Reeve an unstoppable force or a puppet?

[justasking111]

I honestly can't decide if she's ploughing her own furrow regardless of the views of other MPs, Starmer can't interfere because of other turmoil.

Or whether Starmer is settling her up for a fall.

It's really perplexing.

He is more of a cat person anyway

Starmer was a barrister - private sector. Reeves worked for HBOS - private sector. David Lammy was a barrister - private sector. Yvette Cooper was a journalist on The Independent - private sector. That’s the four great offices of state covered, do we need to look at the rest of the cabinet?

If this is truly the case it is even more extraordinary how hapless and hopeless they all are.
PS. I was a journo at the Independent. It really isn’t something to particularly admire and certainly no bastion of integrity.

His dividends were his earnings.
Driving high earners and entrepreneurs out of the country is not the win you think it is.
Do you work in the public sector?

Wikipedia tells me 2:1. There seems to be an awful lot of false information about Reeves floating round. As an aside, I'd forgotten about the plagiarism scandal.

If you believe this you’ll believe anything.
An account manager at Cazenoves told me that many successful business owners whose accounts she manages have left or are planning on relocating to Italy, Dubai and Portugal.
Well done Labour! .

There's now a golden visa for Portugal. Lucky beggars, a lovely place to relocate to.

@GreekDogRescue “Dividends were his earnings”. There is the problem. Dividends are taxed at the lower corporation tax. Earnings are taxed via income tax. If Labour close this loophole they would be doing the right thing. This is why the self employed bellyached when they got no help in Covid. They hadn’t paid the income tax!

Most barristers are self employed but there is the “employed bar” which is CPS and government barristers. So Starmer has been both. As far as I can see, David Lammy never got pupilage and never worked as a barrister. He worked in the USA after his degree from Harvard in 1997 until 2000 when he became a MP. You can be “called to the bar” but you are not qualified to practice ans a barrister unless you complete pupilage.

@GreekDogRescue said His dividends were his earnings.
Driving high earners and entrepreneurs out of the country is not the win you think it is.
Do you work in the public sector?

Dividends are a return on money invested in shares or similar.

If you dress up what are, in reality, earnings from your trade or profession as dividends so as to avoid tax then you are using a loophole and shouldn't be surprised when it's closed. The guy who messaged in on the radio was the proprietor of a business doing plumbing in a small town. Not a high earner or, in any real sense, an entrepreneur.

And as to the barb at the end No. I work for a well known charity.

His dividends were his earnings because that meant, at one point, paying a lower rate of tax, especially once you were a higher taxpayer. It was a wellknown dodge for people with limited companies. What’s the point of high earners and entrepreneurs if they avoid paying tax?

Would you prefer it if he stopped 'doing plumbing in a small town'?
And why assume that he isn't a high earner because he's a plumber? That's very derogatory.

He also doesn't get holiday pay, sick pay or a juicy pension when he retires. If he has 10 days off over Christmas, he earns nothing. Do you still get paid when you have time off?
We should be encouraging start ups, not making it harder. Many of them go on to employ people who do pay income tax.

None of that answers why it's right that they can avoid tax by dressing their earnings as dividends.

I make no judgement on plumbers but the caller was an ordinary joe not Jim Ratcliffe (Ineos).

Lack of holiday/sick pay and need to cover other overheads are an occupational thing in self employment and will be built into the hourly rate.

IANAL but I was once headhunted to do a particular type of casework. I needed to have chargeable hours worth 3-4 times my salary to cover overheads etc.

I'm very happy for you that your stint in self employment allowed you to charge quadruple your salary to cover your overheads.
That isn't how it works for most small businesses.

I'm not saying SE is an easy gig. I do welfare rights for a living so I know it's not.

I know how much of the £100 (say) one hour callout for an electrician is consumed in overheads.

The point though is whether what's left of that £100 after expenses is earnings or dividends.

How would you prefer to incentivise risk?

Different question.

The point at issue was people frigging the system by taking what should be earnings as dividends to as to reduce tax. That's a loophole I'd like to see closed - if it isn't already.

Entrepreneurs often don't take their full dividends preferring to leave them within the company as an IOU to build up the company which results in more employment, a bigger leaner company. You can't do that with PAYE.

It isn't a different question at all. It's entirely relevant, but I see you cannot answer it. Why on earth would anyone branch out on their own with no incentive to do so?

@justasking111 if they're not taking them they're not replacing earnings.

If they're still taxable as dividends in that situation and are genuinely being used to invest in/build the company then that's a problem that needs an asnser.

Yep, I'm one of them. But apparently that's me 'frigging' the system!

@TheNuthatch if you're using dividends to build the business long term and being taxed on then maybe that's a problem that needs dealing with, unless of course you're at liberty to take the money out at will.

My gripe is with those who take enough as salary to ensure NI or NLW is covered and the rest as divis solely to reduce their tax bill.

I don't understand your question. If directors don't take dividends but reinvest in the company so that it grows, it's cheaper than a bank loan.

It's what pension funds do. Reinvesting your money to make it grow if you're in the private sector.

If dividends are reinvested like, as you say, a pension fund so as to grow the business we're in the same place.

If, OTOH, they're dressing earnings taken out of the business as dividends rather than salary so as to pay less tax there's an issue.

Overview here:

https://www.unbiased.co.uk/discover/tax-business/running-a-business/salary-vs-dividends-taking-income-from-your-company

You need to factor in CT which starts at £1

Someone taking dividends will pay that tax on profit

Sigh....

We bought a small run down business, husband and wife with one employee two days a week. The till was a Tupperware box in the filing cabinet.

We invested another heap of money, revamping the shop, counter, putting in a top of the range til, buying small tools and plant.

As the money came in every penny was banked and spent in the business. We doubled the turnover in the first year.

We survived on an income from another source.

In comes customs and excise surprise visit. They went through everything which we'd computerized instead of using shoe boxes and Tupperware till. Because we'd doubled the turnover, taken no drawings and employing two more staff, one an apprentice.

I panicked and phoned the accountant explaining their searching questions. His response.

"Tell them to fuck off"

My books were absolutely straight, the accountant had taught me how to do them and checked them every quarter.

I can only surmise the previous owner had purloined any cash sales which we didn't.

Customs after two days found £4 I had made a mistake with.