How should covid be paid for?

[KenDodd]

I think there should be a small wealth tax (up to 1%) and before anyone starts saying I'm just jealous or whatever, I would be in for thousands of pounds that I don't have and would have to owe. I feel really strongly that we can't just load yet more debt onto the young, they have it much worse than my generation did already (I'm 51).

Yabu - No to wealth tax
Yanbu - Yes to wealth tax

If you vote No, please suggest an alternative that you think would be fairer.

@LampGenie preaching? You do you honey and I'll do me. Have a good day xxx

Generally the state spends money badly and individuals spend it better so the more of people's money you can let them keep the better, within reason. I think about 33% flat tax/NI (or 20% if we can manage it) would be good and abolish things like single person tax allowance, tax relief to contribute to a charity and into a pension and all those distortions, patent box, film finance relief, EIES or whatever it is called relief - all go and just have simple taxes.

Generally the state spends money badly and individuals spend it better
Utter bollocks.

I agree we should simplify the tax system as well though.

Generally the state spends money badly and individuals spend it better

Well that's an argument for increasing state benefits if I ever heard one.
I heard during the financial crisis some economists saying print money and give it to poor people not bankers. The rational being that poor people spend all the money they have (they can't afford to save) this gets the economy moving again.

Generally the state spends money badly and individuals spend it better
I don't believe this btw.

We could pay for covid by clawing back all the money the tories and their mates have syphoned out of the public coffers over the years. Get back all the billions paid for undelivered or delivered poorly contracts.

The posts are all here so I guess people will make up their own minds. My sarcastic prejudice was initially to congratulate you on your altruism.

I certainly have. Even before Lampgenie started advocating flat rate tax. Which is a terrible idea, BTW, and means that poor people pay more.

We could pay for covid by clawing back all the money the tories and their mates have syphoned out of the public coffers over the years. Get back all the billions paid for undelivered or delivered poorly contracts.

Are you for real? I’ve worked on the supply side and on the demand side on such contracts. Do you think that they are written in crayon on a napkin or something? Do you really think that government departments don’t go after service credits if the supplier doesn’t deliver? They are advised by top legal firms. If it were as simple as knocking on the door of McKinsey or Hewlett Packard and saying, we’d like our millions back please, don’t you think they’d have done it?

As for the constant references to ‘loopholes’: have any of the people saying this ever read any of the UK tax legislation? I’m guessing not.

Do you think that the people writing this legislation, and the experts who debate it in the Commons and the Lords, put in ‘loopholes’ for a laugh, like ‘Easter eggs’ in computer games? Only visible to the wealthy and tax experts and your prize for spotting it is paying less tax?

Of course not. The legislation includes general anti-avoidance provisions, and of course HMRC go after any individual or company they think are taking the piss.

Posters regularly parrot, “but tax avoidance is legal and tax evasion is illegal”. Define where you think the line is. Of course you can’t.

What do you think that all the very clever tax experts in the big accountancy firms and law firms and HMRC are doing? Oh yes, devising schemes that they think might get around the existing legislation (the accountants and lawyers) and finding ways of closing them down (HMRC).

I have worked in public procurement too although there have been some issues during CV19 the FT exposed today - there wasn't time to do long tendering for health equipment nd teh EU allowed us (and many other countries) not to follow the usual long winded procurement processes. Some of those processes are an utter waste of money if you know company X is the only in the country that supplies B but you have to waste hours of time on pointless procurement. On the other hand we don't want council contracts going to the leader's uncle so I can see why we brought in those rules.

@Iamthewombat

As for the constant references to ‘loopholes’: have any of the people saying this ever read any of the UK tax legislation? I’m guessing not.

Do you think that the people writing this legislation, and the experts who debate it in the Commons and the Lords, put in ‘loopholes’ for a laugh, like ‘Easter eggs’ in computer games? Only visible to the wealthy and tax experts and your prize for spotting it is paying less tax?

Of course not. The legislation includes general anti-avoidance provisions, and of course HMRC go after any individual or company they think are taking the piss.

Posters regularly parrot, “but tax avoidance is legal and tax evasion is illegal”. Define where you think the line is. Of course you can’t.

What do you think that all the very clever tax experts in the big accountancy firms and law firms and HMRC are doing? Oh yes, devising schemes that they think might get around the existing legislation (the accountants and lawyers) and finding ways of closing them down (HMRC).

Good arguments for simplification, and against the merry-go-round of former HMRCers going to work for accountants and tax advisers.

International business is complex and consequently tax legislation is complex too.

