Chancellor of the Exchequer George Osborne told the CBI last night that he wants a simpler corporate tax system and lower rates. The Conservative manifesto promised to cut corporation tax from 28 pence in the pound to 25 pence in the pound. But that pledge has been replaced with a new joint agreement between the Tories and the …
New tax advice
He said small businesses would benefit from his plan to abolish employers' National Insurance contributions for the first ten members of staff.
Split your company into separate companies of 10 or less people and never pay Employee NI again.
hmmmm, think again?
"Split your company into separate companies of 10 or less people and never pay Employee [sic] NI again."
and you'll just end up with multiple auditors fees and all the other overheads instead
and you'll look like a complete twat in the eyes of HMRC
Only for PLCs. LLP and Ltd have totally different regs where that is concerned so not a completely daft idea in theory. Though the admin overheads and the HMRC thinking your are hiding something will not help.
memmove(bank_account_in_the_caymans, top_line, sizeof(struct _3p_in_the_pound));
There is something of the nigth about this one...
hang on where have i heard that before...
tories used to be worried that their demographic was a bit old, but now that has changed, they also have the undead.
hold on tight folks this next bit is going to be bumpy
Holy crap, if they eliminate Employer's NI for small companies then as I run a one-man service company caught by IR35, I'll save £8,000 in tax per year!
Wait a while jim
Most likely they will slip in something that excludes those caught by IR35, or it will not actually make it into the real world at all...
Ouch new companies only
Reading other statements that have been made it looks like this will only apply to startups for the first one or two years, hopefully the promissed review of IR35 will result in some better news, that or I need to close my company and re-open a new one to remain competative on rates.
I dare say that one man LLCs (IE contractors) will be excluded for exactly that reason.
Grow small businesses...
Those of us with small businesses usually want to grow them to employ others (who don't want to run businesses - most people!), and a bit of help is always welcome. The transition from small service company to employing business is an awkward stage - you have all the overheads and costs of running a payroll, PAYE, NMW laws, etc. for part-time help, a few hours here or there. If we can get a leg up to get over that steep escalation in costs and hassle and paperwork, we can get employing others all the sooner.
Big employers grow from small employers, small employers grow from entrepreneurs. Look after the small guy, help him grow, and the whole economy grows, everyone wins.
Find me a business of any size which isn't on the fiddle - sorry, exploiting allowances, tax classifications, and loopholes to the very maximum extent allowed by law. You have to do that in order to survive, or your competitors will eat you alive.
So closing loopholes in order to reduce the headline rate of tax is at best a zero-sum game for any real business, depending on how much the headline rate comes down (if any).
This might be viewed as bad news for accountants, but it's quite the opposite, since they'll just have to work harder (and bill more) to find the remaining - and doubtless some new - loopholes.
The tax code needs re-doing from fresh, starting with a flat rate and no (nada, zero, zilch) wheezes or loopholes, not yet more token fiddling around the edges.