Changes to personal taxation

[sgtkate]

If we tax imports then everyone will tax our exports.

If we only tax purchases and not income, the tax would have to be massive to compensate.

 

People would not spend as much. People with the ability. I.e. the rich (who pay most of the tax that is collected currently) would earn their money in the UK and go spend it elsewhere.

 

It's not a very good idea.

 

Quoted you but also replying to TheNugget as point were similar. I'm talking about personal imports only, not business ones. We currently have different taxation rules for business and personal imports so lets extend that. Business imports on goods for resale do not have to have the same import taxes on items for personal usage. I'm not trying to bugger businesses here, simply close personal tax loopholes.

 

The part about the rich earning money in the UK but spending it elsewhere...how would they do that? To earn money here they'd need to be living here for starters. If they live here then they will need to buy things to exist here and then they pay tax. Or if they actually do live abroad but work for a UK company, then their country of residence is responsible for their taxation anyway similar to how it is now in that non-residents of the UK working for UK based companies being paid in pounds under the companies PAYE scheme are not taxed by the UK but will more than likely be taxed by their resident country.

 

With that in mind, does it still not work?

[Supertramp]

Quoted you but also replying to TheNugget as point were similar. I'm talking about personal imports only, not business ones. We currently have different taxation rules for business and personal imports so lets extend that. Business imports on goods for resale do not have to have the same import taxes on items for personal usage. I'm not trying to bugger businesses here, simply close personal tax loopholes.

 

The part about the rich earning money in the UK but spending it elsewhere...how would they do that? To earn money here they'd need to be living here for starters. If they live here then they will need to buy things to exist here and then they pay tax. Or if they actually do live abroad but work for a UK company, then their country of residence is responsible for their taxation anyway similar to how it is now in that non-residents of the UK working for UK based companies being paid in pounds under the companies PAYE scheme are not taxed by the UK but will more than likely be taxed by their resident country.

 

With that in mind, does it still not work?

 

Rich people don't PAYE generally. Personal tax loophole effects are tiny compared to businesses avoiding tax.

[sgtkate]

Rich people don't PAYE generally. Personal tax loophole effects are tiny compared to businesses avoiding tax.

 

That's exactly why I'm having this discussion BECAUSE rich people don't pay PAYE! If we move it from PAYE to purchase tax then they' have to pay it.

 

And yes business tax most definitely needs overhauling but I don't have enough knowledge around it to come up with a nice simplistic idea like this one for personal tax. Be good if someone does?

[Obelix]

That's exactly why I'm having this discussion BECAUSE rich people don't pay PAYE! If we move it from PAYE to purchase tax then they' have to pay it.

 

And yes business tax most definitely needs overhauling but I don't have enough knowledge around it to come up with a nice simplistic idea like this one for personal tax. Be good if someone does?

 

What on earth gives you the idea that they dont pay PAYE? That catches everyone.

[sgtkate]

What on earth gives you the idea that they dont pay PAYE? That catches everyone.

 

Only those who have an income would pay it. If you are living off savings or share dividends etc then you wouldn't be paying PAYE. I would like to find a way to target those people who try to avoid tax in this way by 'hiding' that money offshore. Perhaps the problem is actually so low it's not worth bothering with? No point changing anything if the tax gains aren't worth the cost of the change!

[Supertramp]

That's exactly why I'm having this discussion BECAUSE rich people don't pay PAYE! If we move it from PAYE to purchase tax then they' have to pay it.

 

And yes business tax most definitely needs overhauling but I don't have enough knowledge around it to come up with a nice simplistic idea like this one for personal tax. Be good if someone does?

 

No they don't have to spend it here. They save it until a more sympathetic govt comes in to power or they live elsewhere and still continue to earn money from the UK through whatever means they currently do.

 

Theres pretty much nothing wrong with personal tax works now. Individual/personal tax avoidance costs something like £4billion in lost revenue which is a drop in the ocean compared to how much tax is taken in. Some loopholes need to be closed and I think may have been - Shell trusts (Jimmy Carr).

 

People buying dodgy fags and booze loses something like 3 times that much in revenue. The massive international corporations who shift profits from the UK elsewhere to avoid paying tax (legally) costs an estimated £112 billion in lost revenue.

[sgtkate]

No they don't have to spend it here. They save it until a more sympathetic govt comes in to power or they live elsewhere and still continue to earn money from the UK through whatever means they currently do.

 

Theres pretty much nothing wrong with personal tax works now. Individual/personal tax avoidance costs something like £4billion in lost revenue which is a drop in the ocean compared to how much tax is taken in. Some loopholes need to be closed and I think may have been - Shell trusts (Jimmy Carr).

 

People buying dodgy fags and booze loses something like 3 times that much in revenue. The massive international corporations who shift profits from the UK elsewhere to avoid paying tax (legally) costs an estimated £112 billion in lost revenue.

 

Fair enough. As I say I'm not advocating changing things to make it penalising, I'm simply interested in how we can maximise tax revenues fairly, and perhaps I felt this was a bigger issue than it actually was. You are totally right that £4b is indeed pocket change. And we totally should find ways to lock down business profit dodging games.

[El Cid]

Taxing earnings seems pretty reasonable to me, I see no benefit with changing it. Sales taxes are generally regressive and hit poorer people harder.

 

How much tax do you pay on your earnings?

 

Perhaps you are a basic rate tax payer(20%), a few thousand maybe; would you feel the same way if you were paying 45% and more than £50,000?

 

---------- Post added 19-05-2017 at 09:35 ----------

 

I'm not sure what you're trying to say.

 

I thought the point was clear.

 

The UK raises at least £3 billion in import tariffs, and the talk about free trade and leaving the EU.

Once we leave and our free trade obsessed Government can commit to 100% free trade, where will that £3 billion come from?

 

Will they do more cuts, they haven't committed to no income tax and NI increases. Assuming the Tories get elected, of course.

 

Lets have a few more tariffs, to pay for childrens free school dinners.

[TheNugget]

How much tax do you pay on your earnings?

 

Perhaps you are a basic rate tax payer(20%), a few thousand maybe; would you feel the same way if you were paying 45% and more than £50,000?

 

I pay 20% of my earnings up to the 40% threshold and then 40% after that, same as everyone else.

I pay a substantial amount in tax - enough to pay benefits to a number of households that contribute nothing.

[Obelix]

Only those who have an income would pay it. If you are living off savings or share dividends etc then you wouldn't be paying PAYE. I would like to find a way to target those people who try to avoid tax in this way by 'hiding' that money offshore. Perhaps the problem is actually so low it's not worth bothering with? No point changing anything if the tax gains aren't worth the cost of the change!

 

The assumption always seems to be that "rich" people are laughing having paid no tax at all when this simply isn't the case. Yes there are ways of minimising the tax paid but it's still a very large part of their total income however it comes.

 

As for "hiding" money offshore - most people don't hide it - they are perfectly open about where it is. If you want to bring that money onshore you will pay tax at that point - if you are going to buy someone offshore then theres no point in bringing it onshore and paying tax and then faffing about with a rebate claim to get it back when it goes back offshore again.