Alex Andreou takes Toby Young to task over the details of taxation. Then lets slip this nonsense:
His position also conveniently assumes that these members of the haute monde do not have access to talented accountants, umbrella companies, offshore trusts, wives in Monaco, creative avoidance schemes or any income that comes from dividends.
Erm, income from dividends doesn’t produce a lower tax rate, sorry, but it doesn’t. The system is set up so that the company takes a slice off the dividend payment and sends it to the Treasury. Then the individual, if they’re in a higher tax band, must send more. It doesn’t end up entirely and exactly the same as the taxation of regular income, but the system is most certainly trying to make the income tax paid roughly the same.
We’ll have to call this Ritchie’s Law. Muphry’s Law is that any correction of typos or grammar will contain one or more spolling of grammer mistakes worse than those being complained of. Ritchie’s Law is the corollary that applies to taxation.
As with, of course, that famous moment when Ritchie decided to correct the calculation of dividend taxation and got it wrong.