The fall of the Tory party

how different could it ever look to VAT?

• the tax is charged to the company, rather than the company being a conduit for charging the consumer
  
• the company can't offset their newsalestax™ against the VAT they pay other people... like their lawyers and accounts structuring their tax avoidance schemes.
  

My main gripe with VAT comes from having to work on it. Every element of it is cuntery, opaque and needlessly overcomplicated.

That it's also regressive is just another downside.

the tax is charged to the company

Company already pays this to HMRC (it's legally the company's liability - not the consumer's). What actual change are you proposing?

the company can't offset their newsalestax™ against the VAT they pay other people... like their lawyers and accounts structuring their tax avoidance schemes.

Do you mean you just don't want them to be able to offset costs for lawyers etc because you don't like them? Or are you saying you don't want any costs to be capable of offset at all? In which case why not, and is that at every stage?

I think they're saying that general schmucks like me are paying 20% on basically everything, it's a fair whack, especially if you're not earning much. Arsecorp are paying their 20% on some stuff, but also offsetting some of that against their costs, lawyers to bring those costs down, "charity work" or team building or whatever other way they can to pay less, whilst I still pay full whack as an individual, and certainly won't have too many creative ways as a small business to get those same benefits. Maybe less VAT and properly enforced, progressive tax on companies would lead to similar prices overall if they just put them off to offset getting charged tax properly, but that wouldn't be the case across the board so nonarsesmallco could maybe charge less for stuff, or buy things in cheaper and maybe make enough money to need to be taxed properly and do so, and the tax burden is closer to where it should be.

I've often wondered people who are anti tax etc, what do they think is going to fund, say, the fire brigade or the ambulance drivers? Etc etc.

I know there is loads of wasted money and all that, but surely it's the basis of a functional society that people contribute to the services required?

I've often wondered people who are anti tax etc, what do they think is going to fund, say, the fire brigade or the ambulance drivers? Etc etc.

They don't (can't) think that far. At best you'll get an answer like voluntary insurance or something. https://youtu.be/d95mx_v4Njg?si=xva8BUnvxX-uVpEA&t=460

I do get the arguments, I just think they tend to end up with quite broad statements like "properly enforced tax on companies". Ok, but when you say properly enforced, what do you mean? The more you remove deductions etc the closer your CT comes to being a sales tax, and I don't think a sales tax works unless it is consumer only unless you want to destroy any supply chain (so you end up with it being like VAT with input that can be deducted).

A bunch of the stuff you talk about above seems to conflate VAT with corporation tax in how companies can offset costs, which is a bigger question... I suppose my point is that all those knocking VAT might miss the fact that it gives a (very difficult to avoid) charge collected by and paid by big companies that otherwise do have strategies to avoid tax. So I'd be pretty cautious about getting rid as I think the alternatives might well end up worse - i.e. more chance for big cos to dodge the tax and a bigger disparity between small + large companies / groups

I'm aware it's not easy, and"properly enforced" does an awful lot of heavy lifting, but I really don't like regressive taxes like VAT, maybe it wouldn't be so bad if more things that are basically essential to live were lower bands or 0 rated, and whack it up higher on luxury goods.

I guess I view it in context - which is why I said above about a wealth tax being a nice complement to VAT, to make sure our tax system as a whole is still progressive (which as a whole it is, really sharply, until you get to a certain level where wealth matters more).

It seems easier to me to accept some overlap and have people at the lower end paying vat, as long as benefits etc are enough that there aren't affordability issues for them, than drastically reduce VAT.

I'm not anti-tax, if that is aimed at me. I'm against indirect and regressive taxes like VAT that hit those on lowest incomes the most.

I think income should be taxed, but on a sliding scale, so that those on the lowest incomes pay much less. I also think that we should tax wealth in the same way that we tax income so that the richest in society pay more.

Personally, I'd advocate for a complete overhaul of the UK tax system as it is too complicated and far too many people (and corporations) are able to avoid paying their fair share.

It seems easier to me to accept some overlap and have people at the lower end paying vat, as long as benefits etc are enough that there aren't affordability issues for them, than drastically reduce VAT.

I don't think this is the case though, as there are many, many affordability issues and there aren't enough benefits, both as actual benefits or the people/businesses that should be paying, actually paying enough or that getting redistributed to where it's needed.

If you make all essentials VAT free you give a non means tested benefit to everyone (so this is more expensive); if you leave VAT on some essentials then update benefits, it's more targeted.

