Going after the economically disadvantaged!

So do you seriously think that successive governments - Labour, Liberal, Conservative - haven’t done that exercise and decided that it’s important to keep the differences in rates?

I seriously think that governments are influenced most by those who shout the loudest and those who shout the loudest are usually those who have an interest in protecting their wealth.

Not sure how you’d achieve that without resorting to communism.

That is so funny given that it's in a response to DaisyAnne, our determined centrist...

But seriously, communism has nothing to do with equalising the tax treatment of all members of a society...

MaizieD

^Then maybe all those business owners should just stay at home and play the stock market.^

Well, that's just absurd, GSM, without their business where are they going to get the money with which to play the stock market?

You have missed my point. People start businesses to earn themselves a living. They don't go into it with some altruistic desire to provide jobs for other people. Employees are just another necessity, like the tools of their trade, which are needed to expand the business. Do they sit back and congratulate themselves that they are keeping other businesses afloat by buying the tools of their trade from them? Do they think they need special treatment for doing so?

Employees have nothing to sell but their labour, but they are an essential part of the success of a business. Why should they work to earn a living on worse terms, tax wise, than do the people who would have nothing without them?

Yes

Any share profit or dividends paid over and above £2,000 are now taxed at the going rate.

No NIC is paid, then again nobody over retirement age pays NIC.

Regarding employees working in worse terms. MaizieD are these employees liable for the upkeep of their working premises, have they mortgaged their home in order to start up the business that employs them.

Do they lay awake at night worrying over profit and loss sheets and whether or not the business model is current and viable.

Just a few questions that immediately come to mind.

GrannyGravy13

Any share profit or dividends paid over and above £2,000 are now taxed at the going rate.

No NIC is paid, then again nobody over retirement age pays NIC.

Has it changed from this, GG13

From the govt website, taxation of dividends 2022/23:

Tax bandTax rate on dividends over the allowance
Basic rate8.75%
Higher rate33.75%
Additional rate39.35%
To work out your tax band, add your total dividend income to your other income. You may pay tax at more than one rate.

Example
You get £3,000 in dividends and earn £29,570 in wages in the 2022 to 2023 tax year.

This gives you a total income of £32,570.

You have a Personal Allowance of £12,570. Take this off your total income to leave a taxable income of £20,000.

This is in the basic rate tax band, so you would pay:

20% tax on £17,000 of wages
no tax on £2,000 of dividends, because of the dividend allowance
8.75% tax on £1,000 of dividends

www.gov.uk/tax-on-dividends

What do you think would be the result if people no longer had any incentive to invest in companies? When a company starts up, is listed or has a share issue, it looks to raise money because it needs to. There are other legitimate ways of investing money, either here or offshore, which don’t incur punitive interest rates. If that ceased to be the case investors would move their money away from the UK. Shares would be sold en masse and companies would become virtually worthless, unable to raise cash and likely go to the wall with consequent job losses.
It’s not a case of either working or investing as you seem to think - nor are the relative chances of providing a good income in any way comparable. I had a successful, well paid career and paid income tax at the top rate. I am now retired but my investment not only provides an additional income stream for me and an asset which is very likely to incur a tax liability when disposed of, it has provided a very considerable chunk of working capital for the company - amongst other things, that enables jobs to be kept. Of course, as I don’t need the dividend income I could simply have given the investment money to my son - it would be well out of reach of IHT by now.

GrannyGravy13

Regarding employees working in worse terms. MaizieD are these employees liable for the upkeep of their working premises, have they mortgaged their home in order to start up the business that employs them.

Do they lay awake at night worrying over profit and loss sheets and whether or not the business model is current and viable.

Just a few questions that immediately come to mind.

Sorry, GG13, but you are missing my point, too.

Did you start your business with the objective of providing employment, or sustaining the businesses of your suppliers?

Or did you start it with the objective of providing a living for yourselves?

Would equalising the tax treatment of your income with the incomes of people who work for businesses have made any difference to your decision to start a business?

MaizieD

GrannyGravy13

Regarding employees working in worse terms. MaizieD are these employees liable for the upkeep of their working premises, have they mortgaged their home in order to start up the business that employs them.

Do they lay awake at night worrying over profit and loss sheets and whether or not the business model is current and viable.

Just a few questions that immediately come to mind.

Sorry, GG13, but you are missing my point, too.

Did you start your business with the objective of providing employment, or sustaining the businesses of your suppliers?

Or did you start it with the objective of providing a living for yourselves?

Would equalising the tax treatment of your income with the incomes of people who work for businesses have made any difference to your decision to start a business?

We would certainly have thought hard and long regarding going from just the two of us to employing people, buying offices, warehouse and yard.

If there were going to be no advantages why should we have bothered, we were already comfortable without the added stresses of being employers.

GrannyGravy13

Any share profit or dividends paid over and above £2,000 are now taxed at the going rate.

No NIC is paid, then again nobody over retirement age pays NIC.

There is still a dividends allowance GrannyGravy. A person receiving money from dividends therefore, has a higher Personal Allowance. Interestingly, this very right-wing government is phasing that out.

DaisyAnne

GrannyGravy13

Any share profit or dividends paid over and above £2,000 are now taxed at the going rate.

No NIC is paid, then again nobody over retirement age pays NIC.

