even try to understand it, never mind say they do.
Do you or anyone else really think that if Gordon Brown ever even understood a book as basic as The Wealth of Nations, he would suddenly throw 40 odd years of socialist doctrin in the recycling skip?
All he would do is use the undeniable power of capitalism for authoratarian socialist ends.
Which, with as much help from the BBC and the media as possible, is precisely what he has done.
what do you think should be done about it??
Shut it down. People will have to be careful but at least they will know. The benefits on the other hand are huge.The answer is not " What do you, the state ,do " .The answer is what do you stop mucking up.
Perfection is not attainable , it would be an improvement.
Newmania said...
what do you think should be done about it??
Shut it down. People will have to be careful but at least they will know. The benefits on the other hand are huge.The answer is not " What do you, the state ,do " .The answer is what do you stop mucking up.
Perfection is not attainable , it would be an improvement.
You've been down the pub, haven't you? :)
Auntie Flo'
The investment bank analysis on the budget do not gel with Browns explanation. His performance on radio 4 yeasterday will do him severe harm. He claims certain measures meant X and Humphreys claimed they meant Y. The independent analysis ALL confirm the outcome is indeed Y.
he didnt appear at the debate because he was in ameeting about Northern Ireland and the performance of Alan Johnson and Straw was defensive, spiteful and as ever full of blatant lies. The reaction of NuLab MP's is the most interesting of all. ive have yet to hear one MP back the budget and its implications with any sensible argument. Most are simply resorting to cherry picking changes and ignoring the offsetting measures; Keith Vaz, pompous prat, said it was the best budget he had seen in 20 years, enough said.
Brown leaves the Treasury in a poor state. the growth forecasts are too high, the revenue projections too high and borrowing forecasts too low.
It will come as no surpris eto anyone that a Labour minister is being economical with the truth, putting the country at risk, misleading the public and all for personal benefit.
Brown will not become PM because the other potential candidates will realise the futility of "more of the same". If he is not challenged then it means the party accepts defeat at the next GE as highly likely.
Still no apology Iain?
business rates are set centrally.
a Thatcher legacy which has killed any attempts to regenerate inner cities. Bradford has a shortage of storage space for shops and market stalls because the business rates make it prohibitively expensive
Charity shops dominate because they get free goods, discounted business rates, and volunteer staff - they expand rapidly
Bradford is barren compared to the 1970s and local shops have been destroyed - Business Rates set centrally had a big effect
The trick is to treat Britain as you would Indonesia and match risk and funding. So you have a profitable operation abroad and leverage the UK operation to the max with local-sourced debt and make much of it non-recourse.
Then have liabilities in the UK and unleveraged profit streams offshore
The same with housing - die with outstanding mortgage to reduce IHT or be a City banker and buy a farm to avoid IHT
the only difference is that I did it overseas while working for a major company
I climbed Mt Everest, the only difference being it was Glastonbury Tor.
ToryboyNGU, if you read my post you will see that I said the employer first pays what the employee pays.
The fact is, people work for nett. The employer hires at gross.
Do you support flat taxes?
I support flat taxes and a fat personal allowance. Lets say £12k for starters and 30% or so rate initially, lowering to 20% across the board once the revenues come flooding in. Oh, and for small companies, allowing founders to accumulate unused tax allowances during the lean startup years might help.
The anomoly is that if your small business makes a vat profit of ten quid for the year, you may get not small business rates relief at all.
If your small business (next door) makes a £Million quid profit for the year, it is possible to get the full 50% small business rates relief.
This is an utter scandal.
Gary
[clever clogs]
[maths]My guess is that you would have "enjoyed" an increase of 16% even if you had had no 50% relief.
[charity law]If only ID industries were registered as a charity - as for example Policy Exchange - you would enjoy a statutory 80% charity relief on top of your 50% small business rate, meaning only 10% to pay, and your local authority would also be empowered to give you back the other 10% if and only if (IFF) they could finance this from elsewhere in their budget[/maths][charity law]
[note]Second comment is maths and charity law[/note]
[/clever clogs]
96 hours and counting ...
Newmania said...
I am a small ins broker and have exactly same gripe as you.
It doesn't help with the big players in our industry sucking up to the FSA to curry favour and lock out the small players.
I can't believe the amount of money I have had to pay to them before even starting trading.
I hate the way the FSA has this patronising "There's nothing to worry about...we're only trying to help you" malarkey" when the underlying Act is riddled with dangerous ambiguities.
"Toryboys Never Grow Up", what you said is uninformed. None of my clients are little old ladies who need protection - only corporate clients not in the UK. Why do they need same protection as little old ladies. Why do little old ladies have to suffer vastly reduced competition.
The FSA is widely despised in the industry - including from the clients' perspective who now have to jump through a series of hoops.
Salutations Brothr hard at Work
My earlier post suggested vat.
This should read 'vast'.
Small business rate relief is a disaster.
It is calculated using a 'landlords' rent value. It has nothing to do with how 'small' the business is.
A small business making £1M profit may gain the full 50% relief.
A small business making a loss may pay the full rate with no relief.
It depends on how much the space is worth.
A terrible idea for socialists.
Gary
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