Millionairres Who Pay 10% Tax

#1
Menzies Campbell asked a question today in PMQs that highlighted the fact that millionaire managers pay less tax than their cleaners.

Here is a BBC article debating the issues

Thanks to tax breaks, private equity firms currently pay just 10% tax on gains made on companies they invest in.

Private equity executives pay taxes on their basic pay and bonuses, but a large part of their income comes from carried interest, or the 20% slice of profits they can claim once they have paid back their investors.

This money is classed as a capital gain and, as such, is subject to a tax level of 10%. Critics say it should be charged at a normal tax rate.
 
#2
I think that the majority of Private Equity principals would agree that paying such a reduced rate of tax on their carry is inequitable, however:

The reduced rate ( through taper relief) is there to encourage entrepreneurship which, it can be argued, it does:

You can't blame the individuals concerned for minimising their tax (after all do you ever pay more than you have to?)

Doubtless the rules will be changed in due course.

PB
 
#4
Only problem is, how many of these 'entrepreneurs' are making donations to the two main parties? If there is a change it will be slow enough to give these 'oligarchs' (spelling(?)), time to move their money away from any new form of extra tax, an only pay a nominal amount extra too look if they are conforming fully to the new system.
With the two/three main parties I can only see the rich getting richer and poor at best possibly staying where they are. Our political system is now so corrupt that you and I will have no bearing on the direction or implementation on any significant changes in policy, (basically we don’t have the cash to persuade them otherwise).
 
#5
Sven said:
Menzies Campbell asked a question today in PMQs that highlighted the fact that millionaire managers pay less tax than their cleaners.
You didn't mention what idiot was responsible for this Sven.
 
#6
Ahem:-

Ming's Parliamentary salary = £60277
Tax on Ming's Parliamentary salary = £15524.58

Ming's Parliamentary 'expenses' = £123617
Tax on Ming's Parliamentary expenses = £0

Ming's total tax bill = £15524.58
Ming's total Parliamentary income = £178669

Ming's tax rate = 15524.58 / 178669 = 8.7%

Nuf said?
 
#7
The catch here is, these guys are paying fcuk all tax, there employees are. if they buggered off to say switzerland, they'd be paying fcuk all tax, there employees wouldn't be in the british tax system so would be paying bugger all tax into the pot either...


What do you want?
 
#9
Even Slim Will pays tax on his umble pension.
john
Flat rate tax for all.
Last time I saw a written version it was first £12 K zero tax then EVERTHING above, at 22% and no, nil, zero, zilch exemptions for anything.
 
#10
Sven said:
Menzies Campbell asked a question today in PMQs that highlighted the fact that millionaire managers pay less tax than their cleaners.
Maybe my maths are not what they were, but 10% of a huge amount is a great deal more than PAYE and NI rates on £6ph

So the "pay less tax" argument is total bollocks...


This is not to say I agree with the way that Private Equity partners are playing the rules, but Gordon Brown made those rules...
 
#11
jonwilly said:
Flat rate tax for all.
Last time I saw a written version it was first £12 K zero tax then EVERTHING above, at 22% and no, nil, zero, zilch exemptions for anything.
This fine for employees, but gross income (turnover) tax is not a "fair" tax for the (genuinely) self-employed or running a business - these have to be taxed on a nett (profits) basis

Maybe all businesses (whether incorporated or not, so including partnerships) should be taxed via corporation tax?

The biggest problem with the UK tax system is that it is just sooooooooo complicated; simplification is essential although I am not sure a flat rate is the solution.
 
#13
Its not pay less tax, its pay less percentage. At the end of the day, 10% of their pay is far more than the 33% (approx) that we pay per annum!

Its no real wonder that we are a nation of slackers and social grabbers when successful people are penalised at every turn, penalised for a governments failings! Surely MP's should have performance based tax, the worse they do, the more tax they pay, TB would be skint!
 

OldSnowy

LE
Moderator
Book Reviewer
#14
People pay the tax that they have to, under the rules, and G Brown makes the rules.

