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Thumping majority: A tax vision

11th May 2017
Tax Writer Taxwriter Ltd
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What if the ruling party achieved such a huge majority in Parliament that it could do whatever it wished with the tax system. What could it do?

Possibilities

This article was inspired by one of Giles Mooney’s excellent lectures on Finance Act 2017, in which he wandered slightly off-topic to talk about how a future government could radically change the tax system, if it had the power to do so. Mooney suggested that a majority of 150 or more seats in the House of Commons would create this situation.

The last time one party had such an opportunity was in 1997 when Labour won 419 seats, and had a majority of 179. In Gordon Brown’s first Budget he abolished refundable dividend tax credits, cutting the income of pension funds at a stroke. Many other radical changes were to follow.     

I’m not endorsing these ideas below as good or bad, I am merely highlighting where changes could be made, if the political will and power were there.

National insurance

We know that Philip Hammond wanted to move towards equalising the NIC rates for employed and self-employed individuals, as that is exactly what he proposed in his March Budget. The modest increase in class 4 NIC to 11% could be reintroduced with a target of 12%.

A strong government could grasp the nettle of income tax and NIC and merge those two taxes. Some would celebrate this simplification, but would pensioners be happy at paying 32% tax on their pensions, and shareholders meekly pay 19.5% to 50% on their dividends?

Income tax

The two new £1,000 allowances for sundry income and property income were taken out of the Finance Bill 2017 before it was passed, but they will almost certainly be reinstated and be backdated to 6 April 2017. This is because those allowances are designed to help HMRC, not the taxpayer. They remove from the list of “tax evaders” those people who generate small amounts of income from their hobby, or occasionally letting out their driveway.

As £1,000 seems such a nice round number, perhaps the Chancellor will also reduce the dividend allowance to £1,000. In the March Budget it was announced that the dividend allowance would be reduced from £5,000 to £2,000 from 6 April 2018. This provision was not included in FA 2017, but it will almost certainly be reintroduced, perhaps with a target of £1,000.  

Just five years ago (2012/13) we had a top rate of income tax of 50%, could that return? If NIC and income tax are merged, a 50% top rate would seem to be a natural limit.

Pensions

consultation paper released alongside the 2016 Autumn Statement said tax relief on pension contributions cost £48bn in 2014/15, and two thirds of that tax relief was enjoyed by higher and additional rate taxpayers. In comparison £13bn of income tax is paid each year on pensions income. The tax relief on funds paid into a pension scheme is clearly not being recouped by tax on benefits paid out.

Rumours that higher rate tax relief could be removed from pension contributions have been circulating for years, and would be high on any Chancellor’s list.

The burden of pensions auto enrolment for employers is considerable, not only in terms of the administration, but also the contributions the employer must make. Universal access to a workplace pension was a policy created by the coalition government in 2010-2015, perhaps this policy would be unwound for certain employees or employers.

Corporation tax

I believe that one set of MTD rules won’t work for all sizes of company, so it seems logical that a distinction will be made between the reporting requirements for very large companies and those for smaller companies. HMRC has already announced that such a distinction will be applied for partnerships with turnover of £10m or more, who will not be required to join MTD until 2020. Just three years ago we had two different rates of corporation tax for large (21%) and small companies (20%), and all the glorious associated company rules to prevent groups of companies from exploiting the lower rate paid by smaller companies. If small companies were required to pay a higher rate of corporation tax, of say 26%, and larger companies paid an internationally competitive rate of say 15%, there would be no need for those associated companies rules.

Such dual rates of CT would also make sense for the government, as the smaller companies can’t easily move to another country to take advantage of a lower tax rate, but larger companies can.   

IR35

It is expensive to employ people; on top of their basic wage the individual must be paid holiday pay, sick pay and benefits such as pensions. Employment law can also make it difficult to sack employees at will, or use their labour for variable periods – although zero-hours contracts solve some of those issues.

The market created a solution about 20 years ago – the personal service company (PSC), which has been used by contractors ever since. The introduction of IR35 from April 2000 was an attempt to reduce the tax advantages of using a PSC, but it has clearly failed.

The new tax rules for off-payroll working in the public sector are another attempt to crack this nut, but all they achieve is a confusing mess of employment taxes applied to company receipts. How the PSC is supposed to account for the income tax and NIC deducted from its invoices is still anyone’s guess.     

