Paying your “fair share”
You may have read or heard in the media Government outrage at the way in which some very wealthy people were using tax reliefs to (legally) reduce the amount of tax they pay. I confess to some bemusement at this outrage as I thought that what was tax reliefs were for. The Government has other ideas and has now decided that there should be a limit to these reliefs. Charitable donations were to be included in these restrictions but following an outcry (not least from the charities themselves) this idea has been shelved. However, the government are ploughing on and have recently published their consultation document on the above which could have seemingly absurd consequences.
The link to the document is HERE.
At its most brutal a scenario could arise where an individual earns a £100k in employment, has losses of £100k in self-employment in the same year and can only off-set £50k of the losses against his employment income.
So, with no money at all, our struggling entrepreneur will have to pay income tax of around £9,900 and NI of around £5,300. This is apparently to ensure that the ‘wealthy’ (in this instance someone with no money) pay their ‘fair share’.
HMRC are asking for opinions and we have until 5 October to tell HMRC what a load of **** this is. Perhaps I should wait until I calm down a bit before I send in my thoughts?Talk to Barnes Roffe today