Re: Personal Service Companies
I love how everyone fell into the trap. It’s now a contractors vs permies war, which is what the Government wanted. It keeps people distracted and stops them asking “why not just change the tax rate on dividends?”.
Anyway... Tax is used to incentivise and disincentivise certain behaviour. Think Council tax on empty property. It can increase to 200% because empty property is to be avoided.
If you remove corporation tax you incentivise hoarding. That means less cash in circulation, which holds back growth. That is bad for pretty much everyone except the guys holding a shit ton of cash.
Your idea also raises various questions such as “what does withdrawn from the company mean?”. They pay tax when they pay my salary? When they buy parts? When they service debt? When they invest in something?
If not, do you think there might be some loopholes there? It looks like your idea is focused on personal service companies, but it would also apply to Tesco, JLR, BT etc. It’s not simple to make tax simple whilst still being reasonably effective.
Biting the hand that feeds IT
