This insurance policy provides an insured employee a pre-determined percentage of its salary for a definite time period, while the employee is temporarily injured or sick or is pregnant and it is referred to as the short term disability insurance. While this insurance provides a sort of social security to the employees, it doesn’t come under the category of social security disability insurance.
How it is used?
Benefits of this insurance, i.e. a definite percentage of salary, can be availed after 1-14 days of medical declaration of temporary disability of the insured. But there’s a catch here; an insured employee is bound to use his entire available sick days first before starting to avail the insurance benefits. This policy/rule to use entire available sick days first is introduced in order to eliminate any difference between people availing insurance benefits due to a short term illness or a short term serious injury or pregnancy.
Short term disability insurance is paid for either by the company of insured employee or by employee itself. The former option is more frequent than the latter. However, a company can always leave it on employees to take care of their short term coverage that may come with some tax advantages. An employer has right to ask for some medical proof for said short term disability of an employee. Besides, an employer can also make an employee use his sick days first before letting the provision of short term disability kick in.
Eligibility Criteria
There are certain criteria for being eligible to this insurance cover, without which an employee can’t claim for benefits of this insurance. The two most important eligibility criteria include:
Some Facts
There is a time period limit to the advantages provided by this insurance to an employee, which usually vary from 10-26 weeks. However, if an employee wants the advantages to be extended further then he or she must opt for long term disability insurance. There is one thing to remember that unlike short term disability insurance, the long-term disability insurance is much lenient with different regulations. Although, it is not necessary to have the insurance cover financed by the employer, it is imperative on the part of the employer to establish it for his employees.
Tax evasion is illegal; it is punishable by fines and/or a prison sentence. The term covers a wide variety of money related crimes, including not paying taxes at all; paying some tax, but not declaring everything; and money laundering activities. This list is not exhaustive.
There have been many famous cases where tax evaders have been successfully prosecuted. The most famous example is probably that of the Mob boss, Al Capone, who was imprisoned not because of his crimes of murder or bootlegging, but of not paying taxes on the money he had ‘earned’ by illegal means. It was the accountants that caught Capone, not the FBI, as it were.
In Britain there is the requirement that all accountants register themselves, and this was finally accomplished in 2008, although the law requiring them to do this became fully operational in December 2007. Now all registered accountants are required by law to disclose any thing they find suspicious about a client’s accounts. If they do not do so, they will be liable to prosecution. If they suspect a client of any illegality, they must fill in a Suspicious Activity Report (SAR) and must not inform the client that they have done so, as this would also result in legal action against the accountant. There can be no “Tipping Off” a client. It used to be that anything said to an accountant who was employed to deal with a person’s tax matters was confidential. This is no longer the case. Thousands of SARs have been submitted to Her Majesty’s Revenue and Customs department since this legislation came into force.
Tax evasion offences are committed by people from all walks of life, from billionaires to the person on a low income. For example, if a person is on social security benefits and also doing part-time work and does not declare both sets of income on the tax form, then he/she is guilty of tax evasion.
Billionaires in the UK pay ridiculously low taxes, if they pay any at all and figures have been reported in the British press, of 54 UK billionaires paying, between them, only 14.7 million pounds. Of this James Dyson, the inventor, paid 9 million pounds. The British government allows foreigners who claim that they are not domiciled in the UK (despite many of them having British passports and living in the UK for many years) to only pay tax on money that is brought in to the UK.
There are tax havens which are used by the wealthy to avoid paying taxes in the UK. These are based mainly, in the Channel Islands, the Caribbean and Switzerland. Successive British governments have failed to close the loopholes in the law which would effectively tax the wealthy. For example, in 2009 Barack Obama the US President, and former UK Prime Minister Gordon Brown, pledged to close down tax havens, but little appears to nave been done so far.
On the one hand tax evasion is illegal but it seems that tax havens and investing off-shore are legal, so tax evasion laws really only work against people who are not super-rich.
