Universal credit rules hit self-employed

Draft regulations setting out conditions and procedures for claimants of the proposed Universal Credit (UC) will impose new reporting requirements that put the self-employed at a disadvantage, tax advisers are warning.

Gabelle’s Paula Tallon, a member of the ICAEW’s SME tax committee sounded the alarm this week after reviewing the draft regulations and 59 pages of accompanying notes.

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Self Employed

skhan | | Permalink

This will make life tough for small self employed likes cabbies hair dressers etc

squay's picture

Self Employed

squay | | Permalink

For advisers its hard enough to get the records from clients even when doing the book-keeping monthly. No way will we receive them within 7 days of the month ending. Banks often take two weeks from the month end to send out the bank statements. Not all clients have internet access and so rely on post and phone. This will be unworkable as it stands but would be possible if the assessment period reporting deadline was 7 days plus one month.

Once again the benefit system disadvantages the self employed. Much like the current working tax credit system that only back dates claims by 3 months. Fine if your an employee but not so if your self employed. We still get calls from sole traders on tax credits who are told aggressively by HMRC staff that they must reports their profits by 31 July if they want their payments to continue. But the SA deadline is 31 Jan! We tell clients to give them an estimate. What's that? "Say its the same as the previous year for now. " How are we supposed answer. The client probably hasn't even brought the books in yet. Oh yes they did, they arrived yesterday! Roll on January.

The accountants calender used to consist of peaks and troughs. Seems like all peaks to me; and not in a good way, just more pressure.

johnjenkins's picture

Would they treat

johnjenkins | | Permalink

one man band Ltd Co's the same? If the RO is the Accounants office there might not be a tie up.

Financial Institutions treat OMB ltd co's as self-employed for reference purposes.

Its worse than you think    1 thanks

taxwriter | | Permalink

The 'month end' for UC claimants is unlikely to be the end of a calender month.The monthly reporting periods will start from the date the UC claim starts, so the 'month end' could be any day in the month, and the reporting deadline will fall 7 days after that.

Fortunately one-man companies will not have to report monthly, as I suppose the legislators assume the director receives all his/her income via a wage subject to RTI.

monthly?

david5541 | | Permalink

so the idea is that if you are not on RTI/PAYE,

UC WILL WANT MONTHLY INCOME RETURNS?(LIKE CIS NOW)?

SO INSTEAD OF QTRLY VAT RTNSAND YRLY ACCOUNTS NOW UC WILL WANT MONTHLY RETURNS?

I have several clients who

Jane S-D | | Permalink

I have several clients who are on NT codes - self employed for tax but employed for NI. I have enough problems explaining this to the Revenue now - I have just forseen an endless round of contacting "help" lines to try to explain that one for UC. They'll probably be declared under RTI but for them that's only half the picture.

Much much worse than you think    1 thanks

taxwriter | | Permalink

David5541

UC WILL WANT MONTHLY INCOME RETURNS?(LIKE CIS NOW)?

SO INSTEAD OF QTRLY VAT RTNSAND YRLY ACCOUNTS NOW UC WILL WANT MONTHLY RETURNS?

Actually the returns currently made to HMRC each quarter ( VAT), annually ( SA returns) and monthly (CIS) will continue, but the UC claimant will ALSO have to make SEPARATE monthly returns to the DWP of thier net cash income position for the month (income less outgoings), so not just the monthly turnover.

They cannot be serious (but I suspect they are)    2 thanks

Tax Angel | | Permalink

These provisions just defy belief. Another issue is the intention to include within the legislation 'value extracted from a company' where a 'sole trade' or 'partnership' is run through a company.  Eg dividends and benefits extracted. This is fine in theory but how is it going to be worked into the legislation? I thought that this government had a simplification and cutting red tape agenda, pull the other one.  The crux of the issue seems to be the lack of appropriate consultation and the undue haste with which UC is being introduced.  Why can't the government be brave and  put the brakes on, rather than rushing full pelt towards an artificial deadline?  Scared of the Daily Mail headlines no doubt.

The ignoramuses in government have been busy.    2 thanks

Trevor Scott | | Permalink

 

 I’d bet this idea was imagined by a clever dick university graduate who has never had a real job.

