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Tax Simplification

Is it a pipe dream ?

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Baroness Neville-Rolfe says the tax system is "creaking under the weight of its own complexity".

https://economia.icaew.com/news/july-2019/ex-treasury-minister-calls-for...

How about starting by making self assessment simple enough for the techy guys to work out the tax correctly ?  No stupid islands of high marginal rates.  No clawback of Child Benefit over a £10000 band.  No clawback of personal allowances.  If you want a 60% band in the middle of your 40% band, just say that and take it on the chin when folk laugh at you.  Don't let people pick and choose how they allocate their personal allowance.  Just a few ideas - all they need to do is go through the 1001 exclusions (or errors, as I prefer to call them) for more material.

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By ireallyshouldknowthisbut
24th Jul 2019 17:18

We have seen a bewildering number of complexities put into the system in the past 5-6 years.

Most of them stem from the "bear traps" around £100k and £50k CHB, and the flat rate nil allowances for interest and dividends which are at best misguided.

Cash accounting is another "not simple simplification" as you have to do the accounts under both headings and consider which might be better for the client based on projection for 19/20.

I would make the top rate 50% over £100k as its simple, and cancel the PA claw back, and cancel the dividend and savings allowances, and the £1000 property and income tax allowance which at a stroke would remove a lot of complexity. HMRC can go back to unofficially ignoring tax due under about £200, ie unofficial allowances for small earners, and tax people who declare it in full where there is no argument for extra costs of collection.

Never happen of course, so more work for us lot. Which isnt all bad!

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By Wanderer
24th Jul 2019 17:34

Also cancel the requirement for silly returns when no tax is due, e.g. ATED when RDR applies, non-res CGT when no tax due.

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By bernard michael
25th Jul 2019 09:47

Do I hear turkeys voting for Christmas ??

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By Duggimon
25th Jul 2019 10:22

I read on here, and checked it out, the HMRC official guide for manual calculation of your tax liability is incorrect if you're a Scottish taxpayer with income within certain bands and gift aid or pension payments extending the BRB.

The step by step guide, which is ludicrously complicated, actually tells you to use the incorrect figures, reducing the basic rate band in the middle of the calculation, for no reason.

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