Short term flat share is becoming increasingly common for a number of reasons and can be much less of a hassle than a commitment to share a flat or house with others for six months or a year. People who are taking up short term flat share rentals do so for a number of reasons, and if you go online, you will be able to find fairly good flat sharing deals in most parts of the country. Of course, a lot of theses offers are for flat sharing in London due to the fact that property prices are so high. Having said this, however, there are good deals all over the country, with offers ranging from a double room in a mansion, to sharing with students and having sole use of only a single bedroom. Prices vary according to the location of the shared property and the type of accommodation on offer.
Flat sharing on a short term basis is good for people who want to attend events in the UK but who live abroad. For example a European or American wishing to attend the Edinburgh Festival might find it easier to share a flat for the duration of the Festival rather than to try to find a hotel room in the city at that time. Business people who are in Britain for work, but who don’t know anyone in the UK might want to flat share as a way of at least having one or two people to go out with in the evenings. It can be really lonely staying in a hotel if you are not a particularly reserved person. This type of arrangement also suits students, who often go to a University which was not of their choice through the Clearing process, and who find that there is no available accommodation on campus, and who have no luck with the student accommodation service. Academics also find this type of living arrangement suits them, if they are on sabbatical for a term and having to do research at a university away from their home.
Depending on where you want to live and what type of accommodation you want, you can expect to pay from 300 to 500 pounds a month for a double room in a flat, sharing facilities with others. You are usually asked about your occupation, age and whether or not you smoke, if you have a pet, and sometimes your sexual orientation, so that your prospective flat sharers can have an idea if you would fit in with them. This is sometimes unacceptable, so you can choose not to give such personal details. However you can also ask questions about the other residents to ensure compatibility.
If you have just got a new job and have to move to another part of the country, then you should consider flat sharing as it gives you an opportunity to look around the place to see which area you would like to live in. You would not be pressurised into buying a property immediately and then living to regret your choice because you did not have time to look around for a new home.
Whatever your circumstances, there are a lot of short term flat sharing opportunities and these can be found online as well as in the more traditional way of finding information, in the classified ads section of local newspapers.
Double taxation may be payable if you live abroad but work in Britain or if you live in Britain, but work abroad. Her Majesty’s Revenue and Customs have agreements or treaties with most countries, which mean that an individual or company does not have to pay tax twice on the same money earned, or gained in profits. If you fall into one of these categories, it would be worth checking out HMRCs web site to find out what agreement has been reached with the country you are living and working in. Agreements are updated regularly, so you really should check to see if anything has changed in the tax agreements or treaties as they are also called.
What you don’t want is to be taxed twice on the amount you earn. For example, if you are a UK national and working in Saudi Arabia as a teacher, trainer, instructor, lecturer or professor, or working in an educational establishment, then you are exempt from tax in Saudi for two years. If a Saudi Arabian national works in an educational institution in Britain, then he/she is also exempt from tax for two years under the terms of the reciprocal agreement between the two countries. If you live and work in Saudi Arabia for longer than two years, then the reciprocal double taxation agreement or treaty will come into play.
Recent updates to the double tax treaties between the UK and Japan and the Faroe islands came into force in August 2010, so if you are a Japanese citizen working in Britain or a Briton working in Japan, you should check out what the differences may be for your particular situation. Also if you work in the Faroes but are a UK citizen, check out the updates to the double tax agreement.
There are admissible and inadmissible taxes within the regulations for double taxation. Inadmissible taxes are the ones that you can’t get out of paying despite the double taxation agreement or treaty between the UK and the other country. For example, if you are a UK citizen working in Cameroon, and are not registered as a resident of Cameroon, you are liable to pay a fifteen per cent ‘special tax’ on income earned or gained from Cameroon. Any other income you have cannot be taxed in that country, of course, only money or profits made there.
However, there are usually exceptions to a rule and this one in Cameroon is for air transport businesses. There is a tax exemption from any Cameroonian tax on profits, distributed profits, income or capital gains on all profits which are derived form a UK business.
At the moment there is some concern about dividends paid to share holders; if a company has already paid tax on its profits, the argument goes, then share holders should not have to pay tax on that same money. However as the company and the share holders are not a single entity, the double taxation agreements do not apply.
