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jonjk

Is all business bent?

5-Jun-11 20:23

I have a friend who has a small retail business with a turnover of around £400k, net profit is around £150k/£200k as best I can ascertain. He syphons off around 25% of the profits bypassing the tax man and it's virtually impossible to prove it's being done because the wholesalers are just as bent.

Most would say 'So what, good luck to him' but what pisses me is that I worked hard all my life and stuck with job security (28 years with the same company) rather than chasing the big money which has borne fruit now that I'm retired (early) in a reasonable pension.

I don't wish him any ill (after all he is a friend) but whilst he's creaming all the dosh illegally I'm having to pay taxes on my income. Sometimes I wonder are there any honest people anywhere or has everyone got a price?

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DanajustDana

28-Jun-11 01:01

Unreasonable taxation on the small businessman, in both the US, & UK, often results in cheating the tax man, although I don't advocate this practice, it does allow a small percentage of these business's to stay open, remember, when you own a business, 80% of the monies goes right back into the business. Yes, unnecesarry, & unreasonable taxation have created a new breed of tax cheat.

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rusty_shackleford12

29-Jun-11 23:03

i would say that the general tenor of american business is at best flippant towards and at worst contemptuous of rules in general.

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Raven2005

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2-Jul-11 07:16

Would many go bust if they paid all their taxes ?

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rusty_shackleford12

2-Jul-11 19:55

Raven2005 said: Would many go bust if they paid all their taxes ?

i highly doubt it. that said, i think that most small businesses do, in fact, pay their taxes. big businesses get the special treatment enabling them to, say, set up a fake office in zurich and avoid paying any taxes at all.

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jonjk

2-Jul-11 20:12

i think that most small businesses do, in fact, pay their taxes.

Ah yes Rusty, he also pays taxes but not before creaming off £20/30k annually. A previous post suggested small businesses ploughed back profit into the business. He did, tripling his stock in the first year. Don't forget they're not just cheating on income tax but also VAT which I might add you and me are paying for
to go into his pocket rather than the governments.

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rusty_shackleford12

5-Jul-11 19:35

jonjk said: i think that most small businesses do, in fact, pay their taxes.

Ah yes Rusty, he also pays taxes but not before creaming off £20/30k annually. A previous post suggested small businesses ploughed back profit into the business. He did, tripling his stock in the first year. Don't forget they're not just cheating on income tax but also VAT which I might add you and me are paying for
to go into his pocket rather than the governments.

here in the states we don't have a value added tax, and it's highly unusual for a small business to be so prosperous that he can actually afford to actively conceal income from the government - it takes money to hire people who know how to hide money.

here, most small business income is taxed directly to the owner as if it was his own income. so if you're not paying your business taxes, you're not paying your personal taxes. i would suspect that upwards of 99 percent of people, excluding contract laborers, pay their taxes in good faith.

the irs recently started requiring ebay and amazon to turn over data on their sellers. many sellers previously didn't report or under-reported their incomes from these sites so that should be interesting. also, many small businesses try to avoid taxes by unjustifiably classifying regular employees as independent contractors. the employer avoids payroll taxes and mandatory worker's compensation insurance premiums but the government shouldn't lose revenue in this case because the tax burden is merely shifted to the independent contractor.

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Species 5618.

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12-Jul-11 06:36

To be fair whats worse, the guy who did all the hard work skimming some of the profits, or the government taking it so they can bail out more banks or claim more expenses?

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renegadeterry

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13-Aug-11 06:15

tell 'im,hey,I wanna share.So what if he says no.

What if he says okay.

50-50.

if he refuses,just tell him,hey I had to try.ya never know.

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Agent Incorrigible

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11-Sep-11 20:48

I'm a small business owner, and I can say the taxes I pay are not that onerous.

As an Limited Liability Corporation, the majority of my tax burden is paid simply as income tax.

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Agent Incorrigible

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11-Sep-11 20:55

*Damn it, didn't mean to hit the post button*

We don't skim revenue or over-pad our expenses. We pay our taxes with a certain degree of indifference.

By indifference, I mean few are happy to pay out money. I don't jump up and down with joy paying taxes, but at the same time I understand taxation is necessary in our current socioeconomic design. It is what it is, thus a balance leading to indifference.

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46SIZE2

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4-May-12 17:04

I agree with Species and don't forget all the midnight oil burnt and risk associated with setting up your own business, if it was that easy, you'd all be doing it!!

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46SIZE2

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4-May-12 17:05

PS and how many out there ask the guy coming to do the job "is it cheaper for cash" ??????

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DanajustDana

13-Jun-12 01:14

46SIZE2 said: PS and how many out there ask the guy coming to do the job "is it cheaper for cash" ??????

Cash is king, no paper = no taxes = no liability, once again, a new open door for tax cheats!

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Raven2005

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20-Sep-12 00:00

Theres also another train of thought.
It can cost the taxpayer/gov more to collect tax from small business than the acual amount due.

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