Hopefully the normal MP's will band together to provide a sufficient number of people on this anyway
[ add comment ] ( 137 views ) | [ 0 trackbacks ] | permalink |
( 3 / 128 )There is definitely food for thought for the professional Contractor when considering the statistics in the news this week. It may be premature to start talking about “green shoots”, particularly for those Contractors on the receiving end of cost restructuring by their clients. The Lloyds Banking Group and Shell have been recent culprits, with the latter enforcing a 12% rate cut or contract termination for UK based freelancers. However, there has been some more positive news in the wider economy this week.
House prices have shown their first quarterly rise since October 2007, according to the UK’s largest mortgage lender. The Halifax house price index shows prices from May to July were 0.8% higher than in the previous three months. So far this year, the Halifax index states house prices have fallen by less than 1%. Are these tentative signs of recovery for Contractors thinking of moving?
More figures extended the positive trend, after building society Nationwide reported that the average value of a UK home rose by 1.3% in July. The number of mortgages approved for house purchases has also risen for five months in a row to the highest level for more than a year. Has lending policy finally relaxed enough for contractors, to allow the financing for that delayed move?
[ add comment ] ( 106 views ) | [ 0 trackbacks ] | permalink |
( 3 / 126 )Suppose that every day, ten men go out for beer and the bill for all ten comes to £100.
If they paid their bill the way we pay our taxes, it would go something like this.
The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
The tenth man (the richest) would pay £59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.
"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by £20." Drinks for the ten now cost just £80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected.
They would still drink for free. But what about the other six men? The paying customers?
How could they divide the £20 windfall so that everyone would get his fair
share?'
They realized that £20 divided by six is £3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so the fifth man, like the first four, now paid nothing (100% savings)
The sixth now paid £2 instead of £3 (33% savings).
The seventh now pay £5 instead of £7 (28% savings).
The eighth now paid £9 instead of £12 (25% savings).
The ninth now paid £14 instead of £18 ( 22% savings).
The tenth now paid £49 instead of £59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
"I only got a pound out of the £20,"declared the sixth man. He pointed to the tenth man," but he got £10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a pound, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get £10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, this is how our tax system works.
The people who pay the highest taxes get the most benefit from a tax reduction.
Tax them too much, attack them for being wealthy, and they just may not show up anymore.
In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed.
For those who don't understand, no explanation is possible.
[ add comment ] ( 189 views ) | [ 0 trackbacks ] | permalink |
( 3 / 116 )Tax Rates Next Year
Not only are the tax rates going up. Personal allowances will gradually be reduced to nil for individuals with “adjusted net income” above £100,000. This will be reduced by £1 for every £2 above the income limit. This will give a 60% marginal income tax rate on the income between £100,000 and £112,950.
As per my previous comments I am not sure how HMRC thinks this will benefit the UK as this will simply cost employers more in higher wages to compensate for the tax. This is also likely to lead to the senior banking sector having to follow suit, which could invariably lead to the same melt down as seen over the last year - what a great economic plan this is!!
Worse than that a lot of well paid people that I talk to are looking at ways to try and 'avoid' this which is even more of a concern, because HMRC will then get themselves caught up trying to catch people using tax avoidance schemes.
If anyone needs help planning then please let us know and we can try and review how these changes will impact your net income.
[ add comment ] ( 47 views ) | [ 0 trackbacks ] | permalink |
( 3.1 / 124 )HMRC got fed up sometime ago regarding people living and working in the UK trying to move money offshore. Last time only 5 banks were contacted and HMRC found 100,000 accounts to check and they started taking them to task on this matter.
64000 notifications were issued where HMRC thought that information wasn't disclosed. Initialy a lot of people replied back, with in the region of 45,000 disclosures. HMRC were therefore on the right track but this wasn't it, nothing hqad been disclosed at this stage. With the level of penalty being low a lot of people took there chances and amazingly HMRC only checked 5000 sample cases.
Of course they were happy with this because it cost them £6.5m to implement the whole action and they were able to recover £400m in additional tax revenue.
What does that mean?
They will go after more.....So far 30 banks have now been contacted including the bank of cyprus and bank of india, another 500 insitutions are expected to be included this time. So HMRC simply want to capitalise and they are desperate to do that.
Our advice would be to steer clear of things that create an unnecessary risk for you. If it all sounds to good to be true then it almost certainly is. Please bear this in mind when considering any type of offshore scheme or investment as the penalties can be anything from 10% - 100% of the capital or benefit gained...
[ add comment ] ( 158 views ) | [ 0 trackbacks ] | permalink |
( 3 / 119 )
Random Entry