I’m wrangling with the hybrid mismatch rules at the moment. How would we simplify those? We can’t. The legislation has to clearly define the situations in which it is applicable and it has to deal with a precise set of international tax avoidance arrangements.

It’s the same for income tax. I can remember when directors of businesses would attempt to pay themselves in diamonds, Persian carpets (!!) and works of art to swerve NI (one of the Finance Acts in the 1990s put a stop to it). How could simple tax rules have dealt with that? Of course they couldn’t. The legislation has to be written to catch all the dodges that are currently out there. Then it has to be updated when the situation changes. That is why it is complex.

Incidentally, you might be surprised to learn that more people from the accountancy profession move into HMRC than the other way around. There are some really smart people there. That an ex-HMRC director retired and took a consulting role with (I think) PWC doesn’t mean that the traffic is all in one direction.

Generally the state spends money badly and individuals spend it better

Fully agree. Our local council spent nearly £300k on refurbishing our tiny village library, including mood lighting, outside decking area, etc. Then they announced it was to close and put it on the market for £250k. It would have been "worth" £250k before their expensive refurb as there was nothing structurally wrong with it. The £300k was all cosmetic, no new roof, no new windows, no new heating systems, etc. They basically had some budget left over and just had to find ways of spending the cash before the year end.

@Iamthewombat

International business is complex and consequently tax legislation is complex too.

I’m wrangling with the hybrid mismatch rules at the moment. How would we simplify those? We can’t. The legislation has to clearly define the situations in which it is applicable and it has to deal with a precise set of international tax avoidance arrangements.

It’s the same for income tax. I can remember when directors of businesses would attempt to pay themselves in diamonds, Persian carpets (!!) and works of art to swerve NI (one of the Finance Acts in the 1990s put a stop to it). How could simple tax rules have dealt with that? Of course they couldn’t. The legislation has to be written to catch all the dodges that are currently out there. Then it has to be updated when the situation changes. That is why it is complex.

Incidentally, you might be surprised to learn that more people from the accountancy profession move into HMRC than the other way around. There are some really smart people there. That an ex-HMRC director retired and took a consulting role with (I think) PWC doesn’t mean that the traffic is all in one direction.

Merging tax and NIC rules would have avoided all those NIC avoidance schemes in the 90s though, wouldn't it? Sometimes they over-look the simple solutions and make things worse with their "fixes".

Discussions like this go better if we agree what we mean by wealthy. For me wealthy is having significant net assets (e.g. in the millions) or income in excess of £250k per year. I'm not saying those below that couldn't or shouldn't pay more but my biggest gripe is the really rich who manage to pay a relative pittance due to shit tax laws with more holes than my grandad's old underpants. The focus needs to be on capital though - you can't address the wealth gap by targeting income alone.That just slows the rate at which the wealthy continue to accumulate wealth, it doesn't rebalance the wealth they already have.

There's an interesting article on the BBC News site currently which makes interesting reading. It's prompted by Trump's tax affairs but goes into a bit of detail about taxes the rich pay generally. e.g:

"In the UK, a quarter of those earning between £5m and £10m in income and capital gains paid an effective average tax rate of just 11%, Prof Advani and Prof Summer found looking at recent tax data. That was not just lower than the official top income tax rate of 47%, but lower than the rate charged on someone earning just £15,000".

Source: www.bbc.co.uk/news/business-54364904

Our local council spent nearly £300k on refurbishing our tiny village library, including mood lighting, outside decking area, etc. Then they announced it was to close and put it on the market for £250k. It would have been "worth" £250k before their expensive refurb as there was nothing structurally wrong with it. The £300k was all cosmetic, no new roof, no new windows, no new heating systems, etc. They basically had some budget left over and just had to find ways of spending the cash before the year end.

With respect (and I say that because judging by your previous posts you do actually understand tax and probably work in finance), you can’t look at the actions of a bunch of ill-informed dipsticks in your local council and extrapolate that into the state always being bad at spending money.

In the UK, a quarter of those earning between £5m and £10m in income and capital gains paid an effective average tax rate of just 11%, Prof Advani and Prof Summer found looking at recent tax data. That was not just lower than the official top income tax rate of 47%, but lower than the rate charged on someone earning just £15,000".

The devil is in the detail, though, isn’t it? In that report it makes clear that those ‘earnings’ include capital gains, which are currently taxed at lower rates than income, the impact of pension tax relief and the savings associated with entrepreneurs’ relief, which can dramatically lower the gain on selling a business (and which, incidentally, has been restricted this year but was still a thing when the data was gathered).

