High pay doesn't have to equal tax dodging but we know it does, and that definitely includes contractors who seem to think that accepting reduced benefits (which is a falsehood) means they are entitled to not pay tax (especially NI & employers NI) by taking it as dividends. It helps the big businesses and it helps the contractors but it doesn't help the public purse and so shouldn't be allowed. Contractors always forget that they can get annual leave, pension, sick pay etc. but they are supposed to pay themselves it. The arrangement means it isn't their "client" that isn't paying it but their own Ltd.
If contractors are such essential specialists then they should have no problem earning the same amount after tax as they do now by charging a higher rate to cover the higher tax payments.
Tbh, Employers NI is a ridiculous tax that should be scrapped anyway. It's daft to have such a barrier to employment when the money can be collected another way anyway. Keep the money in businesses and employees pockets instead and let them spend it in the economy.
I know about 10 blokes well who are earning over 100k and about about 50 over 50k, all of them are pretty stand up guys and pay fair tax/ the tax required without loopholes and most are PAYE.
How many of the below do undeclared cash jobs:
Plumbers, builders, electricians, painters, joiners, taxi drivers, window cleaners, babysitters, small shops, markets, bookies, criminals, anyone receiving tips etc etc?
Dividends isn't tax dodging, as you can only pay a dividend if in profit, and if you're in profit you're paying 19% corp tax. Either way, it's getting taxed and you're also losing the benefits of being PAYE, paid holidays, furlough, pension contributions etc etc. Plus you can only get a dividend as a shareholder or a director, and by putting yourself in that position you're putting yourself at exceptional risk, this is what somebody that has never owned or run a company can ever understand. They think they do, but they "get" about 2% of it.
The charging higher rates to enable paying the extra tax doesn't work, all that means is the first guy to put up his rates, is the first to go bankrupt as he gets no work. The guy that undercuts gets all the work but then he goes bust as he's charged too little and not factored in for the rainy day.
With major construction you also get the scenario of only the bigger companies can charge the higher rates, due to only them meeting tender criteria (of having adequate credit) which is a load of balls. This is B/S as it's all their sub-contractors that still end up doing the work, for worse rates, and giving the bigger companies 30-60 day credit, the small companies that "don't have the required credit for the contract", and up being the big companies bank!
The big companies credit actually comes from the smaller companies who give the credit to the company that has stole their work, it's a ridiculous system, but the small contractor has no choice. Then the big company goes bust and takes all those small companies with it. It's all massive, massive risk (especially for the little company, that gets little benefit), and it's probably similar in other sectors.
I'm mainly talking of the guys earning less than 200k, anyone above that should be being audited with a fine tooth comb. It's those we need to concentrate on, those doing cash jobs and the major multinationals funnelling money out of the country to avoid tax.