Upon reading this story, I was immediately reminded of the American USE returns....which have inherent problems in the last period of the year. The idea that all self-employed people can accurately calculate their own figures is just a joke.

It is meant to be unworkable    2 thanks

Brads.Kings | | Permalink

Tax Credits was an extreme example of Gordon Brown giving money that UK PLC did not have to people who did not need it (ie savings over £16,000); the level of hand outs has to be seriously reduced and the Govt should be applauded.

Self employed are not subject to NMW so their entitlement to Tax Credits is open to abuse (eg hours worked, hobbies, cash businesses).

When Tax Credits transitions to the means tested UC, people just have to accept that the gravy train has reached its destination.

The Tax Credits system was always a case of shooting fish in a barrel.

ShirleyM's picture

I always thought that the Tax Credits system ...    4 thanks

ShirleyM | | Permalink

... trained people to ask for/expect benefits/assistance.

In my opinion it is much better to adjust a tax code, and let low earners keep more of what they earn, rather than taxing them the same as higher earners and then getting tax credits.

A lot of people do without claiming for anything, if at all possible, and they lose out with the current system. Those that do claim tax credits are being 'trained' to expect financial help. Allowing low earners to keep more of what they earn gives them a little bit of dignity and a feeling of self-sufficiency.

ltd co salary

david5541 | | Permalink

squay wrote:

For advisers its hard enough to get the records from clients even when doing the book-keeping monthly. No way will we receive them within 7 days of the month ending. Banks often take two weeks from the month end to send out the bank statements. Not all clients have internet access and so rely on post and phone. This will be unworkable as it stands but would be possible if the assessment period reporting deadline was 7 days plus one month.

Once again the benefit system disadvantages the self employed. Much like the current working tax credit system that only back dates claims by 3 months. Fine if your an employee but not so if your self employed. We still get calls from sole traders on tax credits who are told aggressively by HMRC staff that they must reports their profits by 31 July if they want their payments to continue. But the SA deadline is 31 Jan! We tell clients to give them an estimate. What's that? "Say its the same as the previous year for now. " How are we supposed answer. The client probably hasn't even brought the books in yet. Oh yes they did, they arrived yesterday! Roll on January.

The accountants calender used to consist of peaks and troughs. Seems like all peaks to me; and not in a good way, just more pressure.

 

the way i deal with this issue is if its a director of an omb ltd tell wtc the salary you expect; then put through that salary in the accounts and on the next p35.

 

incorporate and the whole issue can be worked around better.

abuse of NMW

david5541 | | Permalink

Brads.Kings wrote:

"Tax Credits was an extreme example of Gordon Brown giving money that UK PLC did not have to people who did not need it (ie savings over £16,000); the level of hand outs has to be seriously reduced and the Govt should be applauded.

Self employed are not subject to NMW so their entitlement to Tax Credits is open to abuse (eg hours worked, hobbies, cash businesses).

i regret to inform you too many employers also/already  abuse the NMW regulations as well-e.g through the graduate internships programme-let alone by taking on eu staff or those without proper immigration papers etc.etc.etc. this is the sort of country I think our prime minister likes to call the Big society-lots more companies who can take advantage of anyone-due to their circumstances-who would not clear anyy referencing system!-and they can fire as easily.

Another year, another good idea!    1 thanks

Vaughan Blake | | Permalink

So for the self-employed claimant is there a sort of year end adjustment/reconciliation?  This will be needed to remove the new car from motor expenses, make all the private use adjustments, remove the capital element of the HP payments, insert capital allowances, balancing charges etc, etc. 

What of partnerships where the profits are split in accordance with annual profit levels that can only be calculated retrospectively?

I am also not clear how the new system will cope with non PAYE earnings for the employed, specifically dividends, rental income, plus a bit of bank interest.  Does 'reported separately' also mean monthly?  Logically, (if that's the right word to use here!) the answer has to be yes.

Sorry, I can't see this working, try again.

mr. mischief's picture

Same old same old    1 thanks

mr. mischief | | Permalink

A new Government but the same old tax story.

A new system being rushed through at 100 mph heedless of the consequences.  It will end in tears just like it always does.

Old Greying Accountant's picture

I'm with ShirleyM    2 thanks

Old Greying Acc... | | Permalink

ShirleyM wrote:

... trained people to ask for/expect benefits/assistance.

