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UK Tax – HMRC – Are Mark’s Methods Valid?
Hi folks,
Has anyone from the UK had success using Mark’s methods? There are a lot of differences between the ATO and HMRC. For example ‘earnings’ is used instead of ‘income’. ‘Earnings’ is defined as:
Meaning of ‘earnings’
For tax purposes, the word ‘earnings’ in relation to an office or employment means:
- any salary, wages or fee
- any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money’s worth [Payment in kind]
- anything else that constitutes an emolument of the employment
- This is a wide definition. The second and third bullets ensure that all
money payments that are similar to salaries, fees and wages are taxed as
earnings. Examples are bonuses, commissions, tips, overtime pay and
extra money earnings of any kind.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim00520
The term ’emolument’ is defined as:
“The profit arising from office, employment, or labor; that which is received as a compensation for services, or which is annexed to the possession of office as salary, fees, and perquisites. Any perquisite, advantage, profit, or gain arising from the possession of an office.”
https://legal-dictionary.thefreedictionary.com/emolumentSo, it doesn’t seem as simple for UK folks as it is in Aus. It seems as though HMRC have made this much tighter than the ATO has. Any thoughts anyone?
Wouldn’t any claim that any money arriving in my account as “productivity of labour” be useless owing to the definition of ’emolument’ including the word ‘labour’?
Then there is this:
- We regard the meaning of “earnings” and “emoluments” as broadly similar.
- In April 2003, The Income Tax (Earnings and Pensions) Act 2003 (ITEPA
2003) replaced all of the existing Schedule E legislation within the
Income and Corporation Taxes Act 1988 (ICTA 1988), including the word
“emolument”. Rather than imposing a charge to tax on emoluments and/or
treated emoluments, ITEPA 2003 imposes a charge to tax on “employment
income”. - Employment income consists of both: general earnings (which, in large part, represents what was formerly referred to as ‘emoluments’ and/or ‘treated emoluments’) and specific employment income.
https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim02010
It would be great to hear from anyone that can add any info to this or has any ideas.
Thank you 🙂
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7 Replies
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The tax dept can only tax that which is over and above your expenses. They can also only tax that which you confess is any of those things they listed. So you use definitions that aren’t listed by them as ‘income’. They can only tax profits and if you don’t have any profits they can’t tax what you do have. It’s all a game and you just have to know how to play it. The richy riches create foundations and donate their money to those and then it is no longer classed as income. They also put all of their property into trusts so they no longer own them and they can’t be attacked to claim alleged debt as when they no longer own them there is no liability for them. They ensure they have no money or properties whatsoever in their names, so most of them have zero income and liability whilst they have access to millions. This might seem unfair but they just know how to play the game to their advantage. None of it is unlawful. Here’s some information from Gumshoe sleuth in the UK that you might find interesting.
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Thanks for the info morag.
Any ideas anyone on what to call incoming money when dealing with HMRC the UL tax people?
It seems we can’t use ‘productivity of labour’ due to the definition of ’emoluments’, although that deinition was from a legal dictionary site so may not match HMRC’s definition. Amazing that they seem to be claiming a share of a wo/mans labour!
Anyone have any experience with using Mark’s methods in the UK?
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There is also no option on the UK tax form to state that you will not be making a return next year 🙁
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Not in the NZ one either 😟
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Thanks for the Gumshoe Sleuth tip. ‘Sweat Equity’ in fair echange, no profit is involved.
