Warning to Landlords (and others)

Warning to Landlords (and others)

The Government has made it very clear that tax evasion (not paying due taxes) is illegal and will be prosecuted. Whilst we may all have an opinion about the fairness of the law, failing to pay taxes invariably carries with it the real prospect of prison.

Richard Fuller found this to the cost of his liberty. As a landlord with various properties he failed to properly declare and pay the capital gains tax that was due on those he sold between 2006 and 2013. As a result, he evaded £157,725 of capital gains tax. As of last Friday, he has now begun a 27-month prison sentence and of course assets are being taken to pay the correct tax.

Hidden costs but not hidden taxes

Whilst there will always be people that do well from property investments, the reality is that property is not very liquid. There are also many forgotten or hidden costs – such as purchase and sale costs, insurance, lost rent, improvements, accountancy costs and of course tax on the gains.

It is never worth evading tax. It is illegal and anyone doing so will still find plenty of room at her Majesty’s prison service, despite reports of overcrowding. Mr Fuller was found guilty of cheating the public revenue and fraud by false representation by a jury at Winchester Crown Court.

What the Taxman said..

Richard Wilkinson, Assistant Director, Fraud Investigation Service, HMRC, said:

“Fuller thought he was above the law and decided not to declare or pay the tax due from the sale of some of his property portfolio. It is simply not acceptable to steal from UK taxpayers.

“HMRC will continue to pursue those who attempt to hide their gains on assets, their income, and investigate those who attack the tax system. We ask anyone with information about suspected tax fraud to contact our Fraud Hotline on 0800 788 887.”

Evasion is not Avoidance

In short, don’t mess with HMRC. It is never worth it. Tax evasion is illegal, tax avoidance (which is using legitimate arrangements within the tax laws – such as ISAs, pensions etc) is something that the Government encourage to help reduce reliance upon the State and invest in the UK economy.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

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Warning to Landlords (and others)2017-08-14T13:41:17+01:00

Panama Papers

Panama Papers

I imagine that you will have picked up on the current big story – the Panama Papers. I imagine that this will rumble on for some time. There are lots of issues to discuss, the ability for the very wealthy to hide their wealth, those that facilitate this to happen, laws about secrecy, laws about laws, political corruption, money laundering, what is ethical, the difference between tax avoidance and tax evasion… not to mention data security.

I don’t know if my thoughts will add much to the discussion, suffice to say that “the system” (by which I mean global tax system) is so complicated that it is little wonder that it is exploited, or some may say “used to advantage”.

It is a sad state of affairs when the wealthy believe that they require such secrecy and the better questions will ask why it is really required. As for the tax system – nobody really likes paying tax, but of course if we want any sort of welfare state or viable social system, we need to combine resources collectively. I don’t know if the debate can be reduced to a matter of “vast wasted taxes spent by bureaucrats” or perhaps “we pay too much tax”.

The other Black List

Fairness is very difficult to define. The vast majority of people in the UK pay very little in direct taxes. The reality is that we are all, quite obviously, interconnected. Billionaires paying less tax than their staff simply does not seem fair in any form. I’m reminded of a line from “The Black List” in which the main character, Raymond Reddington, says “if I paid any tax I’d be furious at how it is wasted” or words to that effect.

Tax is one of those deeply divisive issues and of course is enmeshed with political ideology. Part of my job is to help clients minimise tax payments and use tax allowances properly. So I’m acutely aware that I’m part of the problem… essentially taking tax receipts off the table, so that more needs to be found. Nobody likes to see public money wasted, which merely compounds feelings of frustration. The Panama papers imply that those in charge of deciding how public finances are spent, don’t like the way they do it for their own nations.

Daring to think simply?

