FabSwingers.com > Forums > Politics > UK Taxation
UK Taxation
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"There's Tax and Tax! But just for starters, here in France the minimum wage increases by 1.8% tomorrow, bringing it to €1,709 per month. As for Income Tax, for those earning less than €10,777 the rate will be zero; those earning between €10,777 and €27,478 will pay 11%; those earning between €27,478 and €78,570 will pay 30%; between €78,570 and €168,994 it will be 41%; above €168,994 of taxable income the rate will be 45%. A fairer system? Mind you, Government subsidies on fuel and electricity end tomorrow (and, unlike the UK, they've been passed on to the consumer in full, not "absorbed" into the companies' profits), so although we've been shielded from UK problems so far, in the New Year the shit might hit the fan!" That's quite a low starting point for tax at 10,777 and jumps high after 27,478. I would guess anyone below 27,478 would take home more than the equivalent in the UK though that is just a guess. Do they have an equivalent of NI in France on there wages?. I did not realise the energy subsidies ended tomorrow but it must be an expensive exercise for the government and tax payers | |||
"Standard income tax I think they should add in a couple of extra levels and lower the bottom one. I would suggest £12.5k - £20k at 12% £20k - £30k at 20% £30k - £50k at 30% £50k up at 40%. The two biggest problems in the UK on tax are: Self employed often don't pay the tax they should Public sector pensions are too rich and unaffordable " So increase tax on the low to middle by 3.5% Self employed you say is there a percific section you are thinking of. In construction you have CIS tax deducted at 20% on all earnings this is taken as you are payed April to April you then do a self assessment to get back your tax free allowance and expenses. So the government can have there money for over a year. | |||
"Standard income tax I think they should add in a couple of extra levels and lower the bottom one. I would suggest £12.5k - £20k at 12% £20k - £30k at 20% £30k - £50k at 30% £50k up at 40%. The two biggest problems in the UK on tax are: Self employed often don't pay the tax they should Public sector pensions are too rich and unaffordable So increase tax on the low to middle by 3.5% Self employed you say is there a percific section you are thinking of. In construction you have CIS tax deducted at 20% on all earnings this is taken as you are payed April to April you then do a self assessment to get back your tax free allowance and expenses. So the government can have there money for over a year." Not really, the average UK salary is £28k, under the above they would pay £600 less tax per year. Break even point is just above £36k. I was only using the bands as an example but the low income earners would be paying less tax. Regarding self employed, one of my mates is a decorator and he recently did some painting in my house and I paid him cash. There is no way he would declare that so I would expect a few hundred quid would not incur any tax or NI. | |||
"Someone on another thread was desperate to discuss this as a topic. So, what does everyone think? Fair, unfair, can it be improved? Full your boots." Fair on PAYE Unfair on pretty much everything else, such as stamp duty land tax, inheritance tax, fuel duty, alcohol taxes, capital gains. It can feel like take, take, take at certain points in life... | |||
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"Standard income tax I think they should add in a couple of extra levels and lower the bottom one. I would suggest £12.5k - £20k at 12% £20k - £30k at 20% £30k - £50k at 30% £50k up at 40%. The two biggest problems in the UK on tax are: Self employed often don't pay the tax they should Public sector pensions are too rich and unaffordable So increase tax on the low to middle by 3.5% Self employed you say is there a percific section you are thinking of. In construction you have CIS tax deducted at 20% on all earnings this is taken as you are payed April to April you then do a self assessment to get back your tax free allowance and expenses. So the government can have there money for over a year." only if you work for a contractor | |||
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"Someone on another thread was desperate to discuss this as a topic. So, what does everyone think? Fair, unfair, can it be improved? Full your boots." Accepting the tribute in peanuts would be an improvement cuz I have half a bag of em tucked away in shell's.  | |||
"Standard income tax I think they should add in a couple of extra levels and lower the bottom one. I would suggest £12.5k - £20k at 12% £20k - £30k at 20% £30k - £50k at 30% £50k up at 40%. The two biggest problems in the UK on tax are: Self employed often don't pay the tax they should Public sector pensions are too rich and unaffordable So increase tax on the low to middle by 3.5% Self employed you say is there a percific section you are thinking of. In construction you have CIS tax deducted at 20% on all earnings this is taken as you are payed April to April you then do a self assessment to get back your tax free allowance and expenses. So the government can have there money for over a year. Not really, the average UK salary is £28k, under the above they would pay £600 less tax per year. Break even point is just above £36k. I was only using the bands as an example but the low income earners would be paying less tax. Regarding self employed, one of my mates is a decorator and he recently did some painting in my house and I paid him cash. There is no way he would declare that so I would expect a few hundred quid would not incur any tax or NI." Have said be for the case economy is still strong Taxis, Hair dressing, Builders, Cleaning, including, windows, even small shops, | |||
"Someone on another thread was desperate to discuss this as a topic. So, what does everyone think? Fair, unfair, can it be improved? Full your boots." Grossly unfair as it penalises families who have one medium earner and one low (or no) earner. I posted on the other thread how to improve it. | |||
"Someone on another thread was desperate to discuss this as a topic. So, what does everyone think? Fair, unfair, can it be improved? Full your boots. Grossly unfair as it penalises families who have one medium earner and one low (or no) earner. I posted on the other thread how to improve it." I agree with this. A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!! | |||
"Standard income tax I think they should add in a couple of extra levels and lower the bottom one. I would suggest £12.5k - £20k at 12% £20k - £30k at 20% £30k - £50k at 30% £50k up at 40%. The two biggest problems in the UK on tax are: Self employed often don't pay the tax they should Public sector pensions are too rich and unaffordable " A race to the bottom helps nobody | |||
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"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK." I'm with you on the simplicity of this model. I'd make every company or SE individual need a licence to trade, regardless of where they're registered and any business must be carried out under said licence and tax paid on that (hope this makes senee) | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK." The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above." I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. | |||
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"So how about doing away with income tax all together and putting it all on VAT You keep what you earn. Pay Morgage Rent Then 40% tax on what you spend.. " Interesting concept. It would kill tourism. Would you add VAT on houses? | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all." Married should be the only thing that counts for sharing household tax allowance. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. Married should be the only thing that counts for sharing household tax allowance." Why? Not disagreeing just curious! Personally I do not think there should be a household tax allowance (as per points above) as it creates complexity and administrative burden. It should be focused on the individual and all forms of income. | |||
"So how about doing away with income tax all together and putting it all on VAT You keep what you earn. Pay Morgage Rent Then 40% tax on what you spend.. Interesting concept. It would kill tourism. Would you add VAT on houses?" Property no as there is tax all ready in place Stamp duty. Tourist could as they can now climb it back as We can when shoping over seas. | |||
"So how about doing away with income tax all together and putting it all on VAT You keep what you earn. Pay Morgage Rent Then 40% tax on what you spend.. Interesting concept. It would kill tourism. Would you add VAT on houses? Property no as there is tax all ready in place Stamp duty. Tourist could as they can now climb it back as We can when shoping over seas." Would you apply it to food or essential products? Utilities? If so surely that disproportionately impacts low income people? | |||
"So how about doing away with income tax all together and putting it all on VAT You keep what you earn. Pay Morgage Rent Then 40% tax on what you spend.. Interesting concept. It would kill tourism. Would you add VAT on houses? Property no as there is tax all ready in place Stamp duty. Tourist could as they can now climb it back as We can when shoping over seas. Would you apply it to food or essential products? Utilities? If so surely that disproportionately impacts low income people? " P.S. but if you are being radical why not remove all other taxes inc stamp duty and replace with VAT? | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. Married should be the only thing that counts for sharing household tax allowance. Why? Not disagreeing just curious! Personally I do not think there should be a household tax allowance (as per points above) as it creates complexity and administrative burden. It should be focused on the individual and all forms of income. " Because children should be brought up in a stable family unit with two parents. One of those parents (doesn't matter which one) should be able to stay at home to look after the children for as long as necessary. Any form of individual tax allowance that is not transferrable between married partners forces people back to work too soon. Married couples living at the same address is not too difficult to administer, particularly given the savings in complexity using your (or my) proposals. