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Discussion Starter #1
It's probably been said before and there are probably many "exceptions" that can be written down, but here is a thought.

Why are so many people who are in work for companies that make profits and pay dividends and bonuses to Upper Management having to claim Income Support (or whatever it is called these days).

Should it not be the case that since the ability of some companies to make money is dependant on them paying wages below that which allows families to live in a relative comfort and force them to claim allowances, that they should be taxed/forced to pay the money back into the system?

I know there will be lots of examples of where this wouldn't be feasible, small firms etc, but why should we as tax-payers have to fund the profits of large companies?

I am hoping this opens a serious discussion and not a slagging match.
 

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A number of people claiming income support (funded by UK tax payers) work for foreign owned companies, so the profits the company make go abroad, therefore are not usually spent in the country that provided them.
And then, to rub salt in the wound, the tax office let's the company off a rather large unpaid tax bill.

The mind boggles.
Mick.
 

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Why are so many people who are in work for companies that make profits and pay dividends and bonuses to Upper Management having to claim Income Support (or whatever it is called these days).

Should it not be the case that since the ability of some companies to make money is dependant on them paying wages below that which allows families to live in a relative comfort and force them to claim allowances, that they should be taxed/forced to pay the money back into the system?
Good questions. I think you're talking about Universal Credit paid on the basis of low income. The gov.uk site says Income Support is only for the disabled. This surprised me, but here it is: https://www.gov.uk/income-support

Is the complication here that the benefit is usually paid to people who can only find one part-time job? At first sight it would sound reasonable for an employer to pay minimum wage for a part time, low skilled job.

I can sense this debate heading quickly towards discussing the so-called gig economy, and the grey area between employment and self-employment, permanent and temporary, part-time and full-time.
 

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Is the complication here that the benefit is usually paid to people who can only find one part-time job? At first sight it would sound reasonable for an employer to pay minimum wage for a part time, low skilled job.
But, of course, some companies make a virtue out of part time employment as it enables them to not only pay low wages but reduce costs. Low earnings limit for NI is currently £118. So If you employ three part timers on £117 per week no NI is payable by either the employee or employer. If the same amount of wage is paid to one employee who works three times as many hours then NI is payable on £234 both by the employee and the employer so the employer's cost goes up by his NI contribution.

Technically if someone has more than one job then NI is payable once the combined earnings go over the limit so an employer might well prefer someone who only has one part time job and hence eligible for benefit.

A similar reason may apply to those who advertise their virtue in employing older people. Over pensionable age no NI is payable at any wage level.
 

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Discussion Starter #5
Good questions. I think you're talking about Universal Credit paid on the basis of low income.
Is the complication here that the benefit is usually paid to people who can only find one part-time job? At first sight it would sound reasonable for an employer to pay minimum wage for a part time, low skilled job.

I can sense this debate heading quickly towards discussing the so-called gig economy, and the grey area between employment and self-employment, permanent and temporary, part-time and full-time.
But, of course, some companies make a virtue out of part time employment as it enables them to not only pay low wages but reduce costs. Low earnings limit for NI is currently £118. So If you employ three part timers on £117 per week no NI is payable by either the employee or employer. If the same amount of wage is paid to one employee who works three times as many hours then NI is payable on £234 both by the employee and the employer so the employer's cost goes up by his NI contribution.

Technically if someone has more than one job then NI is payable once the combined earnings go over the limit so an employer might well prefer someone who only has one part time job and hence eligible for benefit.

A similar reason may apply to those who advertise their virtue in employing older people. Over pensionable age no NI is payable at any wage level.
Yep, Universal Credit is probably what I meant, but in the bigger picture I get the issue of how hard it would be to ensure everyone is paid by the actual employers rather than a top-up from the Govt, and to ensure everyone pays their bit which is hard enough at the moment.
I will throw this out there

Bin National Insurance, it is just a tax lets be honest
Replace the current Personal Tax scheme and replace with a
Overhaul all taxes that are paid on almost everything.

I reckon if you actually took your time and modelled everything properly there would be more winners than losers and in the long term be better for the economy.
Yes the lobbyists would argue for whoever they are in bed with, but with a clean slate for all, and no effin loopholes like the current scheme has, I think actual tax take would increase ! Reducing the Welfare state payouts that subsidise business while allowing Govt's to use thos funds in better areas, NHS, Schools, Care for the elderly!
 

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I went to Sweden earlier this year, they pay a lot of tax, however they also have suburb local amenities and amazing things like town heating systems - whole towns are centrally heated

It makes it a very level playing field, but there are still problems there and growing nationalism
 

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I saw a documentary a couple of days ago on the US solution to this. You criminalise being poor and the ones you don’t get into the military can be put in prison from which the wealthy can derive great earnings. Which was nice.
 

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But, of course, some companies make a virtue out of part time employment as it enables them to not only pay low wages but reduce costs.
Exactly, and the real question is whether we can think of a way to prevent or reduce these abuses, without damage to those who want to work part time. I'm not convinced it can be done solely through the tax system.

