So which is better value:
14.75% of income to provide all covered benefits?
Or
4% of income to provide 70% of covered benefits?
You can't easily compare groups using those stats. The tax paid is net of all reliefs etc. An obvious difference between the groups is that the self-employed are much more likely to need to provide for their own pension than employees who may have employer-funded schemes available - so the apparently lower tax paid by the self-employed could be due to the tax relief received.If you look at the income tax actually paid by both employees and the self-employed, as mentioned in my previous post, employees with income of €100,000 and over have an effective tax rate of a little over 5% more than their self-employed equivalents.
It's an interesting point. I hadn't really considered that public servants don't have an employers contribution made for them. I suppose public servants might consider their pension levies to be their contribution towards PRSI benefits/contributory pension.So if anyone is arguing that the self employed should pay higher PRSI as a result of the lack of employers contribution, surely the same argument should apply to say a minister or any other public servant?
The tax paid is net of all reliefs etc.
That doesn't really make much sense though. Why would you allow reliefs to continue in existence if you increase the tax rates of those who avail of the reliefs - such that they end up paying the same tax that they would have paid with no reliefs...That is the point. Everyone pays income tax net of whatever reliefs are available to him or her. Some are entitled to more reliefs than others for whatever reason.
The bottom line for the government would be the average effective tax rate actually paid in various income bands; not the marginal rates.
As it turns out for incomes in excess of €100,000, (indeed upwards of €35,000) the self-employed pay less.
That is why I am suggesting this as a possible reason for the 3% additional USC charge on self-employed with incomes in excess of €100,000.
No, there is no justification for that.
Nor is there any justification why employees get a PAYE credit, but self-employed don't.
Brendan
I may be wrong but from any figures I've seen large parts of the public service including ministers also have no employers PRSI paid.
As for the PAYE annual allowance, I think this is in part a credit given to the PAYE sector, to acknowledge the fact that they have their tax deducted at source during the year and do not get the benifit of their funds in full, until an annual tax payment must be made. Is the current figure the correct one to reflect whatever benefit this conveys, possibly not, but I do think in principal it is deserving.
Sorry, I don't understand your point here.Ultimately, I think the method in which the self-employed invoice, get paid and subsequently pay tax on their earnings needs to be changed to remove the doubt in peoples minds as to whether their earnings are ultimately all declared and taxed.
Furthermore, that tax is paid on an ongoing basis by the self-employed and not just once a year (possibly a monthly payment with a final end of year adjustment, once the annual return is done ?)
How many self-employed regardless of age have income over €100,000 pa?
How many self-employed regardless of age have income over €100,000 pa?
PleaseThe damage the extra tax can do can't be worth the extra tax the measure will yield.
How many self-employed regardless of age have income over €100,000 pa?
This is a tax calculator. Key in Not an Employee and, say, 200K income. You will see that you are better off in 2015 than 2014. The USC has gone up, but that is the effect of the 1% extra rate applying to all and clearly does not reflect any additional 3% on the 100K in excess of 100K.I use a Chartered Accountant and Registered Auditor and his opinion strongly disagrees with yours. Naturally I prefer your supposition Duke,
I'm afraid your Chartered Accountant/Registered Auditor needs to brush up on her CPD
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