In my opinion it is much better to adjust a tax code, and let low earners keep more of what they earn, rather than taxing them the same as higher earners and then getting tax credits.

A lot of people do without claiming for anything, if at all possible, and they lose out with the current system. Those that do claim tax credits are being 'trained' to expect financial help. Allowing low earners to keep more of what they earn gives them a little bit of dignity and a feeling of self-sufficiency.

We need a sensible system, the NMW on a standard 40 hour week should equate to the personal allowance, for the employed, if they can't for whatever reason have a 40 hour week then the credit should top them up. If they earn over NMW then no credits, but, NMW needs to be weighted by geographical area!

For the self-employed, or maybe all new businesses, as it always used to be an expectation to take three years to get into profits, have a three year scheme with interest free (or low interest) loans available, which can be written off as benefits as appropriate (new idea so not thought through the bones of it but shouldn't be that hard).

 

UTC's

brianscholar | | Permalink

And what about the cost of doing all this extra work on a monthly basis, low earning clients are really going to kick off about that!

Universal credit - comment I posted on Tax Faculty on 26 June..    1 thanks

M Shapland | | Permalink

This is a typical case of the left hand not knowing what the right hand is doing. The cynic in me is thinking that they are going to make the system as complicated as possible to discourage people to claim the UC and saves themselves pots of cash. This is utter nonsense and in the same lines as the pastry tax, vat on caravan and child benefit claw back.. who is the bright spark in government coming up with this ridiculous policies... I despair of the policy makers in this country. They don't seem to have two grains of common sense between them.. 

I think we need to bang some public servants heads together as they keep comong up time and time again with riddiculous schemes... and our taxes go to pay these "bright Sparks" salaries...GRRRRRRRRRRRRRR

It's just not going to work is it?

The Black Knight | | Permalink

What is there not to understand ? MORONS

 

universal credit and the self-employed    1 thanks

Robin Williamson | | Permalink

This is not the first time the proposed treatment of the self-employed under universal credit has reared its head. The Low Incomes Tax Reform Group campaigned for better treatment for the self-employed throughout the Parliamentary proceedings of the Welfare Reform Bill, briefing Opposition spokespersons in both Houses and generating some lively debates. Certain concessions were (we thought) given by DWP ministers - namely that the minimum income floor would not apply during periods when businesses were experiencing difficulty, and there would be some form of reconciliation at the year-end to iron out distortions caused by the monthly cash reporting basis - but neither of those ministerial assurances has been reflected in the draft regulations. The real tragedy is that working tax credit, which followed the tax accounting rules and therefore allowed for losses, capital allowances etc - has enabled a great many small businesses to get going and survive tough times, and now in their rush to reform the welfare system and get away from tax credits, the DWP are throwing the baby out with the bathwater. Thousands of self-employed people will be a lot worse off under universal credit than under tax credits, and the Government's claim that people will always be better off working than on benefits will ring increasingly hollow as the minimum income floor takes hold.

They will just have to

The Black Knight | | Permalink

get rid of their accountants and fiddle some more to survive or just submit any old figures (in fact that's probably the way to do it)

either that or cease self employment and get a government job ( you get paid more and don't have to work either)

Or simply just don't claim as a number of my clients already do because it's too much hassle.

Would it not be easier to Ban small business altogether? We are after all a virtual communist state anyway!

Tom 7000's picture

simple answer    1 thanks

Tom 7000 | | Permalink

Abolish vat registration limit. Every business pays vat. Now theres a level playing field and your vat no is also your UTR and your NI number and austerity is over. Then for the UC just use the data submitted in box 6 and 7 (and 7 includes all costs)

Why am I not the chancellor.

,

taxhound's picture

What planet are these people on?

taxhound | | Permalink

So the people who can least afford it will have the highest accounting bills....

ShirleyM's picture

lol Tom 7000 ...    2 thanks

ShirleyM | | Permalink

Most of us here think there is already too much admin/red tape for the very small business ... and you want to add more????

Good for my practice, maybe, but not so good for my many small unregistered clients.