Does life have to be so complicated? If there was one rate of tax, would there be any need to hide money? (currently taxed at very different rates). If the very rich could declare their wealth properly, would more tax be collected? Is anyone immune from financial corruption as the numbers get larger and larger? Does the reality that the Offshore market exists confirm the suggestion that the very rich would leave, if tax rates are increased? Or have they effectively already left? Is it possible to have fair taxes when certain countries exist purely to defy such reasoning (Monaco). Certainly rather more is to be revealed by the #PanamaPapers and one thing that is certain to me…. this is not new news.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Panama Papers2017-01-06T14:39:18+00:00

Money and Power

Solomons-financial-advisor-wimbledon-blogger

Money and Power

Perhaps my age is showing, but it is only day 6 of the new year and I am already fed up with the election campaign. I ought to be celebrating our democracy and the opportunity to hear reasoned arguments, however inevitably we seem stuck in a cycle of who will tax or cut most, the prospect of genuine change and improvement for all seems rather unlikely with the inevitable tension around money and power. Here Lies Love NT

In a more reflective moment, I remind myself that this is not a dictatorship and we at least get to vote and I don’t really think we are at the mercy of a despot who has anger issues and a twitching finger poised over an end-all button. This isn’t the case for millions of “voters” around the world who are marched off to vote for egomaniacs. This in mind, a relatively new musical to arrive via New York at the National Theatre “Here Lies Love” is based on a 2010 concept album of the same name, which gives musicals a nightclub injection. If you think that a nightclub is exclusively for the “young” perhaps think agains as, the creators Fatboy Slim (Norman Cook) is 51 and David Byrne is 62. The production has the flavour of community theatre, with the execution of high-end night club. A moving stage and audience, all combine to great effect and an entertaining, immersive experience.

Imelda Marcos

This is the story of Imelda Marcos, her rise and fall from power. Byrne and Cook wanted to explore what makes powerful people behave the way they do. I’m not so sure that this was explored terribly well, whilst displaying a delusional, drugged up Imelda, she isn’t portrayed that badly – a little bit too vanilla in Manilla – little about her excessive flamboyancy and penchant for hundreds of shoes. The story is chronological, revealing the fragility of her marriage, her inability to cope with her rags to riches story and a familar narcissism of Heads of State that seem to believe that they “give their all to their people”.

The Price of Democracy

There was little in the musical that gave me reason to believe such behaviour was understood or how to spot it in others and take precautionary action…so no tips for our elections. The world seems to have done little during the period of martial law and  assassination of the opposition including the shooting of Benigno Aquino on the steps of his ill-advised return flight to Manilla on 21 August 1983 (age 50) which you may remember. In the Philippines, the Marcos regime was eventually cast out by a peaceful protest, following a corrupt election (February 1986) against Aquino’s widow following which the public simply decided enough was enough. Marcos and his family took US advice and support then fled to Hawaii along with 24 suitcases of gold bullion and jewellery. Sadly for Imelda this took precedent over her 2,700 pairs of shoes. It is estimated that Marcos stole over $10billion from the country, much was invested into various family related businesses and Swiss accounts. The Swiss have so far returned about $684 million. So for me, this musical, whilst being entertaining does little to understand how and why power corrupts so absolutely. Indeed one might argue that the catchy tunes, flashing lights distract from the real story… but then, perhaps that’s the point.

Dominic Thomas

Money and Power2017-01-06T14:39:31+00:00

“A-List” you don’t want to be on

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“A-List” you don’t want to be on

The Inland Revenue, these days known as HMRC, yesterday published its list of 1,172 “aggressive tax avoidance schemes” which are under investigation. These are the sort of schemes that the media has been providing significant coverage and delighting in the opportunity to have a pop at an “A-List” celebrity or two… or rather more. The list is a 2 page document of numbers, looking rather like a sequence from the film “The Matrix” which I asked my design team to parody to make the point. Like it?

Solomons-IFA-Twitter-HMRC

Tax avoidance is perfectly legal, tax evasion is not. Tax avoidance includes everything from investing in an ISA, pension or using your annual capital gains allowance. It would also include moving savings into a lower or non-taxpayer’s name to avoid a higher rate of tax on an albeit puny amount of interest. These are of course “schemes” that are manufactured by the Chancellor and HM Treasury to satisfy number of aims. Firstly, to provide a tax-break for voters. Secondly to encourage saving and therefore reduce reliance on State support and finally to encourage trade, which is how we create jobs, raise taxes and pay our way. Most people with a modicum of intelligence will use tax avoidance schemes if they can.

Tax evasion is illegal, it always has been. Tax evasion is the deliberate and wilful, non-payment of owed taxes. This is effectively the running away to Rio with your millions out of the reach of HMRC. Society loses out and society is cheated and if the tax gap figures are to be believed this amounts to between £31-£35billion each year.