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all." If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. Married should be the only thing that counts for sharing household tax allowance. Why? Not disagreeing just curious! Personally I do not think there should be a household tax allowance (as per points above) as it creates complexity and administrative burden. It should be focused on the individual and all forms of income. Because children should be brought up in a stable family unit with two parents. One of those parents (doesn't matter which one) should be able to stay at home to look after the children for as long as necessary. Any form of individual tax allowance that is not transferrable between married partners forces people back to work too soon. Married couples living at the same address is not too difficult to administer, particularly given the savings in complexity using your (or my) proposals." Again I am not disagreeing but want to probe further (kick the tyres so to speak)... What if the couple are married but either can’t have kids or choose not to have kids? Why should they benefit from favourable tax deductions? | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. Married should be the only thing that counts for sharing household tax allowance. Why? Not disagreeing just curious! Personally I do not think there should be a household tax allowance (as per points above) as it creates complexity and administrative burden. It should be focused on the individual and all forms of income. Because children should be brought up in a stable family unit with two parents. One of those parents (doesn't matter which one) should be able to stay at home to look after the children for as long as necessary. Any form of individual tax allowance that is not transferrable between married partners forces people back to work too soon. Married couples living at the same address is not too difficult to administer, particularly given the savings in complexity using your (or my) proposals. Again I am not disagreeing but want to probe further (kick the tyres so to speak)... What if the couple are married but either can’t have kids or choose not to have kids? Why should they benefit from favourable tax deductions?" Why not? They have two mouths to feed and if one earns a reasonable (but not huge) salary and the other doesn't why should they be much worse off than two earning lower individual salaries? In addition to anything else by being married and living in the same house they are helping the housing situation in the country. The trend of getting married later or not at all makes housing shortages worse. And finally, doesn't anyone deserve a prize for being (and staying) married? | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car." As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. Married should be the only thing that counts for sharing household tax allowance. Why? Not disagreeing just curious! Personally I do not think there should be a household tax allowance (as per points above) as it creates complexity and administrative burden. It should be focused on the individual and all forms of income. Because children should be brought up in a stable family unit with two parents. One of those parents (doesn't matter which one) should be able to stay at home to look after the children for as long as necessary. Any form of individual tax allowance that is not transferrable between married partners forces people back to work too soon. Married couples living at the same address is not too difficult to administer, particularly given the savings in complexity using your (or my) proposals. Again I am not disagreeing but want to probe further (kick the tyres so to speak)... What if the couple are married but either can’t have kids or choose not to have kids? Why should they benefit from favourable tax deductions? Why not? They have two mouths to feed and if one earns a reasonable (but not huge) salary and the other doesn't why should they be much worse off than two earning lower individual salaries? In addition to anything else by being married and living in the same house they are helping the housing situation in the country. The trend of getting married later or not at all makes housing shortages worse. And finally, doesn't anyone deserve a prize for being (and staying) married?" your last point made me LOL. You make good points but I doubt they would be easy to prove?
I am not buying the “two mouths to feed” argument though. Before they got married they still had two mouths to feed. I don’t agree (doesn’t mean I am right and you are wrong, just an opinion) that tax should used to reward lifestyle choices. If someone cannot afford to be married or to have kids then don’t!
UNLESS - the country needs more workers and is faced with a negative birth rate! Well in that case Govt policy might want to encourage couples to have more kids! | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. Married should be the only thing that counts for sharing household tax allowance. Why? Not disagreeing just curious! Personally I do not think there should be a household tax allowance (as per points above) as it creates complexity and administrative burden. It should be focused on the individual and all forms of income. Because children should be brought up in a stable family unit with two parents. One of those parents (doesn't matter which one) should be able to stay at home to look after the children for as long as necessary. Any form of individual tax allowance that is not transferrable between married partners forces people back to work too soon. Married couples living at the same address is not too difficult to administer, particularly given the savings in complexity using your (or my) proposals." What century do you live in that makes you think that marriage guarantees "stability"? Why should one "lazy" partner with a hobby job benefit a household income? Why should a single parent "household" not get a tax break by your logic? Why should a single person who is well paid pay more than someone in the same job who happens to be married? You pay for what you earn. No concessions. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK." This seems sensible. There will have to be allowances around (real) investment in capital and training though. Some of the complexity in the system has purpose but a simple basic framework should be the basis. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). " Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... | |||
"We pay a ludicrous amount of money in tax but don't get the services or security in return for it." You think so? Why? Healthcare for an aging population, weapons development, purchase and deployment, armed forces, Police and fire service training, equipment and pay, judiciary, civil service, every public building council's, roads, planning, environmental policing, regulation and enforcement etc. etc. etc. I wonder if most people really understand what the state provides. I'm not saying that it's achieved at a high level of efficiency, but making a blanket statement like that sounds smart but looks like a gross over-simplication. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. This seems sensible. There will have to be allowances around (real) investment in capital and training though. Some of the complexity in the system has purpose but a simple basic framework should be the basis." Agreed. Re business allowances, I could be wrong but my assumption was that gross/pre-tax profits are calculated AFTER taking account of all business operational costs and investment costs for growth. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids..." Fair enough. So you said... "“A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!”" So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. This seems sensible. There will have to be allowances around (real) investment in capital and training though. Some of the complexity in the system has purpose but a simple basic framework should be the basis. Agreed. Re business allowances, I could be wrong but my assumption was that gross/pre-tax profits are calculated AFTER taking account of all business operational costs and investment costs for growth." Those business allowances do have to be defined though and that is complexity. However, you could then apply the corporation tax as defined after that. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. This seems sensible. There will have to be allowances around (real) investment in capital and training though. Some of the complexity in the system has purpose but a simple basic framework should be the basis. Agreed. Re business allowances, I could be wrong but my assumption was that gross/pre-tax profits are calculated AFTER taking account of all business operational costs and investment costs for growth." As far as I am aware you are correct. And Dividends can only be paid after the Corporation Tax has been paid | |||
"So how about doing away with income tax all together and putting it all on VAT You keep what you earn. Pay Morgage Rent Then 40% tax on what you spend.. Interesting concept. It would kill tourism. Would you add VAT on houses? Property no as there is tax all ready in place Stamp duty. Tourist could as they can now climb it back as We can when shoping over seas. Would you apply it to food or essential products? Utilities? If so surely that disproportionately impacts low income people? " Food that is VAT free would stay that way same for children's clothes. Not sure where essential products are I think some are VAT free Some are 5% Stay as they are. May be bring in a 30% Vat on some things. Bay be a 50% on large luxury item's say over £150 / item This would mean if your going out to buy a new TV it will be 50% more expensive so might also be green in a way. | |||
"So how about doing away with income tax all together and putting it all on VAT You keep what you earn. Pay Morgage Rent Then 40% tax on what you spend.. Interesting concept. It would kill tourism. Would you add VAT on houses? Property no as there is tax all ready in place Stamp duty. Tourist could as they can now climb it back as We can when shoping over seas. Would you apply it to food or essential products? Utilities? If so surely that disproportionately impacts low income people? Food that is VAT free would stay that way same for children's clothes. Not sure where essential products are I think some are VAT free Some are 5% Stay as they are. May be bring in a 30% Vat on some things. Bay be a 50% on large luxury item's say over £150 / item This would mean if your going out to buy a new TV it will be 50% more expensive so might also be green in a way. " This is a huge problem for government. Retail spending is highly variable. PAYE and corporation tax receipts are reasonably predictable. How does a country plan its spending? | |||
"So how about doing away with income tax all together and putting it all on VAT You keep what you earn. Pay Morgage Rent Then 40% tax on what you spend.. Interesting concept. It would kill tourism. Would you add VAT on houses? Property no as there is tax all ready in place Stamp duty. Tourist could as they can now climb it back as We can when shoping over seas. Would you apply it to food or essential products? Utilities? If so surely that disproportionately impacts low income people? Food that is VAT free would stay that way same for children's clothes. Not sure where essential products are I think some are VAT free Some are 5% Stay as they are. May be bring in a 30% Vat on some things. Bay be a 50% on large luxury item's say over £150 / item This would mean if your going out to buy a new TV it will be 50% more expensive so might also be green in a way. This is a huge problem for government. Retail spending is highly variable. PAYE and corporation tax receipts are reasonably predictable. How does a country plan its spending?" Oh don't get me Rong it's not easy but it can only bace CT receipts on last year's receipts so the same would happen with VAT. And Vat is much harder to get round. | |||
"So how about doing away with income tax all together and putting it all on VAT You keep what you earn. Pay Morgage Rent Then 40% tax on what you spend.. Interesting concept. It would kill tourism. Would you add VAT on houses? Property no as there is tax all ready in place Stamp duty. Tourist could as they can now climb it back as We can when shoping over seas. Would you apply it to food or essential products? Utilities? If so surely that disproportionately impacts low income people? Food that is VAT free would stay that way same for children's clothes. Not sure where essential products are I think some are VAT free Some are 5% Stay as they are. May be bring in a 30% Vat on some things. Bay be a 50% on large luxury item's say over £150 / item This would mean if your going out to buy a new TV it will be 50% more expensive so might also be green in a way. This is a huge problem for government. Retail spending is highly variable. PAYE and corporation tax receipts are reasonably predictable. How does a country plan its spending? Oh don't get me Rong it's not easy but it can only bace CT receipts on last year's receipts so the same would happen with VAT. And Vat is much harder to get round. " Why is VAT so hard to get around? You are the one who has been saying that the cash economy is a problem. This creates more of an incentive for cash sales. Especially when we have an unguarded border with Ireland which is in a different economic zone and a largely unguarded coastline... | |||
" your last point made me LOL. You make good points but I doubt they would be easy to prove?