What would happen if employers were allowed to differentiate between long-term workers for rights and benefit purposes? One class of workers would have employment rights including; redundancy pay, pensions and holiday pay. The other class of workers (let’s call them “contractors”), would have no employment rights, but would be taxed in the same fashion as the workers. The IR35 rules could be eliminated at a stroke, and no tax would be lost.

Welcome to the Brave New World.

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By johnjenkins
11th May 2017 15:42

Rebecca, you are forgetting, you don't need a thumping majority to change the tax system. Just someone with the destructive abilities of Gordon Brown or the visionary fantasies of John Major.
Governments will never do anything too human because then it means they can be compared on a like to like basis. That's why you'll never get the easiest of all taxes - flat rate, no NIC (I include employers NIC as well).
Give everyone a decent PA and have a flat rate tax for the rest. Oh yes it's about time employment status was taken out of HMRC's hands for good. It's a commercial decision.
While we are at it (sorry I've had man flue all week) TM won't get a thumping majority, she will be lucky to get 20 clear seats. I don't think she is up for a fight of this magnitude. Don't get me wrong I think the "girlie, boy jobs" are normal (sexist - get a life) however "normality" will not win this election.
Look at the people who are winning, Trump (certainly not normal) Macron (again it can't be normal for a party only one year old to win). Which leads me to JC (anything but normal). Whatever happens, these next few weeks are going to keep us on our toes. Then it's back to MTD in all its glory.
As I'm on a roll I will predict that Mr Farron will hold the balance of power. If he does which way will he go? If he goes with Labour, then brexit will drag on and still we will have upwards of 300,000 per year draining our inept infrastructure. They can't even fix the potholes down our road. I've even thought of getting a quote from our Romanian friends and asking all our residents for a contribution. Trouble is they wouldn't be allowed to do it.

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Hallerud at Easter
By DJKL
11th May 2017 18:24

Liberals will not go with Conservatives again, the good of the country argument re justification did not sell that well with the electorate last time and given Europe I think trying it again is political suicide; remember it all comes back to haunt later.

Same applies with Conservatives and tax policies, they may get the power but it is dangerous to use, 2022 looms closer and if they really hit their own voters they could be in big trouble, especially if Labour implodes, a softer left party forms and that is the opposition in 2022. (something Conservatives cannot control) This election is for the Conservatives like shooting fish in a barrel, they cannot miss this Labour party, 2022 could be very different.

As for radical tax, integration of tax/NI is possible if pensioners get given compensated higher personal allowance , applied to dividends would need balanced with lower CT rates re smaller companies- how this would work with quoted companies/similar would need studied.

I quite like the idea of a distinct legal entity for smaller business entities, with its own tax code so that changes in general IT rates do not apply and targeted rates can be set just for this sector- hybrid partnership/Limited taxed at an entity level with no further tax whether reserves withdrawn or left in beast. How it would be executed would need some thought, but distinct Acts re its conduct etc (Its own short CA) and its own tax code distinct from the other Acts would appeal re simplicity.

I would like to see PPR falling into tax when downsizing (Sweden taxes gains but has a reinvestment relief) , I would also consider all pregnant gains falling into tax on second death of a couple (no rebasing on first) and IHT scrapped as a result.

Some way of marrying CGT rates and IT rates into a cohesive whole would certainly reduce extant legislation but I can see real difficulties re killing the goose and how much it would honk if attempted.

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Replying to DJKL:
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By mkowl
12th May 2017 10:17

Very much in favour of the capital gains ideas set out above. You could still use a type of rollover relief/ holdover reliefs for trading assets held at death and continued to be used for trading purposes thereafter.

There has to be a re-alignment of CG and IT rates, for investment activities. The reduction to 20% was a surprise to most of us and it is difficult to counter any argument that the already wealthy have benefitted hugely from this. Whilst I don't support many of the arguments of the Labour manifesto, the bi line of "for the many not the few" is quite apt. By the Tories appearing to look after their wealthy friends the risk is that the electorate find support in the re-distribution policies of Corbyn

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By [email protected]
12th May 2017 10:26

Distinct legal entity for smaller businesses? The Freelancer Limited Company idea has merits here. A PSC that does what it says for one person who is the single shareholder, if operating through it and follow rules then are outside of IR35.

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By alan.rolfe
12th May 2017 10:10

Interesting figures on pensions. They just don't seem logical if you think about it, as how can there be 3 times the tax relief given on contributions than are taxed? Logic suggests 75% of all contributions will be taxed, albeit at potentially lower rates and at a different time, but surely this cannot give such a wide disparity.

There is also one key bit missing from the equation, namely that the state is not having to pay means tested benefits if the employee/er has funded their pension.

