[Finance] Tax Rates Going Forward

[NooBHA]

Dealing with the contentious bit of Corbyn first, probably like you I did truly look at their tax elements of the last manifesto and also the documents by the architect behind it all (non Lansman), clearly a Marxist. That’s not an insult, he was. This guy went way beyond the bits we’re touching on here, he was emphatic about anyone having land (agricultural or residential) being taxed annually on its paper value regardless of whether they’re cash poor, and that residential/agricultural landowners should not gain when their land becomes available for housing. Instead compulsorily bought at arable land values, in effect gifting its new enhanced value to the nation. For many reasons I totally disagree with that form of command economy, the appropriation of someone’s assets, their rights. We could start a whole new debate here raking up the ins and outs of a Corbyn government, I’d rather not talk about a scenario that will never happen. I’m not anti Labour, I voted for Blair (yes I know Corbynistas on NSC despise him ... now) and I have faith that Starmer will be far more centrist that Corbyn. Let’s face it Starmer took just days to boot out all the hopeless ‘young guns‘ who imho had led a bitter class war agenda.

On to the positive bit.

I agree with your tax proposals. I want the multinationals taxed as much as you do. My logical comment has always been that Starbucks, Amazon, Dell and Apple won’t cut off their noses, by walking from the UK. My fear is that Trump and the American powers that be, are very aggressive about protecting their companies. If we make a unilateral move, there’ll be reprisals against Jaguar/Land Rover for example who’ll in effect be tariffed out of the US market. Very spiteful, very hypocritical, but it works. Huge numbers of UK jobs at stake.

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Offshore havens for individuals/trusts etc - I’d love one day to see the demise of ALL tax havens. You would know, I do, that this is not just a British thing in any shape of form. When the Lichtenstein bank and Panama legal records were laid bare, they revealed huge numbers of very powerful, rich (and some celeb) Germans and French tax evaders for example.

Deep Breath

I agree with you that there is not too much point spending time going over the Corbyn Manifesto - The Electorate didn't have the Appetite for Socialist Policies. Even though by Default we now have them due to the Covid-19 Outbreak
All the people screaming we can't afford a Robust Welfare System. Some of them are now not only relying on the Welfare System are now coming out with phrases like ''How can we be expected to live on that amount of money'' Karma works in mysterious ways.

I didn't look into the origins of who drafted Labour Party Manifesto so your Assessment of it I have to bow to your greater understanding of it's origins. That said, only about 10% of Manifesto Pledges ever make it to Royal Assent Legislation. And that relates to every Government.

Like you I don't Advocate Land Grabs or Property Grabs - And in the UK whilst we still have The House of Lords it would never happen so there was never any fear of that coming to Fruition, so that was ill thought out to put such a scary piece of Policy in the Manifesto. It alienates too much of the Electorate.

On to your fear Trump and the US;

That is a Legitimate fear - Someone as reckless as Trump could and would do such a thing and not having the protection of being in a larger group of countries embodied in the EU - The UK would be more vulnerable to a Vindictive Administration like a Donald Trump led US Government. He won't be at the helm forever. Hopefully he will lose the US Election and that will leave the UK with a more predictable and less volatile US Administration to deal with moving forward.

The Tax offshore havens. They will never be fully eradicated ; however one of the ones you mention in Lichtenstein. They for the most part along with Switzerland have been brought '' to heel'' and entered into DTA's now. They had to or they would have been ostracised by the EU when negotiating Trade Deals and free movement regulations.

The problems in relation to Tax havens now lies for the most part with the Foreign Territories of the Old Colonial Countries like The Netherlands, France, Spain, UK and Portugal. - Places like the Dutch Antilles and British Virgin Islands for example need to be more accountable. Britain and The Netherlands are not doing enough to make them Accountable and Transparent.

Wealthy Companies are being allowed to have Trading Addresses in these Territories, when their real Trading Address and Registered Offices are in fact the UK and The Netherlands. These small Territories are a Law unto themselves in terms of releasing information and Countries like the UK and NL don't hold them to account like they should or could do by restricting Trade.

Money Laundering Procedures are not Robust enough and there is too much ''lip service to ML Procedures as opposed to following up on the actual ML Regulations which are constantly flouted all over the World. We are never going to get total transparency but we should be doing better.

Tax Legislation is often Done in Isolation. When a Law is drawn up. The Architects of any Legislation should be anticipating the next moves of the organisations that this Legislation is designed to capture in terms of Tax Revenue Collection. This doesn't happen often enough and that is why we will be forever playing catch up.

It also annoys me how easy it is for a company to move its Franchises around the EU Countries every time a country offers a Tax Break. Malta being the perfect example of this - They offered loads of tax breaks in recent years. Companies move there and then move on when the tax breaks are removed.