Universal credits

M Shapland | | Permalink

So if I get this straight small businesses will have to keep several accounting systems:-

1. one for annual income tax & National Insurance

2.  one for VAT (if they are on a flat rate scheme) they still need to keep records of the invoices issued to customers so debtors can be identified

3. one for UC

 

Several questions come to mind:

1. what about other income (interest from savings, dividends, rental income) the amount received varies depending of when they are paid in a tax year so does this mean that an individual could be entitled one month to UC but not another?

2. what about those seasonal business whose income stream is not constant? again will they qualify some months and not others?

3. if there is a lower income thresdhold to discourage business who has very low profits, what happens when a business claims capital allowances and these wipe out the profits? Or is capital expenditure ignored all together?

4. what about their partner's income does this needs to be reported too?

5 And their family circumstances?

 

Would someone in parliament show some common sense and scrap this as it is obvious to anyone that this scheme is a non starter...

Civil Servants and Committees...

Ian McTernan CTA | | Permalink

This is what happens when the good idea is handed to the mandarins to work on, who are obsessed with RTI at present (ask any member of the actual working staff at the sharp end in HMRC whether they want this, the resounding answer is NO), who seem to think that RTI is some form of good thing and must be imposed on everyone regardless of the consequences.

Asking self employed people to record income and expenses within 7 days shows that the mandarins obviously have no idea what it is like out in the real world, where people have better things to do than endlessly reporting everything so others can process that information and produce endless meaningless statistics without actually doing anything useful.

Completely unworkable.

If we imposed VAT on every business no matter what the size then they could use the figures off the VAT Returns (3 or 4 months delayed is good enough) to help in determining UC payments- but as many businesses have busy periods and slack periods even this isn't going to help much.

How about instead of trying to micro manage every situation into the legislation and guidance they take a common sense approach to payments, awards, fines and penalties and make it easier to claim and manage claims rather than create another monolith to stupidity like tax credits is.

More people actually on the ground reviewing claims, making enquiries and catching bogus claimants is what is required, not another chunk of micro managed legislation that fails to deal with the real world.

and when

The Black Knight | | Permalink

are they going to earn any profit anyway?

This government and the last seem to do the opposite of what is sensible!

Small businesses need de-shackling and access to those that can help it (accountants)

I can only assume that these rules are driven by large business and those that have a vested interest in it.

It really is a disgrace that large supermarket wages bills are subsidised by tax credits.

Still perhaps they may realise that small business does not get paid on time when they have to fund the cash flow shortage.

7 days is not a reasonable time to achieve any sort of accuracy so I doubt any court in the land would not excuse a tax payer for getting in a muddle.

We really should stop objecting and let the ship sink as that is the only way they are going to learn.

Appeal

The Black Knight | | Permalink

The answer is to appeal against everything, by the time it gets to tribunal in 38 + years most of us will be dead and will not have to worry about it.

Tom 7000's picture

My ideas good....

Tom 7000 | | Permalink

5,000,000 more vat registrations for clients whoi cant cope...3 new members of staff please and has anyone got the brochure for the new BMW M6 Convertible?

DMGbus's picture

Can't see this working...

DMGbus | | Permalink

Tom 7000 wrote:

Abolish vat registration limit. Every business pays vat. Now theres a level playing field and your vat no is also your UTR and your NI number and austerity is over. Then for the UC just use the data submitted in box 6 and 7 (and 7 includes all costs)

Why am I not the chancellor.

,

So a partnership of two will have ONE UTR (it's VAT number) instead of three.  Good for simplification but is this practical ... maybe yes if there's added a suffix letter for each partner.

Then a Ltd Co has a UTR (which is it's VAT number) so it's SA return directors have the same UTR?

Or, a rental income (residential property) receiving employed individual - they can't be VAT registered (income wholly VAT exempt).

The above just goes to show what happens when "knee jerk reaction" is applied to implementing the concept of simplification.

Good job Tom 7000 is NOT chancellor!

 

DMGbus's picture

Are the proposals set in stone?    1 thanks

DMGbus | | Permalink

If the impractical proposals are not "set in stone" then is anyone making represetations on behalf of small businesses to Government about all this extra red tape?

As the present Government (*) has claimed that it has an agenda to REDUCE red tape...