The document was for 2104/15 and was seeking to justify reducing the annual allowance, so perhaps some bias to the figures crept in!

It seems the politicians will do what they want and will find the data to support their methods. No wonder politicians are held in lower regard and why non-politicians are being voted in as an alternative.

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By Bert Clayton
12th May 2017 10:23

Yes, it makes sense to harmonise NI rates but attacking dividend income could do real harm to the wealth creating activity generated by smaller business owners. If anything the dividend allowance should be increased to avoid killing off the golden goose. That would be the brave decision you can make with a large majority.

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By matchmade
12th May 2017 10:47

Most of the discussion so far has been about increasing the tax take via simplification, which is fine for policy-makers and policy-influencers to speculate about, but will be hard to sell to the public, which is in part the job of our poor politicians.

Extending NICs to pensioners would need to be sold with some spending carrots attached, not just an increased nil-rate personal allowance. The clue to how it might best be sold is in the name: insurance. Having potentially to pay huge amounts for social and nursing care remains a great fear amongst the older population, and the cost of private insurance to protect against this is prohibitively expensive because so few people buy it.

The way to sell Pensioner NICs is to offer in exchange a new national programme of improvements to state health and care services. Greatly-expanded social and nursing care - whether at home, or in a state or private setting - would be based on need, free at the point of use, and fully integrated into the NHS as a natural extension of its current community, GP and hospital-based services. Of course there would be some restrictions on cost - social care could be up to a certain budget, for example, but people would be free to go private and pay the extra themselves, as happens at the moment when councils pay for social care.

It would also help if the Government made far greater efforts to show to citizens the degree to which NICs genuinely pay for specific public services. NICs were originally meant to pay for the state pension, unemployment benefit, widow's benefit and so on - they were a national insurance scheme intended to replace the huge range of private or trades union-based insurance schemes that were pepper-potted round the country, were expensive to administer and missed a lot of people. If the Government could show the extent to which NICs are a genuine insurance policy, not just lumped together in some huge amorphous pot of tax money, I think this would be a useful way to explain better to people the nature of their welfare state contract with the Government, how their money is being spent, and make the pill easier to swallow.

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By johnjenkins
12th May 2017 11:03

I think most people feel that the only way to get our infrastructure back 0n-line is to increase taxation (or NIC) at some point. Money doesn't grow on trees and if you tax the rich unduly they will find a way of getting it back. Why do so many people try and keep out of VAT and the 40% tax bracket? So it goes on. Even if the Tories do get a larger majority they will have to be very careful over the next 5 years.
The bottom line is that our tax system is not fit for purpose and certainly won't last the next 5 years. So Phil take a leaf out of your namesakes book and take early retirement so that we can have a chancellor that will do what the PEOPLE want, not politicians and civil servants tinkering.

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By billcole
12th May 2017 10:48

I guess it's more what they Would do, not what they Could do - because there is a difference - they generally want to be re-elected I suppose - so don't worry!

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By johnjenkins
12th May 2017 11:05

It's not what they could or would do, it's what they SHOULD do that matters.

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By dmmarler
12th May 2017 11:09

We must look at the larger picture. Combining tax and NIC is the most straightforward way to simplify the system. It would save taxes management costs as well for both government and taxpayers (including employers). Employers' NICs are simply a tax on employing people; although they represent a steady monthly income for the government, the cost of managing NICs (staff, IT, estates, civil service pensions) could be eliminated. The staff could be redeployed within the civil service, I am sure, so the overall net effect on the government would be negligible and businesses would save costs. If government wants to appease pensioners for the percentage increase this could be adjusted through the Personal Allowance - however, NI was not a hypothecated tax so why pensioners had the exemption in the first place is not clear (other than political expediency).

The problem of IR35 goes away completely as there would be no tax incentive once tax and NI become one and there is no employers' NI. Employment status would be for the individual parties to negotiate (hopefully) at arm's length.

The odd £1,000 allowances for sundry/property income, and the £5,000 dividend allowance are all unnecessary complications. If the Personal Allowance was geared to a multiple of the National Minimum Wage rather than another arbitrary number, and all these sundry allowances abolished, it would be a more level playing field. If HMRC were given discretion not to prosecute individuals for items which were not returned of up to (say) £500 tax in any one year, with the guidance this should only happen once in (say) five years, this would reduce the problem without all the low earners complaining that the "rich" who have certain types of income are getting away without paying their fair share.