That last statement won't go down well with Brexiteers who think that the EU should have no control over any Nation within it. But when it comes to Taxation, there has to be some sort of cohesiveness - Many will disagree and that is their prerogative but if you want tackle Tax Evasion by large Multi Nationals, it is the only way it can be done effectively.

 

[rippleman]

Would be nice if the likes of Amazon, Starbucks, Google, Vodaphone etc were compelled to pay their fair share of tax on UK profits.

Not going to happen, obvs, so the burden will fall on those of us lucky enough to still be in jobs and our children thereafter.

This is the answer, of course. If the corporate tax evaders were hammered hard and had to pay their share, there would be little or no need to increase taxes for those currently within the basic rate band.

But no Tory government is going to place an onerous tax burden on large corporations; Cameron, May & Johnson have all had the opportunity to do it. None of them have.

So it will be down to the likes of us to carry the burden whilst the big corporate tax dodgers laugh at us.

I make my protest by not buying from or shopping with the corporate tax evaders. I suspect I am in a tiny minority though.

 

[blue-shifted]

This is the answer, of course. If the corporate tax evaders were hammered hard and had to pay their share, there would be little or no need to increase taxes for those currently within the basic rate band.

But no Tory government is going to place an onerous tax burden on large corporations; Cameron, May & Johnson have all had the opportunity to do it. None of them have.

So it will be down to the likes of us to carry the burden whilst the big corporate tax dodgers laugh at us.

I make my protest by not buying from or shopping with the corporate tax evaders. I suspect I am in a tiny minority though.

You're not alone and what I think is needed is people like you gathering together and being open and what you're doing and why you're doing it and more and more will get on board

Having said that, lack of knowledge is a problem. I didn't know about Vodafone's tax affairs and I'm with them.

 

[blue-shifted]

To pay off this Coronavirus debt, if I was in power ...

All big ticket items (HS2), that nuclear plant etc, scrapped immediately. Their costs will only escalate as their workers will have to socially distance.

Publish tax of all companies trading and mark them all very publically, red, amber green, according to whether they are paying a fair amount of tax. (ie Amazon are red)

Tax havens, I'd resolve with the use of gun boats. Big ones. Cannons have focussed minds for centuries

And I agree with whoever was saying about a sliding scale tax for property

 

[NooBHA]

Need to find better ways of taxing multi-nationals for sure.

Never mind a vacant property tax, though - there will be lawyers and tax advisers who will be able to prove it isn't vacant! Make it simpler - a universal, graduated property tax. The tax on a house less tan £250K would be pretty small, but once they get passed a million quid the rates would go up quite sharply.

The beauty of this idea is in its simplicity (and unavoidability). The tax would be levelled on the property, regardless of who owned it. Whether it was a second home, a UK base for a Brit living abroad to avoid paying tax, a Russian oligarch, a Saudi Prince or a dodgy trust based in the Seychelles, the property is in the UK, and the tax must be paid, regardless of who owns it. No way out of paying - if you want to keep the ownership of the property, pay the tax!

Failure to pay the tax, and the property becomes the property of the Government, who can sell it to boost revenue, or knock it down and use the site for affordable social housing (dare I suggest Council Housing?)

We already have a Universal Property Tax here in the UK - It is actually paid at Local rather than National Level. Known as Council Tax. That is based on a perceived valuation of a property.

I wouldn't be a fan of another one at National Level. Simply because you actually have elderly people living on high value homes but who are now surviving on Pensions only now. That would make life difficult for them, especially as they often now have to fund some sort of care for themselves as they become more in firmed.

The reason I advocate a a Vacant Property Tax is to catch the Non Resident Taxpayers. It is easy to make it robust. If w wealthy taxpayer claims to be Non UK Resident then he is the majority of the time claiming that he is not in the UK 183 days of the year. If he is on the Land Registry as owning one or even more than one UK Property then by default he or she is not living at that UK address. The facts are black an whit. If you claim not to be in the UK then you can't be living in that property. So it is Vacant........Tax it - 20% is fine so on every £2m property you pull in £400K. To raise that sort of Revenue with Tax Enquiries you would need to Investigate about say 200 of them. That's wasted Manpower. Hit the Big ones and hit them hard.

 

[LlcoolJ]

The cost is a joke, but the midlands/north would go berserk. Sick and tired on the investment in SE England.

I've honestly never met anyone who is in favour of it. Investment in the railways? Nearly everyone. Nationalisation? Lots of people. HS2? Nobody.

 

[Diablo]

...and unfair. Those with the broadest shoulders should bear the greatest burden.

I would suggest introducing a wealth tax to supplement our income tax.

They would do 2.5% of £15k = £375....2.5% of £500k = £12.500

 

[Martlet]

Do you mean the investment going into London? I don't see a hell of a lot of money going in to the Sussex transport infrastructure.