Aggressive tax avoidance schemes are a grey area, hence we are in this mess. To suggest that they sail close to the edge of the rules is fair. Some schemes deliberately creating or manufacturing losses, or moving money around offshore to avoid the UK tax system. As with most things, some of this is more obviously close to evasion than others. The motivation behind it all is to pay less tax, not necessarily to have a fantastic investment return. However in the context of 45% or 50% tax rates, the tax saving is of course a very healthy return. Invariably those that market and manufacture these schemes are paid handsomely (some might say excessively) for their cut of the scheme. For example on £100,000 investment, which might save £100,000 of tax a charge of £15,000 is not uncommon. The motivation is to save tax, because some people pay huge amounts, which they believe is unfair. This is probably due to a belief that Government has no real idea about how to spend wisely. It is often coupled with the idea that personal control over personal wealth is a defining feature of real freedom.

My view is simple. It isn‘t surprising that people want to reduce their tax bill. The tax system could be both simple and fair, but it is highly complex. I believe that this is deliberate. Complexity serves the very wealthy, who are also those with power. However some of these schemes are used by more “ordinary people” not simply the super-rich. People that fundamentally believe that they pay more than their fair share of tax. This is where the debate or argument needs to be had, as there is little real prospect of Governments (of any persuasion) having a simple Tax and Trust system, despite deceptive terms like “Simplification”.

Whatever your view, HMRC are now investigating a huge number of schemes, each of the numbers represents a scheme number. HMRC now has the power to simply take money from your bank account. This process is very much a case of guilty until proven innocent and whilst some will be, not all are, yet this approach could have a very damaging impact. Of course, those that peddle the schemes are usually covered by water-tight contracts with clauses waiving any responsibility and point to “Queen’s Council” as opinion not “fact”. Hmmm.

Anyway, we will not use schemes that “sail close to the edge” of tax rules. We will use allowances and avoidance tools of course, but not the type that land you in trouble with HMRC. There will be no need to dodge bullets…

Dominic Thomas: Solomons


References:

HMRC Avoidance: http://www.hmrc.gov.uk/avoidance/

HMRC strategy: http://www.hmrc.gov.uk/budget2013/evade-avoid.htm

“A-List” you don’t want to be on2017-01-06T14:39:35+00:00

Marriage Tax

You may have picked up from the headlines in various news media, that the Government have once again pushed the notion of married couples being able to share their personal tax allowances. This is a highly inflammatory issue as you may imagine. Those of us that are married probably did not do so in order to enjoy tax breaks. Frankly, I’m not sure why this issue has raised its head again.

In truth married couples already enjoy certain tax advantages. The most obvious being that there is no inheritance tax to pay between them and essentially they enjoy (or rather the wider family does) a doubling of the personal “nil rate band”. This assumes that they have a valid Will in place – not having a Will does rather reduce the impact of this valuable benefit.

In addition, capital gains tax allowances can also be shared across a married couple and of course one could argue that the ISA allowance, whilst being individual, enables a couple (married or not) to invest twice as much between them. So whilst there are reports of “backbenchers” (never named, if indeed they exist) calling for tax advantages for married couples, one might suggest that they already exist. However, this is about the personal allowance and essentially a married couple sharing unused personal allowances between them. According to the BBC website the Government initiative will save some people about £150 a year. Hang on? If the personal allowance is £9,440 in 2013/14 (for those under 65) this is how much each individual can earn tax free. So assuming a basic rate taxpayer (20%) would otherwise not enjoy any of this, then surely the tax advantage is 20% of £9,440 which is £1,888 of tax saved. Certainly this figure reduces if earnings are in excess of £100,000, at which point the effective rate of tax is 60% as the personal allowance is gradually withdrawn.

I know tax is complex – more so the more you earn and the greater your assets, but  for those on say £80,000 a year as a single income, then all that is really happening is a doubling of the personal allowance, to £18,880 before any income tax is payable. The next £32,010 will be taxed at 20% and then the remaining £29,110 would be taxed at 40%. The overall tax rate being 22.5% (income tax as % of £80,000). This against the current system of a single personal allowance and relevant tax rate of 27.2% and extra income tax of £3,776. As you will have gathered, the tax saving is on a case by case basis, but I cannot agree with the BBC’s figures of £150 saving – its closer to that each month, not each year. This prompts my often trodden path of “do they understand the figures? ” (both politicians and journalists).*