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By johnjenkins
12th May 2017 11:19

I like your style. However anything that makes the tax system simple is referred to the office of tax simplification where it gets shelved or disregarded. They told the Government to get rid of IR35, yet they still tinker with it. Will these loons ever learn.
There is one thing everyone seems to have forgotten. A happy worker is a productive worker. Keep the workforce happy and the coffers will grow.

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By listerramjet
15th May 2017 12:20

probably not - NICs is both employees (which could be combined) and employers remember!

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By listerramjet
12th May 2017 11:38

radical change or incremental tinkering? Gordon Brown was good at the latter methinks. A radical change in my books is a mammoth simplification and rationalisation. We have too many taxes and too many complications within each tax, and tax policy is built on the stupidly simplistic assumption that they don't interact and they aren't dynamic.
What we need is a reduction - one tax on income and one on spending, and one local income tax. And a simplification of both of those to reduce the amount of special pleading - so no exemptions. Income tax starts at or around the living wage (one personal allowance), and one rate
I would also suggest that we need to reconsider how we fund stuff like health, education, welfare and pensions. What we have now was designed in a time that no longer exists, and politicians have shied away from the difficult truths for too long.

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Hallerud at Easter
By DJKL
12th May 2017 12:26

I am more for one simple system for smaller entities and a distinct system or systems for larger entities. Obviously the transition rules between the stages for the business entities that outgrow the Small/Medium/Large sizing (to be determined but tying in with CA) may be tricky, but by time an issue to them business hopefully ought to be able to pay for the necessary advice.

All the tax legislation for smaller entities held in one document (Act) and kept short.

Targeted tax then becomes possible, government uses different taxes for each sector, so we have Small Business Tax Rate, Medium Business Tax Rate, Large Business Tax Rate and Individual Tax Rates.

The idea that individuals are somehow able to understand their tax obligations within the existing system/ legislation is a joke.

We have Labour (not) announcing a back pedal re Conservative CT reductions, little press recognition that there was a Small company rate and a Main rate from the commentators. Labour's announcement is part to pay for things and part to punish nasty international companies, whilst the small print when released may differentiate, the ability to have distinct taxes, with distinct reliefs and distinct rates to me makes sense.

I hold the same view re interest rates, there is a real economic need to be able to control interest rates targeted at sectors, I may want to choke consumer demand but still want business borrowing- running a two track lending system rather than a crude one base rate system makes sense.

If we are to fully control our own economy, as promised by Leave, then there appears to be three main ways government can do this; tax, interest rates and sudsidy, and a fourth lesser way, crowding out the private sector.

Yet the tools given are crude, far more flexible and targeted tools are to me the way to go so far more targeted tax into sectors of the economy is essential.(I accept my knowledge of economics is now likely 35 years out of date, last studied 1982)

The other reason for say splitting multinational tax into a different regime is despite leaving the EU we will need to continue working with them (and ROW) re profit recognition amount/location questions, so this area of taxation will be partly outwith UK control-fudge/compromise ongoing will be needed, so splitting that tax from our more domestic taxes will be no bad thing.

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By QuentinPain
12th May 2017 12:56

If a government truly wanted to simplify the tax system, here's what they should do:

1. There would only be 1 tax, and it would be based solely on invoices and charged to the businesses and companies issuing the invoices.

The tax would therefore be based on the only thing that tax should be based on - production (so that's VAT, NIC and PAYE gone completely).

It might be called Production Tax.

2. As we know the GDP of the country as well as the cost of running it, the rate of Production Tax would be based purely on that - and adjusted according to the introduction or removal of services (from now on all party manifestos would be properly accounted for).

Now that's what I call radical. Everything else is just fiddling about with, what is currently, the world's largest and certainly most complicated, set of tax rules.

The UK's finance acts taken in total is larger than the last published edition of the Encyclopedia Britannica, no one person can know it all, plus it changes with each judicial case/review.

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By johnjenkins
12th May 2017 13:33

You said it Quentin, "If a Government TRULY wanted to simplify the tax system" they could. Let's not call it tax because it is a contribution to the running of this country. So in your scenario it would be called PC.
Any Government could simplify the tax system in the grand design of things "at a stroke".

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Tornado
By Tornado
12th May 2017 13:38

No Government is deliberately going to simplify anything, the Civil Service would be decimated -

Hacker: How many people do we have in this department?

Sir Humphrey: Ummm... well, we're very small...

Hacker: Two, maybe three thousand?

Sir Humphrey: About twenty-three thousand to be precise.