(*) Just maybe the left wingers within the civil service (remember that Communism abhors self-employment and enterprise) are in control (out of control of parliament) here?  Perhaps the Government should admit that , it, being democratically elected, must ignore it's voters wishes and instead obey the wishes of civil servants who appear to wish to destroy enterprise and discourage self-employment.

Or, just maybe the fresh-from-Uni mob within Civil Service who came up with this nonesense think that everyone (like them youngsters fresh from Uni) are permanently on their mobile phones / devices with business accounts always maintained on their mobile phones / devices and so can "easily" send monthly data to the Universal Tax Credits Office.

Out of touch with reality.   A repeat of iXBRL.    A repeat of RTI.  

Finally, where's the impact assessment on all of this nonesense? - the likely impact cost to small business - like iXBRL untrue figures published? (or just quietly overlooked?).

 

Horrified

fruitful | | Permalink

 

I am horrifed to read of a minimum income floor - my husband has long term serious health problems but is self employed as it is the best way of managing his work and condition and his earnings can vary wildly - he does not get any benefits or even a disability credit under the current tax credit as he doesn't receiver a qualifying benefit. So we are already 'punished' for his effort and determination as many of you have mentioned it is alraedy harder to claim tax credits as a self employed person, especailly as we cannot afford representation. I am studying accounting so I can help us better.. eventually, hence reading this board.

In his case going to work despite suffering spells of considerable illness throughout the day is not applauded and supported but used as a way of stopping him receiving any other support. He would struggle to be employed without a hugely understanding employer (and where are they!)

As a further point, self employed people already have to use a different system of accounting if you need to claim housing benefit. Councils will not accept the figures from the tax return but exclude amounts invested in the business, anything that amounts to expansion/ growth of the business and many other HMRC 'allowables'. Sounds like the above system wants to make similar exclusions. I kind of understand the rule on excluding some investment - ie £20k on macinery or pay one's rent, (and benefitting from capital extraction as Co directors can manage to) but of course sometimes investment is necessary to keep the business going, and of course in the early years growth is essential if the business is ever to become viable - you never know we might even end up employing people.

We would incorporate but cash flow is the issue for us. We would require a big cash injection to cover the slow winter period or times when affected by illness. Simply not possible for us.

So horrified I am, but surprised?... sadly not.

 

Adjust tax code

RKemsley | | Permalink

I agree that simply amending the tax code to low earners is a possible and workable idea as it remains within a framework that people can understand and operate. It also ensures that the tax code operates per person and is therefore discreet and much more dignified than having to call the tax office every three months with figures that they should already know. I feel is also ensures that people without children can benefit from the tax codes which they cannot get under the working childcare tax credit system.  Bring on the £10K tax code!

I am an advocate for scrapping the child benefit completely and I get it. This way the funds can be redirected into childcare/education etc which would enable childminders and nurseries to claim funding from the government rather than the goverment paying parents to then pay it back to the childcare provider, be that child benefit, tax credits or salary sacrifice schemes. Less red tape means less adminstrative errors!  Yes please.

Crazy is the idea that we should all be employed, There has to be business owners to create jobs be that as sole traders, SME's or large corporation. But all the time I have been self-employed there is no incentive but your own desire to be your own boss. We need enterprise, cashflow and investment to get out of recession and self-employed people are the backbone to it all.

 

 

Nick Graves's picture

FOUR, actually

Nick Graves | | Permalink

M Shapland wrote:

So if I get this straight small businesses will have to keep several accounting systems:-

1. one for annual income tax & National Insurance

2.  one for VAT (if they are on a flat rate scheme) they still need to keep records of the invoices issued to customers so debtors can be identified

3. one for UC

 

Several questions come to mind:

1. what about other income (interest from savings, dividends, rental income) the amount received varies depending of when they are paid in a tax year so does this mean that an individual could be entitled one month to UC but not another?

2. what about those seasonal business whose income stream is not constant? again will they qualify some months and not others?

3. if there is a lower income thresdhold to discourage business who has very low profits, what happens when a business claims capital allowances and these wipe out the profits? Or is capital expenditure ignored all together?

4. what about their partner's income does this needs to be reported too?

5 And their family circumstances?

 

Would someone in parliament show some common sense and scrap this as it is obvious to anyone that this scheme is a non starter...

Two for annual income tax; typically at this level, they'd have to decide whether to do cash or GAAP accounting & pick the best option.