Apart from the redevelopment of London Bridge Station, the Brighton Main Line Improvement and the Gatwick Airport Station Upgrade, what have the Romans ever done for us?

 

[bha100]

I've always been paye so i've no idea why individuals would do this other than avoid a tax of some kind.

I was reading an article about Laura Whitmore, and apparently she has no idea how much she is paid, she was quoted as saying ' To be honest, I don’t actually know (how much she earned last year). Money goes into my limited company and I pay myself from there.'

Im sure many do it but why would you set up a company that gets paid on the work you do only to then pay yourself from the said company, shirly it's a form of tax dodge is it not ? Thanks

 

[beorhthelm]

Re the multinationals, the way business pays tax needs to be totally overhauled. It's ridiculous and grotesquely unfair, that I have to pay 25% more in an independent coffee shop, that I do in the Starbucks next door, because the independent shop pays tax.

The tax needs to be on the purchase price of any given item, not the overall profit of the organisation.

Who knows, our high streets might not be decimated after all if going to a shop, when safe to do so, is the same price as Amazon.

you mean some sort of purchase tax, at point of sale, as a percentage the value?

 

[Westdene Seagull]

The cost of replacing Trident is about £205bn.
Scrapping that would be a good start.

We could knock HS2 on the head too. That’s going to come in at way over £100 billion.

This and this. I'd also start heavily taxing the banks who yet again have only helped people because the government mandated it and still did it screaming and shouting. Obviously tax for multi-nationals needs looking at as well. The individual shouldn't see a tax increase. Anything the above measures can't claw back should be treated as a 'war debt' and paid for over many generations.

 

[Martlet]

To pay off this Coronavirus debt, if I was in power ...

All big ticket items (HS2), that nuclear plant etc, scrapped immediately. Their costs will only escalate as their workers will have to socially distance.

Publish tax of all companies trading and mark them all very publically, red, amber green, according to whether they are paying a fair amount of tax. (ie Amazon are red)

Tax havens, I'd resolve with the use of gun boats. Big ones. Cannons have focussed minds for centuries

And I agree with whoever was saying about a sliding scale tax for property

It's a fallacy that cancelling major projects will "pay off" the corona debt. On the contrary, if the end-result is going to be revenue-generating, major infrastructure projects will get people back into work, generate tax proceeds for the taxpayer, bring in commercial capital and help put the economy back on a progressive footing.
For example, the construction of "that nuclear plant" is being funded by EDF...

Corporation tax covers around 10% of UK total tax take. Income tax & NI combined cover 50% and VAT 20%. Tax havens and corporation tax avoidance make lovely headlines, but getting people into work does a lot more...

 

[Westdene Seagull]

[TWEET]1260520322916388864[/TWEET]

Comparing just tax on wages, or income tax, isn't a fair measurement. For starters it doesn't include NI in the UK. Nor different VAT rates across Europe and even rates across different goods.

 

[blue-shifted]

you mean some sort of purchase tax, at point of sale, as a percentage the value?

I haven't figured out the minutiae dear boy.

But yes percentage of the value seems fair. What doesn't seem fair, is in the example earlier, whereby I can get a cup of tea from one shop which does pay tax or a cup of tea from another one next door which doesn't. And the cup of tea from the one which doesn't is massively cheaper.

So yes. I suppose I'd look to design a tax system whereby if I but a cup of tea which pre tax is £1, they actually charge £1.25 and the 25p goes to the treasury. I'm sure for many products this will just mean increasing VAT. I just think that the current system for collecting tax from business was designed for the pre-digital, pre globalisation world.

We also need, for example to stand together with other nations and not let the corporate giants pick us off. For example, we need to stand with Europe over the ongoing google case. Ireland have to stop bending over to Apple for example.

So partly it's a change of law, partly a change of the way we think. Countries have to stop looking at each other as competition.

 

[blue-shifted]

It's a fallacy that cancelling major projects will "pay off" the corona debt. On the contrary, if the end-result is going to be revenue-generating, major infrastructure projects will get people back into work, generate tax proceeds for the taxpayer, bring in commercial capital and help put the economy back on a progressive footing.
For example, the construction of "that nuclear plant" is being funded by EDF...

Corporation tax covers around 10% of UK total tax take. Income tax & NI combined cover 50% and VAT 20%. Tax havens and corporation tax avoidance make lovely headlines, but getting people into work does a lot more...

The set up costs are EDF, but I'm pretty sure I'm correct in saying this is PFI for which we will pay a lot more over the long term.

More generally, I'm not advocating we don't invest in the economy, but smaller local projects rather than massive national vanity projects. The completion quote on all of these will have doubled in the last 2 months, (and they would all have gone miles over budget before COVID) and we won't see any economic benefit, for at least 20 years.