I am not buying the “two mouths to feed” argument though. Before they got married they still had two mouths to feed. I don’t agree (doesn’t mean I am right and you are wrong, just an opinion) that tax should used to reward lifestyle choices. If someone cannot afford to be married or to have kids then don’t!
UNLESS - the country needs more workers and is faced with a negative birth rate! Well in that case Govt policy might want to encourage couples to have more kids!"By getting married people are making a long term committment. "In sickness and in health etc.". Finances also become linked. The total household income and assets are taken into account if one partner becomes ill and tries to claim benefits or needs to pay for care. In the case of a divorce, assets are usually pooled and split, which can disproportionally affect one partner if there is a large difference in earning potential. So the anomaly is not allowing tax allowances and rates to be pooled while working. This is grossly unfair and when taken with the points above is a disincentive to get married. There may be many reasons for a disparity in salaries. One other poster here believes it is solely down to laziness however it could also be down to child (or other) caring responsibilities, health issues or qualifications. The lower (or non) earning partner may also have had their career disrupted by re-locating with the higher earner when jobs change, or could be enabling the higher earner to do a higher paid / higher stress job by providing support in the background and ensuring domestic life runs smoothly. | |||
" your last point made me LOL. You make good points but I doubt they would be easy to prove?
I am not buying the “two mouths to feed” argument though. Before they got married they still had two mouths to feed. I don’t agree (doesn’t mean I am right and you are wrong, just an opinion) that tax should used to reward lifestyle choices. If someone cannot afford to be married or to have kids then don’t!
UNLESS - the country needs more workers and is faced with a negative birth rate! Well in that case Govt policy might want to encourage couples to have more kids!
By getting married people are making a long term committment. "In sickness and in health etc.". Finances also become linked.
The total household income and assets are taken into account if one partner becomes ill and tries to claim benefits or needs to pay for care.
In the case of a divorce, assets are usually pooled and split, which can disproportionally affect one partner if there is a large difference in earning potential.
So the anomaly is not allowing tax allowances and rates to be pooled while working. This is grossly unfair and when taken with the points above is a disincentive to get married.
There may be many reasons for a disparity in salaries. One other poster here believes it is solely down to laziness however it could also be down to child (or other) caring responsibilities, health issues or qualifications. The lower (or non) earning partner may also have had their career disrupted by re-locating with the higher earner when jobs change, or could be enabling the higher earner to do a higher paid / higher stress job by providing support in the background and ensuring domestic life runs smoothly."Again really good points and I do not disagree. However, while it might benefit me (I guess there would be thresholds so possibly not) I still struggle with the idea that tax can reward or encourage lifestyle choices. It would mean people in long term cohabiting partnerships would be better off getting married. Should they be? I don’t know? What if the right to gay marriage was taken away? It might also financially lock in many more people into unhappy or abusive marriages. Saying that, it is an interesting point on how assessment for benefits treats the household assets differently. It feels very one directional. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... Fair enough. So you said... “A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!” So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion." A lot of presumptions there... Significant childcare costs are limited to the first 3 years. Some partners have the intention of going back to work but for various reasons can't. For example, a child with a disability/condition that is best managed by the parent. Perhaps the burden of care in that situation is too great for both to work? This is not a rare situation and is hardly a 'choice'... | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... Fair enough. So you said... “A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!” So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion. A lot of presumptions there... Significant childcare costs are limited to the first 3 years. Some partners have the intention of going back to work but for various reasons can't. For example, a child with a disability/condition that is best managed by the parent. Perhaps the burden of care in that situation is too great for both to work? This is not a rare situation and is hardly a 'choice'... " Ah ok I see your point. I would say that having caring responsibilities for a disabled child is not a choice someone has freely made. It is forced upon them (not a comment on love etc). So my earlier blanket “remove all allowances” needs a rethink as there will undoubtedly be some people who have a requirement for more help. In this case a “carers allowance” and in the case of the child/adult a “disability allowance”. That is only right and proper in a civilised society. But disability aside, having children is a choice. So while I can see the argument for sharing tax allowances/thresholds across a household (and it would benefit me/us unless there is some higher tax rate clawback in which case it is an administrative nonsense) what happens if that household splits or one partner dies? Does the parent who has custody of the kids lose their tax deductions? Their costs won’t reduce! | |||
" your last point made me LOL. You make good points but I doubt they would be easy to prove?
I am not buying the “two mouths to feed” argument though. Before they got married they still had two mouths to feed. I don’t agree (doesn’t mean I am right and you are wrong, just an opinion) that tax should used to reward lifestyle choices. If someone cannot afford to be married or to have kids then don’t!
UNLESS - the country needs more workers and is faced with a negative birth rate! Well in that case Govt policy might want to encourage couples to have more kids!
By getting married people are making a long term committment. "In sickness and in health etc.". Finances also become linked.
The total household income and assets are taken into account if one partner becomes ill and tries to claim benefits or needs to pay for care.
In the case of a divorce, assets are usually pooled and split, which can disproportionally affect one partner if there is a large difference in earning potential.
So the anomaly is not allowing tax allowances and rates to be pooled while working. This is grossly unfair and when taken with the points above is a disincentive to get married.
