Why can a company not pay you net instead of gross?
 

Sorry if this is a silly question, but why can't companies pay the income tax, NI etc and then pay their staff a net wage?

Are there any situations in which this could be possible?


thanks

Isn't this already the case? I mean most companies deduct all this at source and pay net anyway or are you alluding to further benefits?

I didn't explain that at all well did i?! I mean pay as tax-paid, so the employee doesn't actually have to personally pay income tax. Like a gift i suppose. Does that make sense?

employers contributions ?

:eek2:

What i'm trying to avoid is anything classed as "taxable income". I'll ask the right question eventually!!

The only way that works, is if it is a gift. ie a holiday or such. You reach the target required, you get the holiday and they issue you with a certificate to show they have paid the tax on that benefit for you. Never heard of it ever being done with hard cash :)

Hope that makes sense, I am useless at explaining stuff :D

The closest that I have come to that is a company offered to take some money (a few thousand) from my salary and pay my wife as an assistant. That way there was no tax on that amount.

Steve

Yeah these are the sort of things i mean. So is there an upper limit on the benefit, does anyone know?

It's do-able in almost all large organisations, and for each reason that suggests it's onerous or complex there's another that shows it as a benefit.

It fails a bit on the small employer, say of part time staff or the people that have transient work styles.

Where do I sign up?

But it's all cloak and dagger Tel, as if the IR find out they'll tax you as a benefit in kind anyway, regardless what your wife's taxable allowance was.

only way to cheat the system is to become a MP :)

Right, ok. That's not good then!

Not sure if this is any good, but you can have a look :)

http://customs.hmrc.gov.uk/channelsP...yType=document

Or self employed!

Show me a black cab driver that pays the 'real' amount of tax they should...

wouldnt the simple way to be claim a given sum as expenses, fuel being a good one or travel etc this is not tax deducatble to the employee.
I also doubt there is a limit to the expense claim although if we are talking 1000's I imagine the IR may get wind and look into it {unless it was split over the full 12 months} ;)

Telboy...........isn't this just PAYE ?? :)

Shaun

If it goes through any expense system it has to be coded and then you would be taxed on benefit in kind.

Companies get audited and expenses are one of the main things they look at.

Steve

Tel,

What you are asking, in reality, is PAYE. The construction industry operates schemes where sub contractors (individuals and businesses) can be paid net or gross depending upon certification.

Of course you can engineer anything (as Nacro has pointed out) to keep the revenue happy that income tax/tax on the benefit has been paid (and NI where relevant) but the employee sees the payment/gift/benefit as effectively "tax free". You just gross it up.

Yeah, it does have to be coded, but to what level though ;)

Mileage is a perfect example.
Drive up to 10,000 miles @0.40p per mile - safe
Claim the rest at the lower mileage rate.
5K per year easy.

Shaun

the thing is, not sure what its like down sarrrf, but oooop norf the people i have spoken to who did taxis for a while, said that if everything was "legit", they simply could not afford to live a reasonable life.

Is that a 'black' cab driver, or a black cab driver

One is probably against PC rules