There can be numerous reasons for a spouse not to be working. This might be voluntarily, or enforced (redundancy of illness). The problem with every rule is that there is always likely to be a good case to be made for an exception and one can only really fall back on the principles of fairness to all. If this were truly any politicians cause, then we would not have such a complex tax system or benefits system. Both need to be simple and ideally with a single rate of tax and benefits across all forms of income, earned or paid as interest or dividends. This is certainly not a simple issue and as a result can only be for perceived political advantage. I don’t know about you, but I am fed up with politicians of any persuasion, trying to buy votes, we deserve better treatment than that surely. We would all like to pay less tax, naturally, but we also know that tax funds our infrastructure, healthcare, welfare, armed forces, governance and the wider economy, the real question is surely is tax fair? and if so, is is being spent wisely?

* It seems that the BBC figures are indeed correct. The current, or rather original proposal was to only allow £750 of the personal allowance to be shared between spouses, amounting to £150 (20% tax). It only applies to couples where the higher income member is a basic rate taxpayer and not available for higher rate taxpayers. So as usual, the devil is in the detail and all that this really suggests is the politicians cannot be trusted to tell a full story and frankly this is a lot of hot air….

Dominic Thomas – Solomons IFA

Marriage Tax2017-01-06T14:39:47+00:00

Tax Year 2012-13 Ending

The 2012/13 tax year is nearly at an end. Time is running out. HMRC essentially operate a world of “use it or lose it”. For most people this means ensuring that you have maximised your pension allowances (£50,000 is the maximum permitted in the tax year, subject to a plethora of qualifying rules – aren’t we all thankful for pension “simplification”). These days pretty much the only advantage of a “pension” is the tax relief – which is applied at your highest rate of tax. Thereafter, have you used your ISA allowance, all £11,280 of it? capital gains tax allowances? and a heap of others for those with more sophisticated planning.

Most people give money to charity, so do remember that this attracts tax relief in a similar way to pensions. Also you are able to use your annual giving allowance of £3,000 per person (the giver) moving money from within your estate to those that you want to benefit, a very basic form of inheritance tax planning – it can certainly become much more complex based upon the size of the IHT problem that you expect.

There are other forms of allowances, but please treat these with caution and remember the adage “fools rush in where angels fear to tread”. I was on the train on Saturday evening, coming back from a very good performance of “The Judas Kiss” when the couple next to me started discussing their financial planning rather loudly ( I really wasn’t trying to listen). The subject of their conversations was about VCTs (Venture Capital Trusts) and the tax relief available. They had clearly not attended the same meeting as one was describing how the VCT worked to the other. Their “adviser” had not charged for his “advice” (not permitted nowadays) and I was rather concerned about their understanding of the risk involved and the lack of compensation coverage if or when things go wrong. The FSA would suggest that only around 3% of all investors are likely to find this sort of investment suitable (3% of investors, not 3% of the population). Of course some VCTs can be a great solution, others require you to be more of an expert than a Dragon in the Den. Please be aware that there will always be someone willing to discuss a “guaranteed winner” to an unsuspecting person. When it comes to investing, there is no such thing as a guarantee, despite what it may say on the tin. Be warned – and sadly I have to say that the information on the MAS website fails to adequately convey the degree of risk with a VCT. You can lose all of your money. It is not called venture capital for nothing!

We will be closed for Easter (Good Friday is this Friday!). We re-open on Tuesday 2nd April and I can assure you that despite every good effort, attempting to make a tax-year end payment by Friday 5th April will create some significant stress if you leave it late.

Dominic

Tax Year 2012-13 Ending2017-01-06T14:39:49+00:00

Tax Avoidance – HMRC turns on the spotlight

Crossing the Tax Avoidance to Tax Evasion Border

HMRC has a spotlight page which is aimed at drawing attention to tax avoidance schemes that may turn out to be tax evasion schemes. This is effectively the equivalent of a border patrol between the two. One would be forgiven for thinking that this has been like many physical borders in Europe – a line on a map that you can cross without even noticing. Let me disavow you of that notion. Despite the efforts of some very clever Accountancy and Legal folk, this is at best a “high risk crossing point” and more likely to be something approaching one of those films you may have seen in the past that involves check-point Charlie in days of East and West Berlin (some of us do remember them).