Catch up with a few back copies of Private Eye, which has raised this issue time and again (including in the latest issue). The facts are simple - Gordon Brown has stated, many times over many years, that he was going to deal with billionaires who, while appearing to live in the UK, were domiciled for tax purposes overseas. He has refused to do so, because it would affect his party coffers.

A simple case of Socialist hypocrisy, dissimilation, and lies. Nothing new for this government, and something that we have all come to expect I'm afraid.
 
#15
OldSnowy[b] said:
People pay the tax that they have to, under the rules, and G Brown makes the rules.[/b]
Catch up with a few back copies of Private Eye, which has raised this issue time and again (including in the latest issue). The facts are simple - Gordon Brown has stated, many times over many years, that he was going to deal with billionaires who, while appearing to live in the UK, were domiciled for tax purposes overseas. He has refused to do so, because it would affect his party coffers.

A simple case of Socialist hypocrisy, dissimilation, and lies. Nothing new for this government, and something that we have all come to expect I'm afraid.
Correct! Nobody is rushing into the Local Inland revenue saying "Look I've go a bit of surplus cash hanging around, please take this".

When you start talking taxation to people its absolutely amazing how few people know about it.

http://www.ifs.org.uk/

The link does not provide light reading! However reading some of the stuff available when you have a sleeples night provides some interesting facts including Gobmint Reveneue and where it comes from.
 
#16
Ancient_Mariner said:
Ahem:-

Ming's Parliamentary salary = £60277
Tax on Ming's Parliamentary salary = £15524.58

Ming's Parliamentary 'expenses' = £123617
Tax on Ming's Parliamentary expenses = £0


Ming's total tax bill = £15524.58
Ming's total Parliamentary income = £178669

Ming's tax rate = 15524.58 / 178669 = 8.7%

Nuf said?
Do you pay tax on your expenses?

I certainly don't.
 
#17
They're running out of ways to continue the class war. They've banned hunting, and no-one believes that unemployment is anything other than self-inflicted these days, so today's evil bosses are the private equity managers.

Never mind that the companies they take over would be in the sh1tter anyway, or that nobody's going to take a risk if there isn't a reward, some people are so filled with jealousy and bitterness that they'll find anything to contiune the fight.
 
#18
gingwarr said:
Do you pay tax on your expenses?

I certainly don't.
Not on my expenses... but MPs "expenses" cover more than just expenses:

If I billed my employer for the "expense" of employing my girlfriend as my secretary, I'd be told to shove it; likewise my daughter as a researcher.

But this is standard fare for MPs "expenses"
 
#19
Cyberhacker said:
gingwarr said:
Do you pay tax on your expenses?

I certainly don't.
Not on my expenses... but MPs "expenses" cover more than just expenses:

If I billed my employer for the "expense" of employing my girlfriend as my secretary, I'd be told to shove it; likewise my daughter as a researcher.

But this is standard fare for MPs "expenses"
Some expenses are taxable, which is why most companies don't pay them.

If you were a contractor you would be claiming for your wife /etc as a secretary. The money an MP gets to employ staff is not expenses but an allowance, because most MPs do need to run a private office of some kind. Yes some employ members of their family, some dont.

As for the actual title subject, I can understand why they do have tax breaks, every penny they have is at risk when they buy a company, no Ltd staus to protect them but at the same time we prbably do need to review just how the system actually works so they do get a fair reward for their risk taking, but at the same time we don't get ripped off at the same time
 
#20
As has been said if you tax too highly people who generate wealth they will go elsewhere with their money and you end up with nothing.

This current government tax you on almost everything – twice. Road tax, petrol tax and now want to charge you for driving on roads you already paid for. Then they take tax on what you earn. I consider 40% too high to pay on my income and so have moved offshore and have been so for 7 years. So the Inland Revenue now get 40% of nothing from me.

Tax is a fine line and in the UK they are well over that line. I know of about 10 people in my office who are Brits but because of high taxation are effectively offshore and pay zero UK tax. As a rough estimation that’s probably 200k+ that has to come from somewhere else, and that is just in my office. In the 70’s Labour taxed the rich and the rich left. People who earn a lot of money will do so elsewhere if you try to take too much of it away.
 

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