Current Affairs The General Election

[tsubaki]

Stobarts has been a mess for a while iirc. But anyrate, bringing up one company, (private owned isnt it?) isnt really the point. I could equally bring up a company that started with 2 blokes, now employs 600 folk, and is a FTSE 100 as an example of said blokes having support via tax stuff to take the plunge 20 years ago.

The central issue is that equalising income dividend and CGT removes a key driver for small businesses to start in the first place.

... but really few people - not even Labour - have problems with people starting businesses and then growing them like that. Stobarts was one of them for a long time without ever (IIRC) being condemned, and there isn't anything in the Labour manifesto that targets that sort of thing (in fact the one thing everyone complained about - the £500 dividend cap - would benefit firms in the medium to long term by encouraging them to keep cash within the business).

What people do have problems with is people who didn't do any of that coming along, wrecking them and walking away with a fortune afterwards (often after they've been paid a fortune by the firm already), which is sadly too common nowadays.

 

[OnlyBlueWillDo]

You are totally missing the point mate. I have not said one word about large companies. One key driver for folk starting and growing a business is the ability to have dividend income taxed differently than income tax.

One is a tax on earnings, the other is a tax on taking the risk to end up employing people.

And you are missing my point, there is nothing wrong with what Labour has proposed to increase taxes on companies to raise the living standards for the rest of society.

I do not see how any of it will put people off from starting a small business.

 

[OnlyBlueWillDo]

Its a complete myth whoever says it.

Tory politicians were the ones saying it mate.

 

[roydo]

And you are missing my point, there is nothing wrong with what Labour has proposed to increase taxes on companies to raise the living standards for the rest of society.

I do not see how any of it will put people off from starting a small business.

They will have dividend income taxed the same as income tax. That is a disincentive to start a business. Like I said, they/you dont understand that.

Not that arsed about modest tax rises on established businesses, within reason, but not many companies start big.

 

[abelard]

Telling these folks to "work harder" and "pull up your bootstraps" doesn't really work.

We have a serious, heartbreaking problem here that will only be compounded if these Tory rats succeed next week.

Nearly 1 million children under 11 face Christmas 'without warm home or fresh food this year'

More than one in 10 young children likely to spend festive season without the basics, charity warns

www.independent.co.uk

In the interests of balance though, their parents surely earn enough money to buy a home, and just need someone from the Council to tell them how Rightmove works

 

[tsubaki]

They will have dividend income taxed the same as income tax. That is a disincentive to start a business. Like I said, they/you dont understand that.

Not that arsed about modest tax rises on established businesses, within reason, but not many companies start big.

It isn't, though - it is a disincentive to pay yourself via share dividends.

 

[roydo]

It isn't, though - it is a disincentive to pay yourself via share dividends.

Which is an incentive to start a business/take the risk. You must stop correlating Amazon or Costas with a small business feeling its actually worth their while giving it a go.

Thats my point, which you just underline as being correct every time you reply. Small businesses are very risky. There needs to be an incentive to start one. If a small business does well, it employs people and pays tax and might become Facebook.

But the risk must be rewarded, or what is the point? Ergo. There is a disconnect between you/Labour, and business. Despite what words are in a manifesto. They have said they will tax Dividends the same as Income Tax.

 

[abelard]

Which is an incentive to start a business/take the risk. You must stop correlating Amazon or Costas with a small business feeling its actually worth their while giving it a go.

Thats my point, which you just underline as being correct every time you reply. Small businesses are very risky. There needs to be an incentive to start one. If a small business does well, it employs people and pays tax and might become Facebook.

But the risk must be rewarded, or what is the point? Ergo. There is a disconnect between you/Labour, and business. Despite what words are in a manifesto. They have said they will tax Dividends the same as Income Tax.

They are taking steps to end the widespread phenomenon of people sitting on piles of wealth but paying lower taxes than working people, because their income comes via dividends rather wages. This is why Mitt Romney or Warren Buffet famously pay a lower tax rate than their employees.

I agree that ending the exemption on capital gains tax when you sell a business you started yourself is a bit much, but Labour is also doing more than any other party to foster small business, and to eliminate the many structural inequalities in the economy which make it so hard for them to compete.