HMRC on target

However, in these days of better technology, I might suggest that check-point Charlie has gone one further by sending an advance text or email advising you to change course. Or to use another military film scenario – you are flying into restricted airspace and missiles are locked onto you as a target. Actually, I think that this perhaps best describes what is currently happening.

Christmas Post

HMRC have written over 1,500 letters to people who signed up for a particular tax avoidance scheme suggesting that they pull out of the scheme or face HMRC investigation. This is the sort of post that you really should open rather promptly and respond to. This is not a “file it to do later”.

Definitions – Detail is everything

However, it seems that the language about this topic is changing. Tax avoidance always has been legal and would involve using personal allowances and reliefs – such as pensions, ISAs and so on. It is interesting to note that HMRC is now referring to this as tax planning rather than tax avoidance. HMRC now define tax avoidance as bending the rules of the tax system to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce a tax advantage. It involves operating within the letter – but not the spirit – of the law“. This is an approach that seems to be heading in the direction of “guilty until proven innocent”. So please be warned – but this is precisely where expert advice is required. There are genuinely good forms of proper investment that carry tax relief or allowances. These need to be considered carefully and can be excellent ways to diversify a portfolio.

Tax Avoidance – HMRC turns on the spotlight2017-01-06T14:39:51+00:00

Tax Evasion or Avoidance

HMRC Under Pressure?

Imagine, just for a moment, that you work for the Government. You are under pressure to improve the economy and come up with the antidote to its ailing problems. You know that despite what we all may hope for, the current system is overstretched. We are spending more than we earn. The options appear stark – spend less or earn more, ideally both. However as a Government you take the lead on encouraging enterprise – hoping that some new ideas and businesses last long enough to generate jobs and wealth. Tax is the only method of earning – unless you opt for making State owned assets available for private hire outright  ownership.

HMRC investigating 41,000 tax avoidance schemes

Now you learn that HMRC are investigating around 41,000 unresolved cases of possible tax evasion, currently regarded as tax avoidance strategies until a court finds in favour of the HMRC. By the way, this is worth £10bn. In the 2010/11 tax year alone, it is estimated that £5bn of the £32bn tax shortfall is due to tax avoidance schemes. Let me remind you that tax avoidance is legal, tax evasion is not. There is a blurring between the two where some very clever people design some clever investment products that attempt to exploit loopholes in tax avoidance rules, working on the assumption that this is not tax evasion. We have all heard of the higher profile celebrity cases.

Smoke and mirrors

You are a minister (or aid/adviser) seeking to produce the tool that seems to elude everyone else, you are probably thinking that this looks like a potential goldmine. The sums look good – just get HMRC to resolve the cases and collect £10bn. You know however, that the law makes tax avoidance legal.

Avoiding Allowed

You may have gathered that I am somewhat suspicious that the confusion between avoidance and evasion by members of Parliament and within the media. This seems to have taken a direction into guilty until proven innocent. Let me be clear – tax avoidance is use of the current rules, set down by Parliament in order to help individuals and businesses arrange their affairs in such a way as to minimise tax payments. This includes use of ISAs, pensions, capital gains tax allowances, the personal allowance and so on. We all have these tools at our disposal, covered by the same law.

Spot the difference

Certainly schemes that break the law need to be closed – or those that deliberately muck around with the rules to the point that you cannot determine black from white. This is tax evasion – the same as not declaring income. However it seems to me that in an attempt to appear tough and “on the side of the masses” there is currently a groundswell of rhetoric that if applied would drive a horse and carriage through the very laws that give us all our basic right to arrange our affairs as we like. So be wary of politicians and journalists that seem to blur the line between evasion and avoidance, they do so at our peril and at their self-promotion.

 

 

 

Tax Evasion or Avoidance2017-01-06T14:39:51+00:00

When Reducing Tax Backfires

Reducing Tax Backfires

Starbucks and Facebook have been in the news this week because they used a system for reducing tax which has backfired, resulting in the paltry amount of tax that they have paid to HMRC despite huge revenues. They haven’t done anything illegal. They have used the system to its advantage. This is a classic case of “when reducing tax backfires” a PR disaster. However, one has got to question that ethics of the practice, known as transfer pricing. In general it would be fair to say that transfer pricing is the tax domain of international business – and really big international business at that. The principle is actually quite fair – being able to allow costs incurred for a company that is faced with operating costs in different countries. There is a sense that this starts in a place of wanting to avoid double counting or not counting. However there is a flaw in the system – one that enables big business to effectively pick and choose where the tax is paid. Naturally any half decent business analyst would suggest finding somewhere where tax rates are very small if they exist at all. This is essentially what Starbucks and Facebook – to name just two, international businesses have done.

