Reply to post: Re: Lies

Court of Appeal ruling offers hope for UK umbrella firm workers chasing holiday pay


Re: Lies

Another fallacy. Companies earn income. People earn income. The two are distinct entities when it comes to tax.

Companies declare a profit, and pay a tax on that profit. That is part of the company accounts.

People earn income, you are liable to pay income tax on all the income you make.

You cannot transfer money from one to the other without there being tax implications, especially from Company to Person, which is income, adds to your total annual income, and is taxed at the same rates as everyone else.

Dividends are paid out of post tax profits, so have already been taxed at the corporate rate. This is why they appear to get a preferential rate when added to income. But that "relief" is only equivalent to the tax already paid in the company profits. If you receive dividends over your personal tax allowance you are taxed fully on the portion over your allowance, same as all tax allowances.

Now, if you want to take "pay" out of the company without paying the appropriate income tax, be prepared for a long stay at Her Majesty's pleasure, that is tax evasion.

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