Time for plcs to put their house in order

Article Abstract:

The abolition of advance corporation tax from Apr 6, 1999, which was confirmed in the UK government's Mar 1998 Budget, will give further impetus to the reform of the capital structure of leading public limited companies (Plcs). Recent tax changes may encourage UK companies to move up to the gearing levels usually seen among US and continental European companies. If this happens, then there will be a need for 100 billion pounds sterling of share buy-backs. It is becoming increasingly important for Plcs to reduce the cost of capital as they face growing international competition.

Public Finance Activities, Corporate Tax Rates, Taxation, Corporate taxes, Corporations, Tax rates

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Tax loophole brings more profit online

Article Abstract:

UK law does not permit information technology (IT) contractors to be self-employed, as they normally work for only one client at a time and work standard hours using the client's equipment. However, it is legal for IT contractors to work as a one-member limited company. Under this system, the contractor invoices the recruitment agency through the limited company. IT contractors can in this way significantly reduce their tax liabilities, as they pay themselves, as a director, a small monthly salary. The rest of their income is taken in quarterly dividends.

Corporate Taxes, Contracts, Independent contractors

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Nothing in life is free

Article Abstract:

The UK Conservative and Labour parties are both seeking to gain support by promising to reduce income tax, and this is overshadowing all other political issues. However, it is important for voters to realise that many of the public goods on which their lives depend must be funded through taxation. It is unwise to believe that it will be possible to continually reduce income tax, as this will have a severe impact on social investment. Organisations such as Real World are seeking to make the general public aware of this.

Column

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