Polly can be ignorant at times

Start with taxing all incomes at the same rate – a worker on an average £26,000 is taxed £5,981, but someone earning the same in dividends pays zero. Those on the 50% tax band only pay 36% on their dividends.

Bleedin\’ \’ell Polly!

Don\’t you know that (in effect) basic rate income tax is collected on dividends by the company? The reason that no more basic rate is paid by the recipient is because we\’ve already used the company to collect it?

14 comments on “Polly can be ignorant at times

  1. I presume the Dutt-Pauker fortune is managed through such a series of lackeys, peons and cut-outs so that they don’t have to filthy their delicate consciences with the crass exploitation of their beloved proletariat.

    It would also server to protect them from any awareness of the basic mechanisms by which their “Belle Epoque” is funded into their ever-flowing glasses.

  2. Sorry, except the fact that she has to approve her accountants writing a cheque for 36% to HMRC … Hence her confusion.

  3. curious….
    “Polly can be ignorant at times” is remarkably complimentary.

    Tim’s not developing a crush on the woman, surely?

  4. Nice trick by the Left – tax in a sequence of small slices and then lie by claiming only the final small slice as the real rate.

  5. When I was a small limited company instead of a wage slave I had to pay 19-21% corporation tax on gross profit (no taxable allowance there!).

    If I withdrew dividends above a certain amount these would have been taxed at about 30%, just over I think.

    So I would have been paying over 50% on income most would be paying 40% on, though to be fair I wasn’t paying NI.

  6. For years HMRC and its predecessor the Inland Revenue have wanted to stop small businesses from avoiding paying their full whack in PAYE+Employees NI+Employers NI by using dividends.

    IR35 was an attempt at blocking this (which failed due to the incompetence with which it was written), equally the so-called Settlements Legislation has also been used unsuccessfully to stop ‘income splitting’ between husbands and wives (usually where the wife has a far lower income than the husband).

    The fact that IR35 was at one point costing HMRC £1.35 for every £1.00 collected due to HMRC losing the vast majority of cases in the tax courts has led them to effectively stop using the legislation as anything more than a big-stick for the unwary (quite a lot of people I would add).

    HMRC would love to bring in legislation to prevent small companies from issuing dividends and thereby force them to pay everything as PAYE+Employers NI+Employees NI, but they’ve never got the necessary balls to do it.

    However, the current economic crisis might be just the excuse they have been looking for to do this and in the process destroy what is left of the British entreprenurial economy.

    Articles by people like Polly are slowly laying the ground rules for this sort of thing.

  7. First Frances? Now Polly?

    Has exposure to Germany brought on Tim’s mid-life crisis? Do we need an emergency evacuation back to Portugal?

  8. Is ignorance an excuse?

    Given the number of followers this ‘opinion-creator’ has, does she never feel the need to apologise when she gets salient facts wrong?

    She never sets the record straight, as far as I know, so I wonder, is it really ignorance?

  9. Actually a £1,000 pre-tax profit taken out as a dividend by the 50% taxpayer is being taxed at 48.88% … 20% Corp Tax (assuming a small co, more if bigger) and the rest in income tax.

    And what’s with the headline Tim?
    “Polly can be ignorant at times”…. “can be”? “at times”?

  10. @Vir Cantium:

    Now work out what it is for the same £1,000 as PAYE including both Employers and Employees NI (presuming they are already earning £150,000 to qualify for 50% tax).

  11. John,

    I make that example taxed at about 58%. But then you don’t get your stamp do you? But, then, if you’re on £150k+ I’m sure you can afford the Class 2 to keep that going 🙂

  12. Did everyone stop being British and I didn’t notice?

    Polly can be ignorant at times in precisely the same way as a functioning grandfather clock can be ticking at times.

Leave a Reply

Name and email are required. Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.