As you may have noticed the number of working mothers is decreasing more and more each year, but since flexible working conditions were brought into place it still hasn’t increased the number of women who choose to keep working after having a child. In the UK all women as entitled to paid, maternity leave but the amount allowed to take varies from company to company. On average a women will take 26 weeks maternity leave and an extra 26 are allowed to be taken if paid unpaid. Son on average a working mum will return to work when their new baby is just 6 months old, with a small minority who will return when the child is one.
The average weekly childcare cost in the UK is around £160 a week for a place in a nursery, the costs rise significantly higher if it’s based in central London. This means the average cost for putting a child into a nursery is £640 a month. Many women who go back to work are forced to go back part time as looking after a young child can be demanding so charging from £640 a month for a nursery place is an insult.
Child nursery places in central London can be as much as £345 a week in some places amounting to £1,380 a month. Babies are often more expensive to pay for as the level of care is greater, they need feeding and changing regularly as most toddlers can feed themselves and are in the process of being potty trained.
The UK has the highest cost of childcare in the world, the cheapest place to find childcare is Portugal as it costs as little as 4% of monthly wages compared to 33% in the UK. Childminders also charge as much as £152 a week or £400 in some parts of London. The only way to save on childcare costs on the UK is if you have parents that have stopped working and are able to look after your children for you. As the majority of people are having children later the chances of having free childcare is really slim as most grandparents will not be able to care for a small child as they are frail already.
Unfortunately unless you are on a low income there is no support for you, you have to bear the inflated costs of childcare or be a stay at home mum and let your partner bring home the money. In most cases women cannot afford to stay at home and need to contribute to the monthly expenses even if it means working for a paltry sum with most going on childcare.
The former Chancellor of the Exchequer, Denis Healey explained the difference between tax avoidance and tax evasion in this way:-“The difference between tax avoidance and tax evasion is the thickness of a prison wall.’ Tax avoidance is legal.
Tax avoidance is finding ways to ensure that you pay less tax than you would normally be expected to do on earnings, profits or gains, legally. For example, if you have some savings and don’t want to pay tax on the interest from them, you could open an Individual Savings Account or buy National Savings bonds or make deposits into National Savings accounts. If you do this, you don’t pay tax on the interest which accrues. This is a perfectly legally acceptable way of not paying tax.
Someone who pays the right amount of tax on money declared is ‘tax compliant’ i.e., that person is paying the amount the law requires. However, he/she is not paying tax on all the money he/she has earned or gained that year. A person who refuses to pay a percentage of tax because of objections on moral grounds of a government’s policies (for example the amount of the defence budget) is known as a “tax protester”. This is not classed as tax evasion or avoidance, but is in a separate class.
Tax havens are still operating, and those who make use of them are classed as tax avoiders. Millions of pounds are lost by Her Majesty’s Revenue and Customs service because of these tax havens for the wealthy every year. However the UK government has been reluctant to legislate against these over the years. Such havens are the Channel Islands, some of the Caribbean islands and Switzerland. There are also off-shore companies set up by the very wealthy, so that they do not pay tax in Britain, which is higher than taxes in some other countries. In the past there have been ‘tax exiles’ wealthy Britons who have chosen to live in countries outside the UK so that they were not liable to pay high British taxes. When this kind of money leaves the country, economic damage ensues, and so the government tries to make tax laws easier to attract those tax exiles back to Britain as would any government.
Of course a lot of planning goes into setting up an off-shore company, and not everyone can do this, but if you consider the case of the entrepreneur Richard Branson, whose money is tied up in his companies, he could retire, liquidate his assets and pay virtually no taxes if he were to move abroad. Of course he may not do this and might willingly pay UK taxes, as the laws might have changed by the time he retires.
Independent financial advisers can help you avoid paying taxes, as this is not deemed suspicious. If you earn a lot of money, you may object to paying high taxes. However, those with a social conscience will realise that by avoiding paying taxes they are depriving others of services such as the National Health Service, the police force, etc.