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It's not much of a problem in the UK. A great many of our clients (and ourselves) use the standard dividends + minimum wage method of paying themselves - that i

by swombat 12y ago

It's not much of a problem in the UK. A great many of our clients (and ourselves) use the standard dividends + minimum wage method of paying themselves - that is, the ones who own their businesses, i.e. have not taken funding. HMRC accepts this method as a way for business owners to minimise their taxes. As I recall, the argument is something along the lines of "I am paying myself a salary for the basic director duties but effectively working for free on the company day to day, and collecting parts of the earnings as an owner." It works fine and is very common for small businesses in the UK. I guess this goes to show how contextual accounting advice can be. On that note, I'll add that I'm ever so glad that in all my interactions with them HMRC have been polite, friendly, supportive, helpful and nothing like the abusive business murderers that the IRS appear to aim to be - even when I fucked something up that was obviously my fault. I don't understand why the IRS feels that they need to be such assholes about everything. They should see their job as what it is: an essential part of the infrastructure that supports the economy and, indirectly, supports businesses. Their role should be to make business easier, not harder.

tptacek 12y ago
I've never had an unpleasant interaction with the IRS. Unlike virtually any other creditor I've ever dealt with, the people I've talked to who actually work for the IRS have been courteous and helpful. I'm not the only person who's said this. The IRS has acquired a personalized reputation for being jerks, not unlike that of Customs, but which totally doesn't square with how the agency actually acts. I say this as someone who once had a pretty decent unexpected 5-figure liability that I had to work out with them. I also don't feel like zealous enforcement of unremitted payroll tax is particularly abusive, since that's essentially describing companies stealing from their employees.
- swombat 12y ago
  Well, that's good to hear! This reputation the IRS has makes me worried about the idea of some day operating in the US. It's good to know that they actually employ human beings rather than attack dogs. From what you describe, they sound much like HMRC. And yes, withholding payroll tax (or VAT) and not passing it on to the government is pretty crappy. HMRC is typically understanding if this is a few months or even a year down the line and they think the business will be able to pay up - they frequently agree payment plans for such things - but three years without noticing kinda takes the piss.
  - mikeash 12y ago
    I get the impression (and I could be woefully wrong) that the IRS, kind of like the USPS, has an awful reputation that was justified some decades ago, has turned it around because of that awful reputation, but inertia means the reputation persists long after the underlying reasons have been remedied.
- larrys 12y ago
  I think I'm a bit older than you. They were "jerks" back when I started in business. But things have changed as you've pointed out. I had a run in with the labor department at my first company. I wouldn't exactly call them jerks (or nice) but I was able to get them to cut in half a 5 figure amount they assessed me (a lawsuit was filed) by having a personal meeting with the local office head. Without an attorney. After I cut the deal I then said "oh one more thing can I have 5 years to pay this back?". And he agreed (I didn't need the 5 years, it wasn't a large amount, but I thought why not?)

by swombat 12y ago

tptacek 12y ago

I've never had an unpleasant interaction with the IRS. Unlike virtually any other creditor I've ever dealt with, the people I've talked to who actually work for the IRS have been courteous and helpful. I'm not the only person who's said this. The IRS has acquired a personalized reputation for being jerks, not unlike that of Customs, but which totally doesn't square with how the agency actually acts. I say this as someone who once had a pretty decent unexpected 5-figure liability that I had to work out with them. I also don't feel like zealous enforcement of unremitted payroll tax is particularly abusive, since that's essentially describing companies stealing from their employees.

swombat 12y ago
Well, that's good to hear! This reputation the IRS has makes me worried about the idea of some day operating in the US. It's good to know that they actually employ human beings rather than attack dogs. From what you describe, they sound much like HMRC. And yes, withholding payroll tax (or VAT) and not passing it on to the government is pretty crappy. HMRC is typically understanding if this is a few months or even a year down the line and they think the business will be able to pay up - they frequently agree payment plans for such things - but three years without noticing kinda takes the piss.
- mikeash 12y ago
  I get the impression (and I could be woefully wrong) that the IRS, kind of like the USPS, has an awful reputation that was justified some decades ago, has turned it around because of that awful reputation, but inertia means the reputation persists long after the underlying reasons have been remedied.
larrys 12y ago
I think I'm a bit older than you. They were "jerks" back when I started in business. But things have changed as you've pointed out. I had a run in with the labor department at my first company. I wouldn't exactly call them jerks (or nice) but I was able to get them to cut in half a 5 figure amount they assessed me (a lawsuit was filed) by having a personal meeting with the local office head. Without an attorney. After I cut the deal I then said "oh one more thing can I have 5 years to pay this back?". And he agreed (I didn't need the 5 years, it wasn't a large amount, but I thought why not?)