There may be many reasons for a disparity in salaries. One other poster here believes it is solely down to laziness however it could also be down to child (or other) caring responsibilities, health issues or qualifications. The lower (or non) earning partner may also have had their career disrupted by re-locating with the higher earner when jobs change, or could be enabling the higher earner to do a higher paid / higher stress job by providing support in the background and ensuring domestic life runs smoothly."Total assets and income are also taken into account for tax credit/working tax credit (or were...is it all UC now?). The £50k band for one earner for child benefit was introduced by Osbourne as it was the simplest way to do it... For child benefit, if the mother doesn't work and claims the benefits, how does HMRC know that if the father's income rises above £50k, they need to cut child benefit. There must be some linking of partner income for that. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... Fair enough. So you said... “A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!” So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion. A lot of presumptions there... Significant childcare costs are limited to the first 3 years. Some partners have the intention of going back to work but for various reasons can't. For example, a child with a disability/condition that is best managed by the parent. Perhaps the burden of care in that situation is too great for both to work? This is not a rare situation and is hardly a 'choice'... Ah ok I see your point. I would say that having caring responsibilities for a disabled child is not a choice someone has freely made. It is forced upon them (not a comment on love etc). So my earlier blanket “remove all allowances” needs a rethink as there will undoubtedly be some people who have a requirement for more help. In this case a “carers allowance” and in the case of the child/adult a “disability allowance”. That is only right and proper in a civilised society. But disability aside, having children is a choice. So while I can see the argument for sharing tax allowances/thresholds across a household (and it would benefit me/us unless there is some higher tax rate clawback in which case it is an administrative nonsense) what happens if that household splits or one partner dies? Does the parent who has custody of the kids lose their tax deductions? Their costs won’t reduce!" It is a choice...although accidents happen. In 2020 in England and Wales, there were 209,917 abortions and 681,560 live birth. Given the significant number of abortions it's clear that accidents aren't exactly rare and of those live births, many mother's will have made the decision not to terminate their accident. The 'choice' to have children is not very binary is it... As for your split / death scenario, there are many different financial scenarios for a binary answer... | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... Fair enough. So you said... “A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!” So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion. A lot of presumptions there... Significant childcare costs are limited to the first 3 years. Some partners have the intention of going back to work but for various reasons can't. For example, a child with a disability/condition that is best managed by the parent. Perhaps the burden of care in that situation is too great for both to work? This is not a rare situation and is hardly a 'choice'... Ah ok I see your point. I would say that having caring responsibilities for a disabled child is not a choice someone has freely made. It is forced upon them (not a comment on love etc). So my earlier blanket “remove all allowances” needs a rethink as there will undoubtedly be some people who have a requirement for more help. In this case a “carers allowance” and in the case of the child/adult a “disability allowance”. That is only right and proper in a civilised society. But disability aside, having children is a choice. So while I can see the argument for sharing tax allowances/thresholds across a household (and it would benefit me/us unless there is some higher tax rate clawback in which case it is an administrative nonsense) what happens if that household splits or one partner dies? Does the parent who has custody of the kids lose their tax deductions? Their costs won’t reduce! It is a choice...although accidents happen. In 2020 in England and Wales, there were 209,917 abortions and 681,560 live birth. Given the significant number of abortions it's clear that accidents aren't exactly rare and of those live births, many mother's will have made the decision not to terminate their accident. The 'choice' to have children is not very binary is it... As for your split / death scenario, there are many different financial scenarios for a binary answer..." Danger of going a bit off topic there. We are talking fairer (and I would argue therefore for simpler) taxation. It becomes harder to completely disconnect taxation from benefits/allowances when you bring in things like caring for a family member with a disability. But on the having a child thing...the high number of abortions show that many people chose not to proceed with having the child for whatever reason. The others chose to have the child (for whatever reason). So I maintain that children are a choice and if an “accident” happens then you still have a choice. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... Fair enough. So you said... “A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!” So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion. A lot of presumptions there... Significant childcare costs are limited to the first 3 years. Some partners have the intention of going back to work but for various reasons can't. For example, a child with a disability/condition that is best managed by the parent. Perhaps the burden of care in that situation is too great for both to work? This is not a rare situation and is hardly a 'choice'... Ah ok I see your point. I would say that having caring responsibilities for a disabled child is not a choice someone has freely made. It is forced upon them (not a comment on love etc). So my earlier blanket “remove all allowances” needs a rethink as there will undoubtedly be some people who have a requirement for more help. In this case a “carers allowance” and in the case of the child/adult a “disability allowance”. That is only right and proper in a civilised society. But disability aside, having children is a choice. So while I can see the argument for sharing tax allowances/thresholds across a household (and it would benefit me/us unless there is some higher tax rate clawback in which case it is an administrative nonsense) what happens if that household splits or one partner dies? Does the parent who has custody of the kids lose their tax deductions? Their costs won’t reduce! It is a choice...although accidents happen. In 2020 in England and Wales, there were 209,917 abortions and 681,560 live birth. Given the significant number of abortions it's clear that accidents aren't exactly rare and of those live births, many mother's will have made the decision not to terminate their accident. The 'choice' to have children is not very binary is it... As for your split / death scenario, there are many different financial scenarios for a binary answer... Danger of going a bit off topic there. We are talking fairer (and I would argue therefore for simpler) taxation. It becomes harder to completely disconnect taxation from benefits/allowances when you bring in things like caring for a family member with a disability. But on the having a child thing...the high number of abortions show that many people chose not to proceed with having the child for whatever reason. The others chose to have the child (for whatever reason). So I maintain that children are a choice and if an “accident” happens then you still have a choice." Child Benefit threshold was simpler to base on one income rather than both but that wasn't fairer. Therefore, I can't accept your simpler / fairer argument. In marriage (a fair one) and cohabiting partners, finances are pooled together and spent together. If one earns £50k and the other £10k, they don't split the bills equally and then enjoy the rest. If they did, there would be a lot of people going on date nights or holidays alone! Why can't taxes be applied the same way? | |||
" Danger of going a bit off topic there. We are talking fairer (and I would argue therefore for simpler) taxation. It becomes harder to completely disconnect taxation from benefits/allowances when you bring in things like caring for a family member with a disability. But on the having a child thing...the high number of abortions show that many people chose not to proceed with having the child for whatever reason. The others chose to have the child (for whatever reason). So I maintain that children are a choice and if an “accident” happens then you still have a choice." Very simplistic view there. You use the world "you" when talking about 2 individuals who have contributed to the accident... Who has the choice? The woman. So, if the male is the higher earner, they may have no choice. It is off topic I agree but your points seem to be about ease and fairness. I think in a society where couples are often treated as a single entity it's only fair to assess their income combined for taxation. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... Fair enough. So you said... “A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!” So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion. A lot of presumptions there... Significant childcare costs are limited to the first 3 years. Some partners have the intention of going back to work but for various reasons can't. For example, a child with a disability/condition that is best managed by the parent. Perhaps the burden of care in that situation is too great for both to work? This is not a rare situation and is hardly a 'choice'... Ah ok I see your point. I would say that having caring responsibilities for a disabled child is not a choice someone has freely made. It is forced upon them (not a comment on love etc). So my earlier blanket “remove all allowances” needs a rethink as there will undoubtedly be some people who have a requirement for more help. In this case a “carers allowance” and in the case of the child/adult a “disability allowance”. That is only right and proper in a civilised society. But disability aside, having children is a choice. So while I can see the argument for sharing tax allowances/thresholds across a household (and it would benefit me/us unless there is some higher tax rate clawback in which case it is an administrative nonsense) what happens if that household splits or one partner dies? Does the parent who has custody of the kids lose their tax deductions? Their costs won’t reduce! It is a choice...although accidents happen. In 2020 in England and Wales, there were 209,917 abortions and 681,560 live birth. Given the significant number of abortions it's clear that accidents aren't exactly rare and of those live births, many mother's will have made the decision not to terminate their accident. The 'choice' to have children is not very binary is it... As for your split / death scenario, there are many different financial scenarios for a binary answer... Danger of going a bit off topic there. We are talking fairer (and I would argue therefore for simpler) taxation. It becomes harder to completely disconnect taxation from benefits/allowances when you bring in things like caring for a family member with a disability. But on the having a child thing...the high number of abortions show that many people chose not to