Not content with destroying the financial system via hyperinflationary Keynesian debt-creation, they're almost guaranteeing there can be no recovery after the mega-collapse by enslaving the job-creators.

Evil or stupid; it's anyone's guess.

The cost-saving of eliminating all benefits simply paying EVERYONE registered their personal allowance and claiming it back above that threshold via flat-rate taxes (IT & VAT only; everything that is "income" would be taxed on the same level basis) would be the only effective system. But it would cost too many millions of zombie jobs and empty too many offices to be politically acceptable. Plus it would mean closing a lot of the loopholes the banksters, et al, rely upon in order to tax-avoid.

 

 

 

 

 

 

Worse than that!

Vanessa | | Permalink

.

Should we be advising our self employed clients to go limited? What happens when they take a dividend? 

Self-employed - section Permitted expenses 54. The client does not appear to be allowed to use the existing system but forced to use the new cash accounting system. Have I read this correctly?  Expenses not allowed "cars". Not allowed “interest paid on loans”.

Section 55. Goes on to describe the flat rate deductions for mileage and use of home. Is 45p per mile going to be acceptable to the taxi driver or driving instructor.

 

UC

twickers | | Permalink

Shirley is navigating in the right direction I would suggest.
1-employed covered by Paye sys.
2-self employed- profit is the name of the game so/take a 1/3 of sa prior
year as taxable income/ those below this make detail claim/ those above
claw back following year.
3-un-employed/disable/ annual statement of assets/other income/ with interim statement required material change (-+) 10%
Or move to channel islands who I understand are about to declare UDI from UK due to too much requlation ?

johnjenkins's picture

I have just

johnjenkins | | Permalink

had an interesting conversation (someone in the know) with a new clint who states that this could never work. According to sources DWP don't have the manpower to control or police, which seems wierd as the system has already started.

Why doesn't the government

dropoutguy | | Permalink

Why doesn't the government tell the truth and say it wants to abolish tax credits ( or their equivalent ) for most people. It might gain more respect that way.

As it is, this hotpotch will fool nobody ( except perhaps the officials at the DWP, many of whom don't really understand how self employed people operate anyway )

 

Nick Graves's picture

dropoutguy    1 thanks

Nick Graves | | Permalink

They are too scared to be seen to "take away" and not get re-elected. Same reason why my suggestion would never gain traction.

Gordy the Moron has trapped us into an inevitable dependency culture that will be very hard to break. There is a school of thought that totalitarians want to trap everyone in a debt/dependency culture, so only their friends in big businesses may continue without small-enterprise competition. 

The likely financial collapse may be our only chance of escape.

 

 

We are all in it together

The Black Knight | | Permalink

Nick Graves wrote:

They are too scared to be seen to "take away" and not get re-elected. Same reason why my suggestion would never gain traction.

Gordy the Moron has trapped us into an inevitable dependency culture that will be very hard to break. There is a school of thought that totalitarians want to trap everyone in a debt/dependency culture, so only their friends in big businesses may continue without small-enterprise competition. 

The likely financial collapse may be our only chance of escape.

Think you are right there.

Just look at the likely result and who is to benefit.

What else is an interest only mortgage for?

Every part of this plan achieves debt / dependency.

 

Steve-EBL's picture

New order

Steve-EBL | | Permalink

Abolish cash, and tax income into statutory current accounts, which we all have to have by law.  Job done, scrap all other taxes.

The banks would love that!

The Black Knight | | Permalink

Any one want to swap some chickens for a BMW ?

 

Nick Graves's picture

The BIG scandal has yet to come.

Nick Graves | | Permalink

The Black Knight wrote:

Nick Graves wrote:

They are too scared to be seen to "take away" and not get re-elected. Same reason why my suggestion would never gain traction.

Gordy the Moron has trapped us into an inevitable dependency culture that will be very hard to break. There is a school of thought that totalitarians want to trap everyone in a debt/dependency culture, so only their friends in big businesses may continue without small-enterprise competition. 

The likely financial collapse may be our only chance of escape.

Think you are right there.

Just look at the likely result and who is to benefit.

What else is an interest only mortgage for?

Every part of this plan achieves debt / dependency.

