We're All In This Together .....

[Guest]

Andrew Lansley faces questions after leaked emails reveal at least 25 senior staff have salaries paid to companies. Department of Health apologises over tax deals 'misunderstanding'

http://www.guardian.co.uk/politics/2012/feb/15/department-of-health-tax-deals-misunderstanding?CMP=EMCSOCEML657

Wasn't it John Birt who tried not to be on the BBC's payroll? :yikes:

[ahinton]

Andrew Lansley faces questions after leaked emails reveal at least 25 senior staff have salaries paid to companies. Department of Health apologises over tax deals 'misunderstanding'
http://www.guardian.co.uk/politics/2...P=EMCSOCEML657

This, however is a common practice - indeed, a good deal more common than some people seem to think; whether it's either any "worse" or more common in the public sector than in the private sector I have no idea, but what seems to be forgotten here is that contractors who pay sums to companies rather than employees to provide services also thereby avoid employers' liability for NIC Class 1 which, when public sector employers do it, decreases the burden on the taxpayer who funds them. There's nothing intrinsically illegal and, for that matter, nothing fundamentally immoral in a contractor taking on limited companies or self-employed sole traders to provide services rather than employing people to do so although, of course, care has to be taken to ensure that the strength, viability and validity of the contracts involved are not compromised as a consequence.

[ahinton]

Wasn't it John Birt who tried not to be on the BBC's payroll? :yikes:

Quite possibly, but he was far from alone; indeed, I recall a time when redundancies were offered to some BBC staff who were then hired as self-employed sole traders or directors of companies to provide the services that they had previously provided as employees (in fact one even did both).

[amateur51]

Well it seems to be news ro some people who you would have thought would have been au fait with it ...

http://www.guardian.co.uk/politics/2012/feb/16/civil-servants-union-tax-schemes

[aka Calum Da Jazbo]

well self employed is a term that means one thing when it is a tax dodge for a corpocat and another when it is part of the great recasualisation of labour that is going on .... enough to make one a Fabian innit

[MrGongGong]

well self employed is a term that means one thing when it is a tax dodge for a corpocat and another when it is part of the great recasualisation of labour that is going on .... enough to make one a Fabian innit

For all the rhetoric this so called "government" are hell bent on making it harder and harder for people to be self employed (and the last lot didn't make it easier either !) ............

[ahinton]

For all the rhetoric this so called "government" are hell bent on making it harder and harder for people to be self employed (and the last lot didn't make it easier either !) ............

Well, it seems as though they're not making it especially hard for self-employed people to form small companies and get them contracted rather than their individual directors!

[teamsaint]

governments love self employment, Costs them nothing now, and nothing in the future, since the SE get close to zero benefits.

It must make genuine, hard working self employed people sick to see what are, in fact highly paid public servants getting a nice little tax break.

This break may save the government a few pounds, but it would be better if it were all above board, and we paid them a bit less.

Easy solution.

[Serial_Apologist]

well self employed is a term that means one thing when it is a tax dodge for a corpocat and another when it is part of the great recasualisation of labour that is going on .... enough to make one a Fabian innit

http://www.youtube.com/watch?v=gT7EJvc2XQ

[ahinton]

well self employed is a term that means one thing when it is a tax dodge for a corpocat and another when it is part of the great recasualisation of labour that is going on .... enough to make one a Fabian innit

No - well, not this one, anyway. All employed statuses can be used as tax dodges by those who wish to do so; one has only to consider the employers who employ people over state retirement age in order to avoid employers' NIC1 liability, only to have their employees sub-contract work to others, rather than actually employing people who are under state retirement age directly - and that's only one of heaven knows how many such dodges. SOme of these get-arounds are harder in France; for example, self-employed sole traders' social charges do not cease when they reach state retirement age as is the case over here but continue indefinitely as long as they continue to work (so it's no wonder that there's such a black market for work over there).

[Lateralthinking1]

Appalled. This is an absolute scandal. How long before we hear it is going on in DWP and HMRC too?

[ahinton]

governments love self employment, Costs them nothing now, and nothing in the future, since the SE get close to zero benefits.

It must make genuine, hard working self employed people sick to see what are, in fact highly paid public servants getting a nice little tax break.

This break may save the government a few pounds, but it would be better if it were all above board, and we paid them a bit less.

Easy solution.

Not necessarily; as I mentioned, employers get around NIC1 liability when they contract companies rather than employ individuals and when those employers are public service ones that reduces the liability for the taxpayer who funds those employers. I do take your point about "genuine, hard working self employed people", of course (especially being one of them myself!), but the message that this sends out to some of them is to incorporate rather than continue on a sole trader basis.

[ahinton]

This is an absolute scandal. How long before we hear this is going on in DWP and HMRC too?

I don't know, but I assume that many people have already assumed that it goes on there and in many other public and private sector workplaces.

[MrGongGong]

Having always been self employed , what I have noticed is for those of us who are sole traders (which includes the vast majority of musicians ) things have got much tighter so that if one has temporary cash flow problems (try being ill for a couple of weeks with no sick pay etc ) there is no way to negotiate spreading things like tax and Ni while one recovers. When I started my first three years tax bills were based on my first years profit, this effectively meant that I had very low tax while I got my business established (and then gradually paid it all over the course of several years). If I was starting out today , it would be significantly harder to develop a significant body of work to become viable as a business. Surely we should be encouraging people to be self reliant and develop careers that make the most of their talents and skills ???

[teamsaint]

No - well, not this one, anyway. All employed statuses can be used as tax dodges by those who wish to do so; one has only to consider the employers who employ people over state retirement age in order to avoid employers' NIC1 liability, only to have their employees sub-contract work to others, rather than actually employing people who are under state retirement age directly - and that's only one of heaven knows how many such dodges. SOme of these get-arounds are harder in France; for example, self-employed sole traders' social charges do not cease when they reach state retirement age as is the case over here but continue indefinitely as long as they continue to work (so it's no wonder that there's such a black market for work over there).

so how do you suggest we stop taxpayers being ripped off by these somewhat underhand payment methods?