I'm not saying benefits are enough as it is; I'm saying that if we're designing a system then I think it's simpler to make the VAT flatter and then uprate benefits to help people, rather than cut the tax and have less cash in the treasury overall.

I'm not really sure I know what you mean by the second half of your sentence though so sorry if I've misunderstood

Bar the nutter libertarians, most of them don't believe you have no tax, you just have the taxes they feel are right at the level they feel is acceptable.

Then once you have your pot of money you spend it on essential services and everyone else takes care of themselves thereafter. Fire is one. Ambulances can be private. Which is obviously more efficient and would never say; result in 3 ambulances turning up to the same hit and run to grab the fare.

The reduced state frees up business to be more agile and employ more people. And in the event that they increase efficiency they'll deploy the savings on more investment creating more jobs. And in the unfortunate event that they have to pay the increased profits in dividends and bonuses, then shareholders will invest in other businesses employing more people, and bonuses won't get invested to enable early retirement, they'll be spent stimulating the economy.

In short it's a win-win.

VAT flatter and then uprate benefits to help people, rather than cut the tax and have less cash in the treasury overall.

I do agree with this.

Although it initially seems inefficient to be giving with one hand and taking with the other instead of netting it out, it's often actually much simpler and cheaper to give benefits to all and then have ICT and CGT as the variable.

Company already pays this to HMRC (it's legally the company's liability - not the consumer's). What actual change are you proposing?

If I add VAT to my services (Output) I have to pay that to HMRC. If I buy services (Input) then I deduct the total Input from the Output and pay/get paid the difference. (or at least this is my memory).

That is different from me selling a buttplug for $5 which costs me $3 to make and paying CGT on the $2 profit - which is fair.

Given that we're mainly talking about big tech here an alternative to VAT would be for a % on revenue generated in the UK.

If I add VAT to my services (Output) I have to pay that to HMRC. If I buy services (Input) then I deduct the total Input from the Output and pay/get paid the difference. (or at least this is my memory).

That is different from me selling a buttplug for $5 which costs me $3 to make and paying CGT on the $2 profit - which is fair.

That is how it works but why isn't it fair? Supplier only deducts the VAT part charged to you, not the whole cost - it's just a way of making sure the VAT just sticks with the end transaction instead of applying at every stage of a supply chain.

It's also in addition to, not instead of CGT. So if the business has some spivvy scheme to get deductions for costs incurred in Cayman, they still pay VAT - they can only deduct VAT (Input) if they've actually paid VAT to someone else.

Given that we're mainly talking about big tech here an alternative to VAT would be for a % on revenue generated in the UK.

This was exactly the case where I thought VAT was pretty much doing the same thing that would be doing though...

you give a non means tested benefit to everyone

I'm fine with this, means testing is often more expensive than just giving everyone stuff. The meaning of essentials is also important I guess.

UBI helps with VAT being shitty.

Ha was just typing to say "ok but you're already means testing benefits anyway, unless you're saying UBI" then saw you'd said UBI...

im happy to pay fair (in my addled mind) taxes . im a higher rate tax payer so govt takes 40%, NI is about 12%?, im in the NHS and higher earners get clobbered for about 12% pension which i wont live to see. So every pound i earn i see about 30p - the UK is a sh1thole right now

So every pound i earn i see about 30p

If you average it out, but those first £s you see the same as if they're your only £s, which is fair, but I think you know that, plus you must've got some of the claps.

i know youre right

... So every pound i earn i see about 30p - the UK is a sh1thole right now

It's nowhere near that though.

If you're a higher rate tax payer then NI is a max of 8%. NI is 12% on the weekly earnings between £242 and £967 and then only 2% on any weekly earnings above £967.

Stick you salary and pension contribution into https://listentotaxman.com/ and it'll calculate it for you.

Even at the top of the Higher (40%) rate tax band, with a 12% pension contribution (I'm guessing that's not all yours, but the total of yours and your employer's contributions, if it is all yours then well done for putting that much away each month), the lowest net wage percentage is 53% (i.e. you see 53p in every pound you earn), and you'd need to be earning £142212 for that to happen: https://listentotaxman.com/?year=2023&taxregion=uk&age=0&pension=12%&time=1&ingr=142212

(I'm a higher rate tax payer that bungs a load into my pension and I get to keep 61p out of every £ I earn.)

and I get to keep

You're hopefully keeping that pension too.

Jeez only loosing half your income. Sounds great.

What happens if I don't do much work, I assume my passive income is taxed at the same rate?