Hacker: TWENTY-THREE THOUSAND! In the department of administrative affairs, twenty-three thousand administrators just to administer the other administrators! We need to do a time-and-motion study, see who we can get rid of.

Sir Humphrey: Ah, well, we did one of those last year.

Hacker: And what were the results?

Sir Humphrey: It turned out that we needed another five hundred people.

From Wikiquotes.

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By QuentinPain
12th May 2017 17:03

LOL Yes, Parkinson's Law.

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Hallerud at Easter
By DJKL
12th May 2017 14:17

How does that deal with differential profit margins re goods and services supplied?

A wholesaler may have high volume but low margin, a tax on turnover whilst in some ways simple would be :

a. a somewhat blunt tool, at say 4% it could easily take 40% of the profits of a wholesaler but only 8% of the profits of a sole trader accountant with limited costs.

b. once you start with different rates re categories (son of flat rate vat) you bring in the complexity re deciding appropriate rate.

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By the_fishmonger
12th May 2017 17:49

DJKL wrote:

How does that deal with differential profit margins re goods and services supplied?

A wholesaler may have high volume but low margin, a tax on turnover whilst in some ways simple would be :

a. a somewhat blunt tool, at say 4% it could easily take 40% of the profits of a wholesaler but only 8% of the profits of a sole trader accountant with limited costs.

b. once you start with different rates re categories (son of flat rate vat) you bring in the complexity re deciding appropriate rate.

HMRC must have sufficient data that could be mined, from SA/CT and iXBRL accounts, to ascertain reasonably accurate percentages of tax take from those figures for most businesses by now.

They would run an algorithm on all sub £2m turnover businesses to set the initial rates and have some form of independent appeal if they were considered outrageously wrong.

There will always be winners and losers in any change to taxation. Even HMRC couldn't cock[***] it all up with just the turnover figure to monitor, could they?

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Hallerud at Easter
By DJKL
12th May 2017 19:33

You would certainly need to adjust, I act for a few retail partnerships where the owners work in the business so staff costs are very low, yet obviously other retailers operate with virtually all paid staff and lower profits relative to turnover. Unless some allowance/adjustment is made re structure, number of partners involved etc, using an industry specific sales tax would bring extreme variation vis a vis previously reported profits and tax payable due to very different ways of operating the business.

A closer to home example is accountancy practices, I these days have no staff, no office, limited costs re software etc, my profit as a percentage of turnover runs at something like 80-90%, that is currently what I pay tax on. Yet some on here will have 5 staff and the business makes profits of say 30-40-50% of turnover, so one cannot apply a blanket tax on accountants of X% of turnover (well it would be great for me if you could)

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By the_fishmonger
12th May 2017 16:09

A sales tax, similar to your suggestion was put to HM Gov by OST. They ruled it out. In a nushell...

I wrote to OST suggesting a sales tax replaced IT/VAT/CT for any micro-business (say, up to £2m t/o) structure excluding rental businesses with rates set along the lines of FRS sector by sector. Also allowing for a local sales tax, at say 1%, to replace local non-domestic rates so that all businesses contribute and two identical businesses pay the same (assuming same t/o) regardless of good/bad landlord rents.

You could even report and pay monthly through one entry and DD to each authority. Since it would need to be a cash accounting scheme for most, there'd be no acceptable argument from taxpayers that they haven't got the money to pay!

As a bonus, you remove all IR35 and status guff and, by ensuring the %ages are set right, there's equivalent tax take across all set ups.

Added bonus #2 - those businesses wouldn't need to be under MTD

So, WHY NOT?

Well that would require far fewer civil servants and that would, as alluded to above, never do!

It never occurs to Sir Humph that the staff could all be trained to strengthen compliance, ensuring no one gets away with it!

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By listerramjet
12th May 2017 17:29

Have you considered this fully? The ripple effect through the supply chain would be interesting. If you are fifth in line, and assuming businesses add it to their cost base for onward transmission, then your effective tax rate is a large multiple! One way to discourage business I suppose!

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By the_fishmonger
12th May 2017 17:45

listerramjet wrote:

Have you considered this fully? The ripple effect through the supply chain would be interesting. If you are fifth in line, and assuming businesses add it to their cost base for onward transmission, then your effective tax rate is a large multiple! One way to discourage business I suppose!

A production/sales tax would not be VAT style, it would add nothing to the sales price as it is a straight percentage of turnover that the trader pays over.

Capex would attract a deduction equal to the percentage used for turnover. Group(s of) companies would remain outside the scope of the new tax regime so that opportunities for circumventing are restricted.