 

[beorhthelm]

on where taxes come form have a look at this from IFS (2017, broadly the same today give or take).
summary, the big contributions are Income Tax (25%), NI (19%) and VAT(18%). popular places to rise more taxes are property (9%) and corporation tax (8%). this puts some £ on the portions if you want to raise say 10bn its easier from income taxes than corporation taxes, because it represents about a 6% rise or 25% rise respectively.

tax avoidance also a popular target, is usually because taxes are due elsewhere under law or regulations create perverse outcomes (such as employee shares schemes accounted as losses against profits). so yeah, change the rules but do so with knowledge of and accepting the consequences (less tax revenue from shares schemes taxed at personal margin rates). ask if we want tax to raise revenue or change behaviours, because if a targeted tax intends to do the later and succeeds it will not raise as much revenue. ask what we services we want and determine how much that costs, not pitch a figure of spending first, leading to inefficent delivery.

 

[blue-shifted]

It's a fallacy that cancelling major projects will "pay off" the corona debt. On the contrary, if the end-result is going to be revenue-generating, major infrastructure projects will get people back into work, generate tax proceeds for the taxpayer, bring in commercial capital and help put the economy back on a progressive footing.
For example, the construction of "that nuclear plant" is being funded by EDF...

Corporation tax covers around 10% of UK total tax take. Income tax & NI combined cover 50% and VAT 20%. Tax havens and corporation tax avoidance make lovely headlines, but getting people into work does a lot more...

Oh yes, don't you think this corporation tax percentage should be increased? It would be if the multinationals paid their share.

I disagree with you about the nice headlines as well. If we're going to ask people to pay more to pay off debts and rebuild the economy, which clearly we are, it's inconceivable that we could do this without finding ways to make the super-rich and Silicon Valley pay their share. It's not about any kind of class war. It's about a principle and it's about basic fairness.

 

[highflyer]

https://www.taxjustice.uk/blog/archives/05-2020

You don't run (pay for) a poll like this if you don't already know the answer. The point is exactly that the answer was already known. A wealth tax is not easy to apply practically - but technically it is not impossible (some very serious work going on now to develop the best way to do it in the UK, more news in July) but the biggest sticking point has always been public opinion. And that is changing fast.

 

[GT49er]

We already have a Universal Property Tax here in the UK - It is actually paid at Local rather than National Level. Known as Council Tax. That is based on a perceived valuation of a property.

.
Yes, I know that - but it's not universal - there are different rates for various types of occupancty, reduced rates for single occupancy, and is often paid by housing benefit. Too may ways for people to use lawyers to reduce it. Where there's a loophole there's a way and all that..................

I wouldn't be a fan of another one at National Level. Simply because you actually have elderly people living on high value homes but who are now surviving on Pensions only now. That would make life difficult for them, especially as they often now have to fund some sort of care for themselves as they become more in firmed.

I get rather tired of the argument about not taxing poor little old ladies living in mansions.
1). The likelihood is that the house has already been paid for - no rent or mortgage to pay;
2). There is always an option to downsize - I'd love to be rolling about in a £1M house, so I could easily find half that for a very nice smaller property!
3). They can take out a lifetime mortgage to help pay the bills; that might also help them to get below the level at which they have to pay for care if they need it.
4). They can always approach the children - "Do you want to inherit my lovely big house when I pop my clogs? If so, perhaps you can help Mummy out a bit now".

 

[beorhthelm]

I haven't figured out the minutiae dear boy.

But yes percentage of the value seems fair. What doesn't seem fair, is in the example earlier, whereby I can get a cup of tea from one shop which does pay tax or a cup of tea from another one next door which doesn't. And the cup of tea from the one which doesn't is massively cheaper.

So yes. I suppose I'd look to design a tax system whereby if I but a cup of tea which pre tax is £1, they actually charge £1.25 and the 25p goes to the treasury. I'm sure for many products this will just mean increasing VAT. I just think that the current system for collecting tax from business was designed for the pre-digital, pre globalisation world.

We also need, for example to stand together with other nations and not let the corporate giants pick us off. For example, we need to stand with Europe over the ongoing google case. Ireland have to stop bending over to Apple for example.

So partly it's a change of law, partly a change of the way we think. Countries have to stop looking at each other as competition.

it is VAT. Starbucks isnt any cheaper than the cafe next door (that ive ever seen, usually more expensive) and the both shops will pay the same taxes. the issue you have is where the parent company avoids taxes from their franchise fees because they funnel it through Swiss company, changed lower tax there, and not realising a profit on their UK accounts. followed the rules on transfer pricing. would be good to change, and we gain taxes from foreign business that produce overseas and sell here, like Sony or VW. Ireland offers companies rule to not tax on revenues made overseas, to encourage them to set up there. i say we have no business setting their tax rules. next thing we'll be telling them how to spend their money, set their laws and so on.