It’s the same for income tax. I can remember when directors of businesses would attempt to pay themselves in diamonds, Persian carpets (!!) and works of art to swerve NI (one of the Finance Acts in the 1990s put a stop to it). How could simple tax rules have dealt with that? Of course they couldn’t. The legislation has to be written to catch all the dodges that are currently out there. Then it has to be updated when the situation changes. That is why it is complex.

This is precisely why taxation should be simplified. Simplified tax rule s could easily have dealt with that and all the other daft twatting about that happens. It's a stich up between HMRC, Lawyers and accountants so they can all spend time getting paid to argue over ridiculous minutiae. Trying to justify the extreme complexity by simply citing the current lamentable state of affairs and claiming that "proves" we really really need a vast amount of complexity isn't a logical argument.

I’d suggest that alleging that HMRC, the legal profession and the accountancy profession are all in league with each other to con the honest working (wo)man is less than logical. HMRC would definitely be getting the rough end of that deal, salary wise!

Peop,e go on about simplifying tax legislation, but they are never able to say what that means. Usually it boils down to:

• flat rate income tax with mo personal allowance or graduated rates, which hits poorer people.

• for corporation tax, it’s usually abolishing the current legislation and saying, “we’ll just decide how much tax you are paying and we’re not letting you argue”. Which is a great way of driving businesses out of the country.

Businesses won’t set up in the U.K. unless the tax legislation is transparent and comprehensive. It has to address every situation. People who aren’t tax professionals usually don’t understand how avoidance schemes work. The people drafting the legislation do.

@Iamthewombat

I’d suggest that alleging that HMRC, the legal profession and the accountancy profession are all in league with each other to con the honest working (wo)man is less than logical. HMRC would definitely be getting the rough end of that deal, salary wise!

Peop,e go on about simplifying tax legislation, but they are never able to say what that means. Usually it boils down to:

• flat rate income tax with mo personal allowance or graduated rates, which hits poorer people.

• for corporation tax, it’s usually abolishing the current legislation and saying, “we’ll just decide how much tax you are paying and we’re not letting you argue”. Which is a great way of driving businesses out of the country.

Businesses won’t set up in the U.K. unless the tax legislation is transparent and comprehensive. It has to address every situation. People who aren’t tax professionals usually don’t understand how avoidance schemes work. The people drafting the legislation do.

I agree to an extent, but successive Govts/HMRC have over-complicated taxation because of using the tax system for behaviour management.

Incentives such as the film industry tax incentives were intended to encourage film makers to make them in the UK but instead of providing grants etc, they decided to bring in tax breaks. Inevitably (and heaven knows why treasury/HMRC didn't realise), people set up schemes to take advantage of those incentives which were contrary to the aims of the incentive. Sorry, but Govt/HMRC only have themselves to blame for that! If they want to incentivise film production firms, they should have been honest and provided a grant based system and left the tax rules alone.

Same back in the early noughties with Gordon Brown's stupid zero rate and then 10% rate of corporation tax for small limited companies. Was he so stupid that he didn't realise sole traders and partnerships (who didn't have equivalent 0% and 10% rate bands) would convert to limited companies? How about his tax relief on purchased goodwill, which also encourage sole traders to convert to limited companies, and then claim tax relief on the, purely coincidental, £30k goodwill value!

Sorry, but successive HMRC/Treasury/Govts have brought this on themselves by using the tax system for behaviour management. If they want to change behaviour, they shouldn't be doing it via taxes.

Whilst I agree that there have been some ill-conceived schemes (I was in practice when the purchased goodwill thing was announced: you could almost hear the avoidance schemes being devised...barmy), I’m not sure that you can point to them as evidence that tax needs to be simplified so much that any non-finance professional of average intelligence could understand it.

It’s a recipe for inviting the brains inventing avoidance schemes to run rings around your tax system. I work in private equity. A very simple tax system would be catnip to some of my colleagues.

Could the average man in the street understand the controlled foreign companies rules? What about the hybrids rules? What about thin capitalisation? The master is, probably not but it doesn’t mean that the legislation is too complex, or inherently flawed or that it isn’t doing the job it was designed to do.

The ANSWER, not the MASTER!

Found this online about council tax.

fairershare.org.uk/?utm_source=facebook&utm_medium=cpc&utm_campaign=FAIRSHARE_Broad_South+West_45-54&fbclid=IwAR0Ck_g_jPFBX28Q4k824rWOpjNVH9kpBbh4uwjuuKol6zjQFu6X6QwSITY