 

I think the interest-only mortgage is to see if you understand the inflation-effect, as much as debt-entrapment. Then you may join the Banksters' Club!

The biggest scandal is in student loans, especially in the US; people getting highly indebted wasting their lives getting a totally useless degree (or dropping out) in a non-subject which has no effect on their future earnings potential & sets them back three years in work experience. And the rub? They are enslaved forever! At least if your mortgage goes pants, you can declare bankruptcy & walk away. If your business goes, likewise.

Some naive student signs up to this mess for life. That's onerous.

 

 

 

Old Greying Accountant's picture

A kindred spirit    1 thanks

Old Greying Acc... | | Permalink

Steve-EBL wrote:

Abolish cash, and tax income into statutory current accounts, which we all have to have by law.  Job done, scrap all other taxes.

I've been saying this for years, if all bank transactions to third parties had tax deducted in the same way as bank interest, there could be no evasion, all teh big businesses would pay there share, and the rate would be very low, I would reckon less than 1%. Trouble is we would nave another x million on the dole as we wouldn't need so many accountants or tax inspectors!

So, with vested interests as a major factor the chances of this are nil, especially as with mechanisation, computerisation and outsourcing, the number of people actually required to do anything useful would be minimal!!

johnjenkins's picture

Come on OGA.

johnjenkins | | Permalink

No evasion?????????? The barter system would grow so much it would mushroom into a different currency perhaps called the dollecu.

Steve-EBL's picture

There would still be money,

Steve-EBL | | Permalink

There would still be money, just not coin and note.  All businesses would be outlawed from bartering, so if we all wanted to spend our money as we generally presently do, buying the outputs of businesses, bartering would not mushroom.

Whilst we are fixing the world, i would also replace all benefits with a universal £7.5k annual allowance paid to every citizen whos father and grandfather was born in the UK, this becomes payable from 18, tapering to full £7.5k by age of 25.  All other benefits including pension, child allowance, housing would stop.

All systems are flawed

Wiganer Elaine | | Permalink

Unfortunately, there is no such thing as a "perfect world"; someone, somewhere will always disagree with prevailing practise, no matter what that practise is.

As we live in a (reasonably perhaps?) democratic society and presumably agree with the principle of democracy we generally abide by the wishes of the majority, or at least that's the theory.

If you believe in the principle of democracy you have to accept that you will not always get the systems you would want or maybe believe to be "better". If you can't persuade others to go your way just grit your teeth and carry on complaining or campaigning until times change and the majority share your view.

Time now to get back to the real world!!

johnjenkins's picture

Methinks    1 thanks

johnjenkins | | Permalink

you live on a different planet, Steve, no dis intended. How could you possibly outlaw a painter painting a house for a mechanic that maintains his car etc. etc. etc?

Whilst we are on the subject of fixing the world - we need to stop all those in power thinking the rest of us are mugs.

Old Greying Accountant's picture

I don't think so ....

Old Greying Acc... | | Permalink

johnjenkins wrote:

No evasion?????????? The barter system would grow so much it would mushroom into a different currency perhaps called the dollecu.

Why the hassle, for such a small percentage, I certainly wouldn't worry if someone paid me £1000 and I only got £990 in my account, knowing I never had to worry about finding the money for my payments on account, or my VAT, or PAYE etc. No worry about tax investigations and eqnquiires, no compliance visits etc etc.

We would all be far better off, those who wouldn't would be the multi-nationals and super rich!

As for barter, there is a very small minority of people who have the wherewithal to barter these days, so what do you do? Offer to paint the Ford garage so you get get the parts to fix your truck, and your mechanic goes and fixes the B&Q lorry to get you the paint for his house!!

?

The Black Knight | | Permalink

Old Greying Accountant wrote:

johnjenkins wrote:

No evasion?????????? The barter system would grow so much it would mushroom into a different currency perhaps called the dollecu.

Why the hassle, for such a small percentage, I certainly wouldn't worry if someone paid me £1000 and I only got £990 in my account, knowing I never had to worry about finding the money for my payments on account, or my VAT, or PAYE etc. No worry about tax investigations and eqnquiires, no compliance visits etc etc.

We would all be far better off, those who wouldn't would be the multi-nationals and super rich!

Would we all work for the government or tescos?

Pol pot had abetter idea! LOL

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