There was a long-standing problem with the employment of "contractors" in place of permanent staff, especially in th IT field, and this was partially addressed by changes to employment law as well as taxation. (Although the legislators appeared to give up half way through). The paradox is that those contractors willingly traded their security to be highly paid, whereas increasing numbers of insecure jobs are now paid a pittance, exploiting the powerless.
 

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My partner works part time as we have a child, not all part time workers are forced to against their will or are paid low wages, there are many factors to answer your question, but questioning companies profits and dividend payouts is just making an assumption and stereotyping a lot of businesses, there are some that pay thier taxes and look after their staff. Companies also pay 13% employers contribution on wages so they are contributing to the welfare too not just tax payers.
 

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Without any expertise in this area (or indeed any other), I think the answer lies in a wholesale review of employment law.

Once upon a time, there was no employment law: no security, no protection against unfair dismissal, no holiday entitlement, no sickness protection, no pension provision, no maternity rights. All of those things eventually became legal requirements.

Now they've been eroded - some might say out-manoeuvred - by companies adopting forms of employment contract which avoid the legal responsibility to provide those things. The intent of the original laws, to ensure working people were well treated, has been overcome.

It's a job for parliament.
 

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When I'm the Emperor, all business income generated in the UK will be taxed in the UK. A lot of the tax avoidance by Amazon, Starbucks, Facebook and the likes are only possible because although they makes £10,000 billion profit every year, they have to pay consultancy or intellectual property license fees of £9,999.999 billion to their subsidiary company in the Cayman Islands. So they pay less tax every year than I do.

As Emperor, one would personally be prepared to pay extra tax (one will have a concubine to support, after all).

Zero hours contracts winds me up too, although I suspect there will be half a dozen zero workers who like them for their flexibility or something. When I'm the Emperor employers who used zero hours contracts will have to pay the NI on every contracted employee's maximum "hours", even if the employee is not used to the full extent of their maximum hours. That might encourage employers to give proper contracts, rather than the cheap-skate ones.

It'll probably end up with some people being laid off.. but when is a **** job better than no job? There will be winners and inevitably losers, who might blame their Emperor (although all forms of critical comment migth be "frowned on", let's say... :D )


Ralf S.
 

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It’s really simple. They do it because they can. I’ve said this on the closed Civil Service thread (it wasn’t the reason the thread was closed). Companies all work out what the minimum number is that they have to pay in order to get people to turn up. If people will turn up for minimum wage, then that is what they get. If they won’t turn up for minimum wage, then they get paid more until there are enough bums on seats to get the work done.

That’s it, the end.

All that working tax credits (or whatever they are called) have done is shift the point at which people will show up. If you get a tenner from the employer and a fiver from the government, you’re on 15 an hour, and you’ll make a decision about whether it is worth poling up to Amazon on a cold Monday morning. Working tax credits are a god awful system, and they really should be got rid of, but it is politically very hard to do so.

A simplistic solution would be to say “no more tax credits” and then jack up the minimum wage to compensate. Unfortunately, the group of people whose labour is really only worth a tenner an hour will become unemployed.
 

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When I'm the Emperor, a

It'll probably end up with some people being laid off.. but when is a **** job better than no job? There will be winners and inevitably losers, who might blame their Emperor (although all forms of critical comment migth be "frowned on", let's say... :D )


Ralf S.
Only Emperor? Why not go for God?

Ming the Merciless. Ralf the Ruthless.


Not just being facetious note what Ming says in the first few seconds.
 

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It's the current business model,pay low so the government tops up wages and don't pay taxes which pay for the infrastructure that allows your business to flourish
 

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A simplistic solution would be to say “no more tax credits” and then jack up the minimum wage to compensate. Unfortunately, the group of people whose labour is really only worth a tenner an hour will become unemployed.
The trouble is, some people can't work.. (real or imagined). You need some kind of a safety net for them... yet if/when that safety net becomes quite comfortable, a load more people who can work, suddenly decide that they actually can't.

So, the people who can't work would have to live in abject poverty, or you make sure that they (and the "floaters") get a shed-load of public money "just in case" they really can't work, rather than because they actually can't.

I guess there's a middle ground that the various flavours of political parties think lies more one way or another.... but meanwhile there's less money for hospitals and the like.


Ralf S.
 

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I couldn’t work two years ago due to a heart attack. I got out of the hospital, put in a claim for ESA and PIP, I was told I’m only entitled to my stamp being paid without any payments made personally to me due to not paying enough NI Contributions between the pervious two years 2015-2017. I was never told what the “ enough “ amount you would have to contribute before receiving contribution based ESA would have to be in order to receive payments.
I couldn’t even claim income related ESA as they said my wife earns more than £114.17p per week which the law say you can both live off.
Now in 2019, I work for a big company and earn £1,203 per month take home pay even if that’s a five week month.
You get very little help, or sympathy off the Government or the workplace. I’ve discussed the opportunity of them paying us a living wage and not just a minimum wage, but that has fallen on deaf ears.
My ambition is to climb the ladder for more wages or get retrained and get a different job, as I’ve learnt ( in this country anyway ) you can only rely on yourself for finances


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