There is still a dividends allowance GrannyGravy. A person receiving money from dividends therefore, has a higher Personal Allowance. Interestingly, this very right-wing government is phasing that out.

Yes it has been gradually lowering the amount of dividends allowed before tax, it now stands at £2,000 as I posted up thread.

What do you think would be the result if people no longer had any incentive to invest in companies? When a company starts up, is listed or has a share issue, it looks to raise money because it needs to.

I am well aware of the difference between shares issued to raise capital for a start up, or a business that needs to raise capital and those of established companies which are bought and sold for speculation or in the expectation of dividends.
But, as I asked before, just what proportion of share trading is in the former variety and what is in the latter? I suspect that the latter is the greater.

Shares would be sold en masse and companies would become virtually worthless, unable to raise cash

As far as I can see, the nominal value of a company, based on its share price, has very little to do with its performance as a business. A thriving business will be generating its own cash, regardless of what price its shares are selling for (as they don't receive any money from the trading in their shares).

How many established businesses issue new shares to raise cash, as opposed to negotiating a bank loan?

There are no altruistic businesses with regard to their employees, unless the profits and salaries are shared. The owners will never be willing to do so as greed is the primary motivation.

GrannyGravy13

DaisyAnne

GrannyGravy13

Any share profit or dividends paid over and above £2,000 are now taxed at the going rate.

No NIC is paid, then again nobody over retirement age pays NIC.

There is still a dividends allowance GrannyGravy. A person receiving money from dividends therefore, has a higher Personal Allowance. Interestingly, this very right-wing government is phasing that out.

Yes it has been gradually lowering the amount of dividends allowed before tax, it now stands at £2,000 as I posted up thread.

Much of what I dislike is the messiness GrannyGravy. If there were nothing made from "using" the tax system there would be no tax planners. I am happy to say I approve of the government phasing out the extra tax allowance. Mind you, my disapproval of them freezing the Personal Allowance is far, far greater

I also think the party of government have proved to be completely incompetent for all of us. That, somewhat sadly, includes the current incumbent of No 10. He is joining a long line of those who talk the talk but do not walk the walk. But that is another thread, another day.

Whitewavemark2

There are no altruistic businesses with regard to their employees, unless the profits and salaries are shared. The owners will never be willing to do so as greed is the primary motivation.

I take exception to that statement Whitewavemark2

GrannyGravy13

Whitewavemark2

There are no altruistic businesses with regard to their employees, unless the profits and salaries are shared. The owners will never be willing to do so as greed is the primary motivation.

I take exception to that statement Whitewavemark2

😄 it wasn’t personal.

Maizie, a company’s nominal value has everything to do with its ability to raise capital.

Whitewavemark2

GrannyGravy13

Whitewavemark2

There are no altruistic businesses with regard to their employees, unless the profits and salaries are shared. The owners will never be willing to do so as greed is the primary motivation.

I take exception to that statement Whitewavemark2

😄 it wasn’t personal.

I did think you were being a bit harsh there, Wwmk2.

After all, many people start businesses to earn themselves a living.

I do think we have to distinguish between the small ones and the monsters...

Whitewavemark2

GrannyGravy13

Whitewavemark2

There are no altruistic businesses with regard to their employees, unless the profits and salaries are shared. The owners will never be willing to do so as greed is the primary motivation.

I take exception to that statement Whitewavemark2

😄 it wasn’t personal.

I know many many SME owners, if they didn’t pay their employees well, if those employees did not have excellent working terms and conditions the companies profits would plummet.

If you interpret being financially secure and having a successful business as greed I respectfully suggest that you are out of touch with the SME’s in the 21st century.

Big multinationals are a different ballgame.

Germanshepherdsmum

*Maizie*, a company’s nominal value has everything to do with its ability to raise capital.

Capital from banks?

Surely they'd be looking at balance sheets and business plans?

Or is the nominal value of a business seen as its collateral?

Outside investors buy shares in public companies - i.e. those offering shares to the public on the market. Many will have facilities with banks unless, of course, they are financial institutions. It’s smaller private companies that go for’bank loans’ and of course the potential lender will want to see the accounts and business plan - but that’s a different animal entirely. I’m sure you have seen instances of mass shareholder sell offs, devastating the value of a company and leading to facilities being terminated - the business fails and jobs are lost.

CvD66, the reason is that the establishment is almost entirely composed of people who are not receiving benefits but many of whom are in a position to use tax havens, and invest their assets in establishment industries.

Whitewavemark2

There are no altruistic businesses with regard to their employees, unless the profits and salaries are shared. The owners will never be willing to do so as greed is the primary motivation.

Of course business owners must provide well for their employees, or they won't have any competent employees.

Greed isn't motive to owning a business, making a living is reason to working one's socks off keeping a business afloat.

Caleo, are you seriously suggesting that ‘the establishment’ should include people on benefits?

All the small business I know work much longer hours than employees, 60 hours is normal often more, Not only that they are risking their wealth and working capital, in many cases it is their house. At the end of the day they often earn less than their employees do and would be better off getting a “proper job”.

Katie59

All the small business I know work much longer hours than employees, 60 hours is normal often more, Not only that they are risking their wealth and working capital, in many cases it is their house. At the end of the day they often earn less than their employees do and would be better off getting a “proper job”.

Yes 👍