System overloaded with loopholes

Yes “the system” is wrong, because it is open to significant “abuse”. However, the world of tax is complicated by all countries having completely different taxes and tax rates. Not helpful. The bright sparks (and they are) at some of the top Accountancy firms get paid significant sums to help businesses avoid tax. The principles are the same as any of us using our own Accountant to help reduce our own tax bill – legitimately. So be wary of throwing stones in glass houses. Yet clearly there is something unsettling when the sums seem to stack up in favour of big business having its cake (make mine a blueberry muffin) and eating it. Tax is a civic responsibility, we don’t dance with joy when paying it, frankly because we know that so much of it is wasted on really rather daft political measures. I still advocate a single rate of tax, irrespective of what the form of income or capital gain. This would, in my opinion, reduce the loopholes and stop people doing what they can to pay as little as they can. Tax needs to be fair to both payer and payee, at the moment it isn’t fair to either, but I see little chance of this changing in the near future. However, transfer pricing rules are being reconsidered. The UN has published its thoughts within a new transfer pricing manual. So there is some hope that a greater sense of fairness might be applied. However, as I have said before, Starbucks and Facebook did nothing wrong in law. However. if you find their actions objectionable you could always use your much under-rated consumer power.

Money, Values and Ethics

Financial planning when done properly should connect your values and ethics with your finances. This is what seems so “off message” with Starbucks. However most individuals are caught in the same trap of not thinking through the bigger picture – what it is that they want or indeed how much is enough. This is something that I help clients to think about and apply to their financial plan. There are two types of people, those that do and those that don’t, so give me a call.

When Reducing Tax Backfires2017-01-06T14:39:53+00:00

Clegg’s “Emergency Wealth Tax”

2010: Fair Game – Liman
The media is full of stories that Nick Clegg is about to suggest an emergency wealth tax. The proposals seem to focus on taxing wealth rather than income. He will be outlining his thoughts next month at the LibDem annual conference (not that urgent then!). It is difficult to remain even handed when politicians come out with headline grabbing statements. Mr Clegg, as we all know has somewhat lost the shine that surrounded him during the last election, though quite how fair an assessment this really is remains to be seen. I have to admit that I tend to be pretty sceptical of most politicians, but in particular the three party leaders. All of whom purport to have “family values” yet applied for jobs whilst they have young families that would certainly require longer working hours than most of us would contemplate, removing the ego from a career is not an easy task, in politics it appears particularly difficult.
Returning to the issue at hand, a fair tax system is relative to what you believe “fair” to be. One could take the view that fair, would be everyone having the same and therefore paying the same tax, or simply a fixed sum. Alternatively fair might be paying the same proportion of income as tax (rather than the multitude of different rates of tax on different forms of income). As I have said before, there is needless complexity in the UK tax system. As a financial planner I am duty bound to help reduce tax payments, which we accept is not the same as “tax dodging”, because deep within us, we are probably of the view that our taxes are not spent wisely, much is wasted and we should be paying a lot less. The problem as I have said before is that there is an incentive to arrange your affairs in a manner that results in as little tax being paid as possible. This is true of the self-employed nanny to the large multinational. This is daft, but nobody (no politician) wants to address this basic problem. Instead they focus on how taxes will be spent (or not) and shifting the rates of tax by millimetres once a year.
There is no doubt in my mind that the system does not work well. The really wealthy tend to pay very small amounts of tax, whereas those earning between £100,000-£1m pay huge amounts of tax proportionally. I don’t profess to have all of the answers on this, except that I do firmly believe that a single rate of tax applied to all forms of income, however they are derived, would make much more sense and would be an awful lot fairer. Wouldn’t it be better to live in a country where we all felt a sense of fairness and perhaps joy in paying our taxes that contribute to the society in which we want to live…. I know, I must be dreaming.
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Clegg’s “Emergency Wealth Tax”2017-01-06T14:39:55+00:00
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