proceed with having the child for whatever reason. The others chose to have the child (for whatever reason). So I maintain that children are a choice and if an “accident” happens then you still have a choice. Child Benefit threshold was simpler to base on one income rather than both but that wasn't fairer. Therefore, I can't accept your simpler / fairer argument. In marriage (a fair one) and cohabiting partners, finances are pooled together and spent together. If one earns £50k and the other £10k, they don't split the bills equally and then enjoy the rest. If they did, there would be a lot of people going on date nights or holidays alone! Why can't taxes be applied the same way? " As per earlier posts I made in this thread, I think child benefit should either be for everyone or no-one. No clawbacks based on one partner’s income. Either way removes admin burden. Re pooled finances/taxes - Not saying they can’t but I can see an administrative burden I personally think we should not have. I keep coming back to the posts to both you and another poster re defining a household. Marriage vs cohabiting. AND as posted already, I think the issue is more to do with benefits (such as child benefit) than personal taxation. If as a couple you become worse off net after tax then don’t go for the new job or promotion (unless it is part of a short term pain for long term gain strategy). If we are looking at fairness in a relationship, then if one partner is near a threshold that crossing would see them worse off, then that partner should maintain position while the lower paid partner focuses on growing their earnings. This may be coming across slightly ideological. It isn’t. Truth is I would prefer to not pay any tax and keep all my earnings BUT the country/society I live in would be a complete anarchic mess. So I know that is not desirable. What I do believe is that the UK tax code/laws are some of the most complex in the world. Complexity creates loopholes that can be exploited leading to evasion. A simplified approach greatly removes the chances of loopholes. That means less evasion and more tax collected. I believe tax flowing in one direction is easier and cheaper to administer which will also be a benefit to Govt budgets and UK plc. Benefits for fair and valid reasons (such as a carers allowance or disability allowance) are a separate but related point. | |||
" Danger of going a bit off topic there. We are talking fairer (and I would argue therefore for simpler) taxation. It becomes harder to completely disconnect taxation from benefits/allowances when you bring in things like caring for a family member with a disability. But on the having a child thing...the high number of abortions show that many people chose not to proceed with having the child for whatever reason. The others chose to have the child (for whatever reason). So I maintain that children are a choice and if an “accident” happens then you still have a choice. Very simplistic view there. You use the world "you" when talking about 2 individuals who have contributed to the accident... Who has the choice? The woman. So, if the male is the higher earner, they may have no choice. It is off topic I agree but your points seem to be about ease and fairness. I think in a society where couples are often treated as a single entity it's only fair to assess their income combined for taxation." But then we are straying into moral questions and rights over decision making related to unborn children which probably warrants a thread all if it’s own as would “accidental pregnancy”. I’d prefer in this one to stick to tax. | |||
" Danger of going a bit off topic there. We are talking fairer (and I would argue therefore for simpler) taxation. It becomes harder to completely disconnect taxation from benefits/allowances when you bring in things like caring for a family member with a disability. But on the having a child thing...the high number of abortions show that many people chose not to proceed with having the child for whatever reason. The others chose to have the child (for whatever reason). So I maintain that children are a choice and if an “accident” happens then you still have a choice. Very simplistic view there. You use the world "you" when talking about 2 individuals who have contributed to the accident... Who has the choice? The woman. So, if the male is the higher earner, they may have no choice. It is off topic I agree but your points seem to be about ease and fairness. I think in a society where couples are often treated as a single entity it's only fair to assess their income combined for taxation. But then we are straying into moral questions and rights over decision making related to unborn children which probably warrants a thread all if it’s own as would “accidental pregnancy”. I’d prefer in this one to stick to tax." A direction you took us in by suggesting that children / returning to work is a simple choice. If we all understood the potential complications then none of us would have kids! Anyway, my final paragraph from my previous reply is my position. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... Fair enough. So you said... “A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!” So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion. A lot of presumptions there... Significant childcare costs are limited to the first 3 years. Some partners have the intention of going back to work but for various reasons can't. For example, a child with a disability/condition that is best managed by the parent. Perhaps the burden of care in that situation is too great for both to work? This is not a rare situation and is hardly a 'choice'... Ah ok I see your point. I would say that having caring responsibilities for a disabled child is not a choice someone has freely made. It is forced upon them (not a comment on love etc). So my earlier blanket “remove all allowances” needs a rethink as there will undoubtedly be some people who have a requirement for more help. In this case a “carers allowance” and in the case of the child/adult a “disability allowance”. That is only right and proper in a civilised society. But disability aside, having children is a choice. So while I can see the argument for sharing tax allowances/thresholds across a household (and it would benefit me/us unless there is some higher tax rate clawback in which case it is an administrative nonsense) what happens if that household splits or one partner dies? Does the parent who has custody of the kids lose their tax deductions? Their costs won’t reduce! It is a choice...although accidents happen. In 2020 in England and Wales, there were 209,917 abortions and 681,560 live birth. Given the significant number of abortions it's clear that accidents aren't exactly rare and of those live births, many mother's will have made the decision not to terminate their accident. The 'choice' to have children is not very binary is it... As for your split / death scenario, there are many different financial scenarios for a binary answer... Danger of going a bit off topic there. We are talking fairer (and I would argue therefore for simpler) taxation. It becomes harder to completely disconnect taxation from benefits/allowances when you bring in things like caring for a family member with a disability. But on the having a child thing...the high number of abortions show that many people chose not to proceed with having the child for whatever reason. The others chose to have the child (for whatever reason). So I maintain that children are a choice and if an “accident” happens then you still have a choice. Child Benefit threshold was simpler to base on one income rather than both but that wasn't fairer. Therefore, I can't accept your simpler / fairer argument. In marriage (a fair one) and cohabiting partners, finances are pooled together and spent together. If one earns £50k and the other £10k, they don't split the bills equally and then enjoy the rest. If they did, there would be a lot of people going on date nights or holidays alone! Why can't taxes be applied the same way? As per earlier posts I made in this thread, I think child benefit should either be for everyone or no-one. No clawbacks based on one partner’s income. Either way removes admin burden. Re pooled finances/taxes - Not saying they can’t but I can see an administrative burden I personally think we should not have. I keep coming back to the posts to both you and another poster re defining a household. Marriage vs cohabiting. AND as posted already, I think the issue is more to do with benefits (such as child benefit) than personal taxation. If as a couple you become worse off net after tax then don’t go for the new job or promotion (unless it is part of a short term pain for long term gain strategy). If we are looking at fairness in a relationship, then if one partner is near a threshold that crossing would see them worse off, then that partner should maintain position while the lower paid partner focuses on growing their earnings. This may be coming across slightly ideological. It isn’t. Truth is I would prefer to not pay any tax and keep all my earnings BUT the country/society I live in would be a complete anarchic mess. So I know that is not desirable. What I do believe is that the UK tax code/laws are some of the most complex in the world. Complexity creates loopholes that can be exploited leading to evasion. A simplified approach greatly removes the chances of loopholes. That means less evasion and more tax collected. I believe tax flowing in one direction is easier and cheaper to administer which will also be a benefit to Govt budgets and UK plc. Benefits for fair and valid reasons (such as a carers allowance or disability allowance) are a separate but related point." How is taking info HMRC already have about households with kids (regardless of marital status) going to increase the complexity to create new loopholes. I will give an example. In Scotland tax rates differ to an S is appended to employees tax code. HMRC / Employer systems will do the sums... For a married person, they apply for the Marriage Allowance using a form on HMRC site. That's simply a case providing the NI number / DOB of partner. I assume that on completion of this form, some algorithm checks the partners details, income and matches addresses based on the records HMRC have and then updates the tax code accordingly. So, there we have a married person with a tax code that has been adjusted because the partner has an income less that £12.5k All I am suggesting is that they take Partner A and Partner Bs joint income and average. So, if it was £0 and £60k, the one earning 60k would have a tax code that would result in their tax paid being the same as 2 people earning £30k. Is the current marriage allowance abused? | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... Fair enough. So you said... “A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!” So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion. A lot of presumptions there... Significant childcare costs are limited to the first 3 years. Some partners have the intention of going back to work but for various reasons can't. For example, a child with a disability/condition that is best managed by the parent. Perhaps the burden of care in that situation is too great for both to work? This is not a rare situation and is hardly a 'choice'... Ah ok I see your point. I would say that having caring responsibilities for a disabled child is not a choice someone has freely made. It is forced upon them (not a comment on love etc). So my earlier blanket “remove all allowances” needs a rethink as there will undoubtedly be some people who have a requirement for more help. In this case a “carers allowance” and in the case of the child/adult a “disability allowance”. That is only right and proper in a civilised society. But disability aside, having children is a choice. So while I can see the argument for sharing tax allowances/thresholds across a household (and it would benefit me/us unless there is some higher tax rate clawback in which case it is an administrative nonsense) what happens if that household splits or one partner dies? Does the parent who has custody of the kids lose their tax deductions? Their costs won’t reduce! It is a choice...although accidents happen. In 2020 in England and Wales, there were 209,917 abortions and 681,560 live birth. Given the significant number of abortions it's clear that accidents aren't exactly rare and of those live births, many mother's will have made the decision not to terminate their accident. The 'choice' to have children is not very binary is it... As for your split / death scenario, there are many different financial scenarios for a binary answer... Danger of going a bit off topic there. We are talking fairer (and I would argue therefore for simpler) taxation. It becomes harder to completely disconnect taxation from benefits/allowances when you bring in things like caring for a family member with a disability. But on the having a child thing...the high number of abortions show that many people chose not to proceed with having the child for whatever reason. The others chose to have the child (for whatever reason). So I maintain that children are a choice and if an “accident” happens then you still have a choice. Child Benefit threshold was simpler to base on one income rather than both but that wasn't fairer. Therefore, I can't accept your simpler / fairer argument. In marriage (a fair one) and cohabiting partners, finances are pooled together and spent together. If one earns £50k and the other £10k, they don't split the bills equally and then enjoy the rest. If they did, there would be a lot of people going on date nights or holidays alone! Why can't taxes be applied the same way? As per earlier posts I made in this thread, I think child benefit should either be for everyone or no-one. No clawbacks based on one partner’s income. Either way removes admin burden. Re pooled finances/taxes - Not saying they can’t but I can see an administrative burden I personally think we should not have. I keep coming back to the posts to both you and another poster re defining a household. Marriage vs cohabiting. AND as posted already, I think the issue is more to do with benefits (such as child benefit) than personal taxation. If as a couple you become worse off net after tax then don’t go for the new job or promotion (unless it is part of a short term pain for long term gain strategy). If we are looking at fairness in a relationship, then if one partner is near a threshold that crossing would see them worse off, then that partner should maintain position while the lower paid partner focuses on growing their earnings. This may be coming across slightly ideological. It isn’t. Truth is I would prefer to not pay any tax and keep all my earnings BUT the country/society I live in would be a complete anarchic mess. So I know that is not desirable. What I do believe is that the UK tax code/laws are some of the most complex in the world. Complexity creates loopholes that can be exploited leading to evasion. A simplified approach greatly removes the chances of loopholes. That means less evasion and more tax collected. I believe tax flowing in one direction is easier and cheaper to administer which will also be a benefit to Govt budgets and UK plc. Benefits for fair and valid reasons (such as a carers allowance or disability allowance) are a separate but related point. How is taking info HMRC already have about households with kids (regardless of marital status) going to increase the complexity to create new loopholes. I will give an example. In Scotland tax rates differ to an S is appended to employees tax code. HMRC / Employer systems will do the sums... For a married person, they apply for the Marriage Allowance using a form on HMRC site. That's simply a case providing the NI number / DOB of partner. I assume that on completion of this form, some algorithm checks the partners details, income and matches addresses based on the records HMRC have and then updates the tax code accordingly. So, there we have a married person with a tax code that has been adjusted because the partner has an income less that £12.5k All I am suggesting is that they take Partner A and Partner Bs joint income and average. So, if it was £0 and £60k, the one earning 60k would have a tax code that would result in their tax paid being the same as 2 people earning £30k. Is the current marriage allowance abused?" I get that and it does sound fair when weighed against benefits or inheritance treating a couple as one but: A) Why should only married/civil partnerships receive it? What about long term cohabiters? B) Why shouldn’t people over the threshold receive it? | |||
" All I am suggesting is that they take Partner A and Partner Bs joint income and average. So, if it was £0 and £60k, the one earning 60k would have a tax code that would result in their tax paid being the same as 2 people earning £30k." That is fair and should apply to married couples. The current system is grossly unfair when couples have a disparity between incomes. The thread has wandered a bit, child benefit is useful but small beer compared with the tax inequality. Simplifying the tax system should also be a priority but removing the unfairness of individual taxation is simple and easy to implement. No government will do it though as nobody from the affected group complains loudly enough. Everyone concentrates on the "poor" whereas a couple who have one partner at the peak of their career and one earning much less are significantly worse off than two graduates. | |||
"UK Tax should be completely simplified as that removes loopholes and reduces the cottage industry that sees HMRC collect tax then pay it back. It will make administering tax easier/cheaper as well. I’m sure the % and thresholds below will need tweaking to ensure there was actually a net positive affect on the exchequer but the principles to me are as follows... Personal Tax on ALL income (salary, dividends, pension): £0-£12,000 = 0% £12,001-£24,000 = 10% £24,001-£36,000 = 20% £36,001-£48,000 = 30% £48,001-£96,000 = 40% £96,001-onwards = 50% No NI, no tax credits, no child benefit, no pension credit etc. Just IC. Corp Tax should be progressive: Profits up to £50,000 = 10% £50,001-£100,000 = 15% £100,001-£1,000,000 = 20% £1,000,001+ = 25% As SMEs are getting a tax cut they should however no longer be able to get away with paying low salaries as in work benefits are scrapped to be offset with a higher minimum salary. CT should be paid in the country that generated the revenue (no more offshore holding companies or transfer of IP/royalties to low tax regimes to reduce the profits to zero or declare a loss). Companies that are awarded public sector contracts MUST have a UK based/registered operation and pay CT on the profits from those contracts in the UK. The banding and % look good. 10% increases each band means no huge jump (like the 21p to 42p in Scotland that some people on here don't seem to understand is grossly unfair!). I do however think that income taxes should be based on household income for the reasons I pointed out above. It's unfair to hit one half of a couple with higher tax because one earns a lot more than the other as I pointed out above. I agree in principle but it is challenging to define a “household”? Do they have to be a married couple? If not then in a relationship? How do they prove that? Is it open to abuse (ie flatmates pretending to be a couple for tax purposes)? It would also amount to a tax cut for the higher rate tax payer in that household which isn’t fair on singleton higher rate tax payers. Personally I do not think the unfairness is in relation to tax banding, it is to do with the eligibility for benefits such as child benefit. The Govt created a cottage industry with the clawback if either partner is earning over £50k and yet two people can earn £49,999 each and they keep the child benefit. I say get rid of these benefits completely and that also removes the admin burden/costs. Personally I think make it all about income (as per my post that is all forms of income not just earned income). No clawback of the tax free allowance either. Just straightforward tax bands that apply to all. If a singleton is in a higher tax band then they aren't feeding other mouths, get council tax reductions and don't have all the other associated costs. Disposable income is going to be significantly higher too. It's easier to keep some household costs lower to such as gas/electricity. I understand where you are coming from but taxing individuals allows almost identical households with identical household incomes to have such different taxation. In the example I gave, we are talking a few hundred quid. It's monthly payments on a very nice car. As with the other poster, I am not disagreeing but do want to probe this further. Isn’t that a lifestyle choice? ie creating a household and living together thereby increasing costs (such as use of utilities) but having more than one income? IF we are going to give some form of allowance/benefit on the basis of a life choice then why should that subsequently be clawed back if your income increases and you reach a certain threshold? If we are going to continue to give allowances then give them to all or to none. I may be missing your point though? My two biggest bugbears are the clawback of child benefit and the clawback of the tax free personal allowance. I bet it costs more to administer than it collects (or is at best marginal). It is totally unnecessary and punitive and UNFAIR (purpose of thread). Before probing, perhaps focus on the example with the 2 household. Very similar lifestyle choice. Marriage and kids... Fair enough. So you said... “A couple with 2 children both earning a combined total of £60k (£30k each) in Scotland after tax/ni have a household income of £48,363 plus £1885 child benefit. Someone earning £60k and their partner not earning with 2 kids has a household income after tax/NI of £41,613 and no child benefit. They are entitled to marriage allowance assuming married which works out at £252. That's a £8,635 difference (Excluding the tax allowance). In England the figures are slightly lower. Just over a grand less tax so about 7.5k difference. That's a huge chunk of many households mortgage repayments. Grossly unfair is an understatement!!!” So one of the factors is one couple keeps child benefit and the other loses it. I agree that is grossly unfair and have said so in other posts. They should either both keep it or, IMO, we should do away with these benefits/allowances. In that scenario the second couple have chosen for one partner to not work. That is surely a choice? Presumably they are saving on childcare costs that the first couple need to pay out for? I think there will always be arguments for certain situations/set ups etc to have some allowance but IMO the fairest way is to treat everyone the same with a simplified tax regime based on income. No sharing of allowances. No in work benefits or child benefit. Just make it straightforward and easy to understand. I strongly believe it is complexity that creates exploitable loopholes and leads to tax evasion. A lot of presumptions there... Significant childcare costs are limited to the first 3 years. Some partners have the intention of going back to work but for various reasons can't. For example, a child with a disability/condition that is best managed by the parent. Perhaps the burden of care in that situation is too great