To be fair it is scandalous how many start-ups fail in the first 2-3 years without paying any tax but the owners somehow manage to live pretty lavish lifestyles. This would stop that sort of thing too.

A fair bit of thought has been done, in my case. Many learned acquaintances have picked the holes and they have been looked into. Always happy to try and plug some more!

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By listerramjet
15th May 2017 12:22

Fantastic - particularly for all those businesses on a tight margin that would then go bust!

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By the_fishmonger
15th May 2017 14:34

Dare I suggest it is the margin charged that is incorrect and the market ought to adjust to a more truthful figure for what the goods/service being sold are worth.

If a business were operating on a margin so tight, they probably aren't paying tax now. Is that really a sustainable business where it barely covers overheads (plus maybe some small amount of owners drawings/salary). What is the point of working so hard to return nothing of significance. If the owner was drawing £60k pa, then maybe.

Many clients who pass through accountants hands on tight margins, just covering overheads but drawing barely enough to live on are usually working as busy fools. It's not a business, that's slavery!

UK plc relies on this constant stream of idiots charging less than is necessary for myriad reasons, often because they don't think people will pay what they should. Frequently these were those with redundancies that unscrupulous franchises stung for upfront fees and strung out to die.

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Hallerud at Easter
By DJKL
16th May 2017 11:26

I am sorry, there are activities that work on high volume low margin, especially when little value added but even when value is added.

I cannot say buy in cigarettes and retail them on a high gross margin, it just does not work, the market checks the bounds re pricing possibilities.

And when you get into wholesaling raw materials/ similar, you are shoveling volume. Gross margins are tight, net even tighter.

If you do not believe this just start examining say FTSE companies, take a look at how tight some of their profits are as percentage of sales, start levying tax on turnover and a fair few could struggle yet I would respectfully suggest they on average operate to the level re pricing that their market bears, I doubt on average there is that much slack and they are willfully undercharging.

Even when a value added business there may be limited scope, take say Kier plc , turnover £4.1 billion, underlying profit pre tax £124 million, 3% rate of tax seems to be the max to apply to turnover before wiping out all profits.

http://www.kier.co.uk/investor-relations/2016-annual-report.aspx

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By the_fishmonger
16th May 2017 12:20

Regardless, it is still not beyond HMRC to come up with a fair %age for low margin sales businesses. Even if it were 0·5% that would be just £10k tax due per annum on the highest £2m turnover businesses suggested be taxed under this regime.

Kier @ 0·5% = £20·5m which isn't far from the tax on the underlying items. However, you are talking about companies outside the scope of the £2m or less turnover. Companies over that size are frequently more complex and 1) they can afford to deal with the tax complexities and 2) frequently become structured so they are too complex to be taxed in such a simple scheme - hence the cross-over limit is essential.

Without time to investigate further examples right now, I expect those larger companies would be paying at least as much in net VAT and CT as under the sales tax equivalent.

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By Eddie S
12th May 2017 17:06

If IT and NIC are to be harmonised how about exempting a percentage of the state pension from tax completely?
Easy to administer - the 10% exemption for overseas pensions has worked well for many years.
I should record a personal interest in this, being a pensioner myself!

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By Knight Rider
15th May 2017 12:23

The next Parliament will be defined by the success or otherwise of extricating ourselves from the tyrannical tentacles of the European Union.Tax changes will extend to increasing the tax on the self employed,an IPT increase and some reductions for low and middle earners.
Some more radical changes for the 2022 manifesto could include(but probably won't) abolition of CGT, abolition of housing benefit and a reduction of the IHT threshold to say £50000 coupled with an IHT rate of 20%.
Corporation tax could also be abolished and replaced with a tax on distributions. A fat import duty of 10% could be applied to imports from the European Union.
Tax rises are not inevitable: falling rates increase economic activity and increase tax revenue.

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Replying to Knight Rider:
Hallerud at Easter
By DJKL
16th May 2017 11:36

Knight Rider wrote:

Corporation tax could also be abolished and replaced with a tax on distributions.

The days of each country merrily going its own way re taxation are surely long gone, cross border trading involves countries meshing their tax systems together; like a jigsaw it helps if the pieces fit.

So, how it this no CT but tax on distributions system to work vis a vis our relationships with ROW?

Despite its slow process and clumsy steps there was some progress to using international taxation understanding to close cross border gaps through which profits slipped, it was not perfect (nothing is) but it was making progress- the UK stepping outside the creaky tax framework sounds to me to be akin to short term gain but long term pain.

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