For example: setting up a national investment bank to provide seed capital, establishing a consultancy service to provide information and administrative support to small businesses, taking steps to stamp out the late payment of invoices, reforming the many flaws in the apprenticeship levy, vastly expanding the funds available for skills training, reversing village bank and post office closures, eliminating the tax loopholes which only large firms can afford to take advantage of, lowering energy rates specifically on small businesses, ending quarterly reporting for small business, improving access for small business to local and national procurement, and perhaps most importantly of all, reforming business rates - which under the Tories are set to increase by an average of over £3500 in the next years (even as they are reduced for larger firms).

Beyond this, there are also considerable spin-off benefits from other policies like modernising infrastructure, expanding childcare, or boosting R&D spending back to globally-competitive levels.

You might be surprised how many small business owners will be voting for Labour.

 

[tsubaki]

Which is an incentive to start a business/take the risk. You must stop correlating Amazon or Costas with a small business feeling its actually worth their while giving it a go.

Thats my point, which you just underline as being correct every time you reply. Small businesses are very risky. There needs to be an incentive to start one. If a small business does well, it employs people and pays tax and might become Facebook.

But the risk must be rewarded, or what is the point? Ergo. There is a disconnect between you/Labour, and business. Despite what words are in a manifesto. They have said they will tax Dividends the same as Income Tax.

Not really, and I think you are taking the situation as it is now (where people do that for tax purposes) and assuming that it is the best way of doing it (and ignoring the other problems with dividend payments into the bargain).

To use your example, if you are starting a business then you probably aren't going to be taking that much money out of it (via dividends, salary or anything else) - the money is going to go back into the business, to help it grow and to make you money further along the line. That is where the risk is, to put your return off some time into the future.

It is only later on when its hopefully become a success that you are going to expect to start to see proper returns from it. Personally, I think creating an environment where genuine small businesses can grow and be a success is what is important there, not allowing a situation to continue where solely for tax purposes a situation exists that coincidentally also allows people much higher up the food chain to continue raking it in.

 

[roydo]

You might be surprised how many small business owners will be voting for Labour.

I will be, yeah. Having a bloke in the post office, (with no real knowledge) deffo trumps the main incentive to start one in the first place being binned.

 

[roydo]

if you are starting a business then you probably aren't going to be taking that much money out of it (via dividends, salary or anything else) - the money is going to go back into the business,

Again. Exactly. That is how it works ffs! The incentive is to create a business, the money in the early years you take out is as a dividend, usually husband and wife, You have to actually live.

That is being removed as an incentive. Like I have said, you/Labour dont get the connection. You just see Apple and Warren Buffett.

 

[Kurt.]

Just seen that they’ve moved tonight’s leaders debate from Southampton to the tory stronghold of Maidstone instead.... johnson is a spineless sack of 5hit.... how can any of you seriously consider voting Tory ?

 

[tsubaki]

Again. Exactly. That is how it works ffs! The incentive is to create a business, the money in the early years you take out is as a dividend, usually husband and wife, You have to actually live.

That is being removed as an incentive. Like I have said, you/Labour dont get the connection. You just see Apple and Warren Buffett.

Yes, and the sole reason for doing that is because its a bit more tax efficient to do so than taking a salary would be.

The fact that people much further up the food chain, who actually didn't run the risk of starting and building a business, are making far more than that business owner is because of that same tax efficiency is the connection here.

 

[Methuselah]

And you are missing my point, there is nothing wrong with what Labour has proposed to increase taxes on companies to raise the living standards for the rest of society.

I do not see how any of it will put people off from starting a small business.

What it will do though, is massively increase unemployment.

 

[roydo]

Yes, and the sole reason for doing that is because its a bit more tax efficient to do so than taking a salary would be.

The fact that people much further up the food chain, who actually didn't run the risk of starting and building a business, are making far more than that business owner is because of that same tax efficiency is the connection here.

So by that logic you apply a tax rate to the big nasty companies, that will be detrimental to the hundreds of small companies that might be big one day? Like I say, complete disconnect with reality