for both to work? This is not a rare situation and is hardly a 'choice'... Ah ok I see your point. I would say that having caring responsibilities for a disabled child is not a choice someone has freely made. It is forced upon them (not a comment on love etc). So my earlier blanket “remove all allowances” needs a rethink as there will undoubtedly be some people who have a requirement for more help. In this case a “carers allowance” and in the case of the child/adult a “disability allowance”. That is only right and proper in a civilised society. But disability aside, having children is a choice. So while I can see the argument for sharing tax allowances/thresholds across a household (and it would benefit me/us unless there is some higher tax rate clawback in which case it is an administrative nonsense) what happens if that household splits or one partner dies? Does the parent who has custody of the kids lose their tax deductions? Their costs won’t reduce! It is a choice...although accidents happen. In 2020 in England and Wales, there were 209,917 abortions and 681,560 live birth. Given the significant number of abortions it's clear that accidents aren't exactly rare and of those live births, many mother's will have made the decision not to terminate their accident. The 'choice' to have children is not very binary is it... As for your split / death scenario, there are many different financial scenarios for a binary answer... Danger of going a bit off topic there. We are talking fairer (and I would argue therefore for simpler) taxation. It becomes harder to completely disconnect taxation from benefits/allowances when you bring in things like caring for a family member with a disability. But on the having a child thing...the high number of abortions show that many people chose not to proceed with having the child for whatever reason. The others chose to have the child (for whatever reason). So I maintain that children are a choice and if an “accident” happens then you still have a choice. Child Benefit threshold was simpler to base on one income rather than both but that wasn't fairer. Therefore, I can't accept your simpler / fairer argument. In marriage (a fair one) and cohabiting partners, finances are pooled together and spent together. If one earns £50k and the other £10k, they don't split the bills equally and then enjoy the rest. If they did, there would be a lot of people going on date nights or holidays alone! Why can't taxes be applied the same way? As per earlier posts I made in this thread, I think child benefit should either be for everyone or no-one. No clawbacks based on one partner’s income. Either way removes admin burden. Re pooled finances/taxes - Not saying they can’t but I can see an administrative burden I personally think we should not have. I keep coming back to the posts to both you and another poster re defining a household. Marriage vs cohabiting. AND as posted already, I think the issue is more to do with benefits (such as child benefit) than personal taxation. If as a couple you become worse off net after tax then don’t go for the new job or promotion (unless it is part of a short term pain for long term gain strategy). If we are looking at fairness in a relationship, then if one partner is near a threshold that crossing would see them worse off, then that partner should maintain position while the lower paid partner focuses on growing their earnings. This may be coming across slightly ideological. It isn’t. Truth is I would prefer to not pay any tax and keep all my earnings BUT the country/society I live in would be a complete anarchic mess. So I know that is not desirable. What I do believe is that the UK tax code/laws are some of the most complex in the world. Complexity creates loopholes that can be exploited leading to evasion. A simplified approach greatly removes the chances of loopholes. That means less evasion and more tax collected. I believe tax flowing in one direction is easier and cheaper to administer which will also be a benefit to Govt budgets and UK plc. Benefits for fair and valid reasons (such as a carers allowance or disability allowance) are a separate but related point. How is taking info HMRC already have about households with kids (regardless of marital status) going to increase the complexity to create new loopholes. I will give an example. In Scotland tax rates differ to an S is appended to employees tax code. HMRC / Employer systems will do the sums... For a married person, they apply for the Marriage Allowance using a form on HMRC site. That's simply a case providing the NI number / DOB of partner. I assume that on completion of this form, some algorithm checks the partners details, income and matches addresses based on the records HMRC have and then updates the tax code accordingly. So, there we have a married person with a tax code that has been adjusted because the partner has an income less that £12.5k All I am suggesting is that they take Partner A and Partner Bs joint income and average. So, if it was £0 and £60k, the one earning 60k would have a tax code that would result in their tax paid being the same as 2 people earning £30k. Is the current marriage allowance abused? I get that and it does sound fair when weighed against benefits or inheritance treating a couple as one but: A) Why should only married/civil partnerships receive it? What about long term cohabiters? B) Why shouldn’t people over the threshold receive it?" That example I provided was just based on the current marriage allowance. I didn't say that other partnerships shouldn't be entitled. They should if they live together which can be cross checked on application using NI numbers. Over the £12.5k threshold? I haven't said they shouldn't. Just used a simple example of one earning £0 and other £60k. | |||
" your last point made me LOL. You make good points but I doubt they would be easy to prove?
I am not buying the “two mouths to feed” argument though. Before they got married they still had two mouths to feed. I don’t agree (doesn’t mean I am right and you are wrong, just an opinion) that tax should used to reward lifestyle choices. If someone cannot afford to be married or to have kids then don’t!
UNLESS - the country needs more workers and is faced with a negative birth rate! Well in that case Govt policy might want to encourage couples to have more kids!
By getting married people are making a long term committment. "In sickness and in health etc.". Finances also become linked.
The total household income and assets are taken into account if one partner becomes ill and tries to claim benefits or needs to pay for care.
In the case of a divorce, assets are usually pooled and split, which can disproportionally affect one partner if there is a large difference in earning potential.
So the anomaly is not allowing tax allowances and rates to be pooled while working. This is grossly unfair and when taken with the points above is a disincentive to get married.
There may be many reasons for a disparity in salaries. One other poster here believes it is solely down to laziness however it could also be down to child (or other) caring responsibilities, health issues or qualifications. The lower (or non) earning partner may also have had their career disrupted by re-locating with the higher earner when jobs change, or could be enabling the higher earner to do a higher paid / higher stress job by providing support in the background and ensuring domestic life runs smoothly."That is a pretty anachronistic view. The divorce rate runs at 42% You think that people not married are not committed? You don't think that it's "grossly unfair" for two people doing the same job for the same pay to be taxed differently just because one is married? Do there have to be children for this to come into force or does this "commitment" to each other adequate? You don't think that it's "grossly unfair" for two people doing the same job for the same pay with children to be taxed differently just because one is married? You don't think that it's "grossly unfair" for two people doing the same job for the same pay with children to be taxed differently just because one is married and one is alone? This is 1950s logic. It's not the world today. Where I do agree with you is that having children is very expensive and not financially rational. The demographic problems that this generate are a bigger financial cost than "subsidising" children. A country without children has no future. So, I think that there is a case for doing this through the tax system below a certain threshold. This does introduce complexity, but life is complicated. | |||
"That is a pretty anachronistic view. The divorce rate runs at 42%" And why do you think this is? I can't believe people are deliberately making bad decisions so are people less tolerant, do they have unrealistic expectations, are they so busy running to keep still in the rat race that they haven't got the time to dedicate to family life, or something else? "You think that people not married are not committed?" Not necessarily but I have to ask why they don't get married. Apathy, laziness, no financial incentive? "You don't think that it's "grossly unfair" for two people doing the same job for the same pay to be taxed differently just because one is married?" No. Getting married pools many aspects of a couple's finances (particularly in ill health and divorce) so it is only fair that they should be pooled for taxation. "Do there have to be children for this to come into force or does this "commitment" to each other adequate?" Being married and cohabiting should be the only criteria. It doesn't matter whether that marriage is male / female, same sex or any other variation. Nor does it matter whether the couple have children. "You don't think that it's "grossly unfair" for two people doing the same job for the same pay with children to be taxed differently just because one is married?" No for the reasons above. "You don't think that it's "grossly unfair" for two people doing the same job for the same pay with children to be taxed differently just because one is married and one is alone?" No for the reasons above. "This is 1950s logic. It's not the world today." And why is this "world of today" better? I wouldn't say it is quite as far back as the 1950s but the high pressure 24/7 lifestyle of today is detrimental to family and relationships. Pooling tax allowances for married couples reduces some of that financial pressure. When I was growing up, sitting down for breakfast and evening meal together as a family every day was the normal way for most people. We still do this, but now it is the exception. "Where I do agree with you is that having children is very expensive and not financially rational. The demographic problems that this generate are a bigger financial cost than "subsidising" children. A country without children has no future. So, I think that there is a case for doing this through the tax system below a certain threshold. This does introduce complexity, but life is complicated. " I believe the tax system is vastly over complicated and should be simplified. Another poster is in favour of graduated banding. Personally I'd set the tax free allowance at 40 hours of minimum wage and tax the rest (wherever it came from) at a fixed all inclusive (Tax and NI) rate. I'd guess 33% but it may need to be slightly higher. No in-work benefits or other allowances at all. Income should also be pooled for married couples living at the same address. | |||
