The BBC

[Alistair20000]

I've done the ltd company thing. The tax you pay Vs PAYE is nowhere near close

This is correct but as Spankers has pointed out the business was a partnership not a limited company so the tax differential would not be as great. Just employers NI contributions unless there is something esoteric about the partnership structure.

Not read the full case report yet but the NIC on £4.5 million income that Spankers refers to looks more sensible than £4.5 million of total tax and NIC.

 

[Alistair20000]

I agree, he's a freelance worker. But why should that make a difference to what he pays in tax? I'm not blaming Mr L. I'm blaming the terrible system.

Our very own PM recently announced his tax payments. Works out 22% of his earnings were paid in tax. The average worker on 60k a year will pay 29% of their salary in tax & NI

The point is a lot of what the Diddy Man paid tax on was capital gains where the rate is 20% if the figures are substantial unless the gains are in respect of residential investment property where it is 28%. Income is taxed at up to 45% and some at 60% if your income falls into a band where you lose your personal allowance. NIC on employment income and self employed profits of course. No NIC on capital gains.

 

[Egg]

This is wrong and misleading.

With respect, this has long been the Jinxster's modus operandi.

 

[Alistair20000]

Not Gary's fault. Decades of rubbish Chancellors are to blame.

Can you tell me the name of the chancellor who adopted a socialist approach and made tax on capital gains broadly the same as tax on income ? and who said this:

In principle, there is little economic difference between income and capital gains ... and in so far as there is a difference, it is by no means clear why one should be taxed more heavily than the other … I therefore propose a fundamental reform. Subject to the new base date, capital gains will continue to be worked out as now, with the present exemptions and reliefs. But the indexed gain will be taxed at the income tax rate that would apply if it were the taxpayer’s marginal slice of income. In other words, I propose in future to apply the same rate of tax to income and capital gains alike … The changes I have announced represent a thoroughgoing reform of capital gains tax which will benefit the economy and eradicate a major injustice. They will sharply reduce the damaging effects of the tax, while ensuring that capital gains remain properly taxed and the yield of income tax adequately protected.

And the wicked right wing chancellors who broke that link ?

 

[Egg]

Can you tell me the name of the chancellor who adopted a socialist approach and made tax on capital gains broadly the same as tax on income?

Not sure how making capital gains tax broadly the same as income tax equates to 'a socialist approach'. Surely such an approach would demand that capital gains were taxed at a far higher rate [given it is altogether more likely those who will pay this tax will be among the better off]?!

 

[Alistair20000]

Not sure how making capital gains tax broadly the same as income tax equates to 'a socialist approach'. Surely such an approach would demand that capital gains were taxed at a far higher rate [given it is altogether more likely those who will pay this tax will be among the better off]?!

More "socialist" than a lower CGT rate than Income Tax/NIC rates as we have now and have had for some years.

 

[Alistair20000]

This is wrong and misleading.

The whole point was that he didn’t set up as a freelancer, using a Ltd company for invoicing purposes. This is the first error in your post. The company is a partnership, and this is why the case was dismissed.

In addition, my understanding is that hmrc we’re not chasing £4.5m, but what they thought should be employer National insurance payments due on the £4.5m under IR35.

Not quite right Spanks now I have read the case report. The Tribunal accepted that a partnership can be an intermediary for IR35 purposes as it was bound to do as the legislation says that very clearly.

The case was decided on a preliminary point that GL rather than the partnership was directly contracted to the BBC and BT. I find that a curious conclusion based on the facts that were found and would not be at all surprised if HMRC appeals to the Upper Tribunal.

As a result of this decision (if it stands) what HMRC should have done was to assess the BBC and BT for the PAYE/NIC on the basis GL was really their employee as a question of fact. The BBC sought to get round being directly responsible for an HMRC attack by forcing GL to operate as a partnership with Ms Bux. The more interesting matter of GL's status as employee/freelancer on the facts and relevant law was not examined in the Tribunal decision as the preliminary point delivered a knock out blow.

HMRC probably licking its wounds this morning if it has aimed at the wrong target and it is now out of time to assess the BBC and BT.

 

[Grecian2K]

If only Mr Lineker had negotiated to broadcast MoTD from the British Virgin Islands (along with his crisp marketing enterprises) and employed the stentorian Sir Geoffrey as his tax advisor this whole unsavoury incident could have been avoided.
Still, unlike many of the many, many megarich he chose to remain tax domiciled in the UK

 

[Alistair20000]

If only Mr Lineker had negotiated to broadcast MoTD from the British Virgin Islands (along with his crisp marketing enterprises) and employed the stentorian Sir Geoffrey as his tax advisor this whole unsavoury incident could have been avoided.
Still, unlike many of the many, many megarich he chose to remain tax domiciled in the UK

Not good enough to avoid U.K. tax G2K. He would have to have emigrated and become non resident to achieve that.

You are mixing up residence with domicile by the way. Just saying like.

My support pack “An analysis of the concepts of residence and domicile in the U.K. tax system“ is on its way to you.

 

[Grecian2K]

My support pack “An analysis of the concepts of residence and domicile in the U.K. tax system“ is on its way to you.

Very kind of you Al. I trust that it comes soft, quilted, perforated and rolled on a cardboard tube that fits our bathroom holder.