"I believe the tax system is vastly over complicated and should be simplified. Another poster is in favour of graduated banding. Personally I'd set the tax free allowance at 40 hours of minimum wage and tax the rest (wherever it came from) at a fixed all inclusive (Tax and NI) rate. I'd guess 33% but it may need to be slightly higher. No in-work benefits or other allowances at all. Income should also be pooled for married couples living at the same address." That may have been me but I don’t think I was the only one. The reason I advocate graduated (progressive) banding/thresholds is that the essential cost of living is skewed towards the first £0-£40k of income (ie rent/mortgage/utilities/food/clothes) beyond that it ceases to be about the essential things we all need to live and starts to become about luxuries (such as bigger house, nicer car, nicer clothes/food etc). It just seems fairer to me to address the proportion of income you retain that is essential for life rather than funding luxuries. Not sure I have explained that very well? As for where to set the tax free threshold...I like your idea as it has a nice simplicity to it and neatly ties together things. | |||
"I believe the tax system is vastly over complicated and should be simplified. Another poster is in favour of graduated banding. Personally I'd set the tax free allowance at 40 hours of minimum wage and tax the rest (wherever it came from) at a fixed all inclusive (Tax and NI) rate. I'd guess 33% but it may need to be slightly higher. No in-work benefits or other allowances at all. Income should also be pooled for married couples living at the same address. That may have been me but I don’t think I was the only one. The reason I advocate graduated (progressive) banding/thresholds is that the essential cost of living is skewed towards the first £0-£40k of income (ie rent/mortgage/utilities/food/clothes) beyond that it ceases to be about the essential things we all need to live and starts to become about luxuries (such as bigger house, nicer car, nicer clothes/food etc). It just seems fairer to me to address the proportion of income you retain that is essential for life rather than funding luxuries. Not sure I have explained that very well? As for where to set the tax free threshold...I like your idea as it has a nice simplicity to it and neatly ties together things." P.S. That is the same principle for why I support progressive Corporation Tax banding/thresholds. To encourage starts ups and ease initial pressure during formative years but avoiding cliff edge increases that deter from growth. | |||
"I believe the tax system is vastly over complicated and should be simplified. Another poster is in favour of graduated banding. Personally I'd set the tax free allowance at 40 hours of minimum wage and tax the rest (wherever it came from) at a fixed all inclusive (Tax and NI) rate. I'd guess 33% but it may need to be slightly higher. No in-work benefits or other allowances at all. Income should also be pooled for married couples living at the same address. That may have been me but I don’t think I was the only one. The reason I advocate graduated (progressive) banding/thresholds is that the essential cost of living is skewed towards the first £0-£40k of income (ie rent/mortgage/utilities/food/clothes) beyond that it ceases to be about the essential things we all need to live and starts to become about luxuries (such as bigger house, nicer car, nicer clothes/food etc). It just seems fairer to me to address the proportion of income you retain that is essential for life rather than funding luxuries. Not sure I have explained that very well? As for where to set the tax free threshold...I like your idea as it has a nice simplicity to it and neatly ties together things." All those cost of living expenses you quoted are much higher the bigger the household. It could be argued that therefore a single person should pay tax at a lower level because they have lower cost of living expenses. So, a single person earning £60k may pay more tax that a couple both earning £30k each but their household outgoings on essentials will be far higher. | |||
"I believe the tax system is vastly over complicated and should be simplified. Another poster is in favour of graduated banding. Personally I'd set the tax free allowance at 40 hours of minimum wage and tax the rest (wherever it came from) at a fixed all inclusive (Tax and NI) rate. I'd guess 33% but it may need to be slightly higher. No in-work benefits or other allowances at all. Income should also be pooled for married couples living at the same address. That may have been me but I don’t think I was the only one. The reason I advocate graduated (progressive) banding/thresholds is that the essential cost of living is skewed towards the first £0-£40k of income (ie rent/mortgage/utilities/food/clothes) beyond that it ceases to be about the essential things we all need to live and starts to become about luxuries (such as bigger house, nicer car, nicer clothes/food etc). It just seems fairer to me to address the proportion of income you retain that is essential for life rather than funding luxuries. Not sure I have explained that very well? As for where to set the tax free threshold...I like your idea as it has a nice simplicity to it and neatly ties together things." It was your banding I was commenting on. I agree with the essentials for life calculation which is why I have set the nil rate band so high. A married couple would therefore get about £40k tax free then keep about 2/3 of the rest. As for banding, I understand your point but all thresholds skew the system. Also, as your thresholds are lower the lowest paid would pay more tax than under my system. | |||
"That is a pretty anachronistic view. The divorce rate runs at 42% And why do you think this is? I can't believe people are deliberately making bad decisions so are people less tolerant, do they have unrealistic expectations, are they so busy running to keep still in the rat race that they haven't got the time to dedicate to family life, or something else? You think that people not married are not committed? Not necessarily but I have to ask why they don't get married. Apathy, laziness, no financial incentive? You don't think that it's "grossly unfair" for two people doing the same job for the same pay to be taxed differently just because one is married? No. Getting married pools many aspects of a couple's finances (particularly in ill health and divorce) so it is only fair that they should be pooled for taxation. Do there have to be children for this to come into force or does this "commitment" to each other adequate? Being married and cohabiting should be the only criteria. It doesn't matter whether that marriage is male / female, same sex or any other variation. Nor does it matter whether the couple have children. You don't think that it's "grossly unfair" for two people doing the same job for the same pay with children to be taxed differently just because one is married? No for the reasons above. You don't think that it's "grossly unfair" for two people doing the same job for the same pay with children to be taxed differently just because one is married and one is alone? No for the reasons above. This is 1950s logic. It's not the world today. And why is this "world of today" better? I wouldn't say it is quite as far back as the 1950s but the high pressure 24/7 lifestyle of today is detrimental to family and relationships. Pooling tax allowances for married couples reduces some of that financial pressure. When I was growing up, sitting down for breakfast and evening meal together as a family every day was the normal way for most people. We still do this, but now it is the exception. Where I do agree with you is that having children is very expensive and not financially rational. The demographic problems that this generate are a bigger financial cost than "subsidising" children. A country without children has no future. So, I think that there is a case for doing this through the tax system below a certain threshold. This does introduce complexity, but life is complicated. I believe the tax system is vastly over complicated and should be simplified. Another poster is in favour of graduated banding. Personally I'd set the tax free allowance at 40 hours of minimum wage and tax the rest (wherever it came from) at a fixed all inclusive (Tax and NI) rate. I'd guess 33% but it may need to be slightly higher. No in-work benefits or other allowances at all. Income should also be pooled for married couples living at the same address." Your answers now make this look like using tax as a pretext to impose a particular moral perspective. You think that financial incentives are a good way to "fix" a dysfunctional marriage or that those not married cannot be committed to each other? You think that a tax incentive will magically make lives less busy or have people sit down to meals together? With what justification? I am surprised that you feel that it is "fair" for two people doing the same job at the same salary to be taxed differently because one is married. I see no justification for this whatsoever. I also see no justification why somebody who's partner walked out on them or died to be financially penalised. You can. If you actually want to be fair then that requires a universal basic income due to everyone. The marriage discussion looks like an attempt at "good old days" social engineering. The "good old days" were no better for many people than they are today in other ways. | |||
"I believe the tax system is vastly over complicated and should be simplified. Another poster is in favour of graduated banding. Personally I'd set the tax free allowance at 40 hours of minimum wage and tax the rest (wherever it came from) at a fixed all inclusive (Tax and NI) rate. I'd guess 33% but it may need to be slightly higher. No in-work benefits or other allowances at all. Income should also be pooled for married couples living at the same address. That may have been me but I don’t think I was the only one. The reason I advocate graduated (progressive) banding/thresholds is that the essential cost of living is skewed towards the first £0-£40k of income (ie rent/mortgage/utilities/food/clothes) beyond that it ceases to be about the essential things we all need to live and starts to become about luxuries (such as bigger house, nicer car, nicer clothes/food etc). It just seems fairer to me to address the proportion of income you retain that is essential for life rather than funding luxuries. Not sure I have explained that very well? As for where to set the tax free threshold...I like your idea as it has a nice simplicity to it and neatly ties together things. It was your banding I was commenting on. I agree with the essentials for life calculation which is why I have set the nil rate band so high. A married couple would therefore get about £40k tax free then keep about 2/3 of the rest. As for banding, I understand your point but all thresholds skew the system. Also, as your thresholds are lower the lowest paid would pay more tax than under my system." Comparisons would need some calculations undertaken to really understand the merits of any idea. I haven’t the time for anything more than a cursory mental calc. However, I reckon total tax take under your approach would be less leaving the country with a big deficit. It would require scaling back of public services. But which ones? It is generally agreed that the poorer you are, the more you rely on public services, so a smaller tax take impacts the poor disproportionately. As an individual I would be significantly better off under your blanket 33% approach over £40k (which is tax free) but I think the impact on society would be huge. I also think for those of us who benefit from that lower tax may end up seeing it swallowed up by increased private sector fees as they step into the breech vacated by the reducing public services (ie private healthcare etc). Also a slow/graduated increase in banding avoids a cliff wall. | |||
