Time to completely overhaul out Tax system

[truman]

He said -

 

 

 

But we still have the same issue, what about someone that is an international traveller, and earns income in various countries, they will just choose the country with the lowest taxes.

 

I meant stuff like corporation tax etcetc..

[carosio]

Back on topic:

HMG could try an alternative approach. Set-up a Royal Commission to review/redesign the entire UK tax system.

For instance, it could suggest abolishing all existing taxes and tax reliefs. Instead, there might be just these three:

1. EST- Earned salary tax: fixed rate of 25% on all earned income that exceeds NMW.

2. IIT- Investment income tax: fixed rate of 25% on the lot.

3. GPT- Goods purchase tax: fixed rate of 20%.

 

But what happens with my ISA from which I get hardly any income?

[Cyclone]

Back on topic:

HMG could try an alternative approach. Set-up a Royal Commission to review/redesign the entire UK tax system.

For instance, it could suggest abolishing all existing taxes and tax reliefs. Instead, there might be just these three:

1. EST- Earned salary tax: fixed rate of 25% on all earned income that exceeds NMW.

2. IIT- Investment income tax: fixed rate of 25% on the lot.

3. GPT- Goods purchase tax: fixed rate of 20%.

 

So a totally non progressive system, is there some reason you hate the poor?

 

Does dividend from personal services company count as investment income?

 

---------- Post added 31-05-2018 at 09:04 ----------

 

He said -

 

 

 

But we still have the same issue, what about someone that is an international traveller, and earns income in various countries, they will just choose the country with the lowest taxes.

 

There's basically nothing you can do about that, if they have companies in different countries through which the work is done, there is nothing that another state, outside that country, can do to claim tax against that country.

Although they have to ensure that they aren't resident in this country, or things change.

[L00b]

But we still have the same issue, what about someone that is an international traveller, and earns income in various countries, they will just choose the country with the lowest taxes.

This is already catered for by a multitude of bilateral agreements between (most) countries. That international traveller has to be resident in the lowest taxation country to qualify for that country’s tax regime-and depending on the country and the agreement’s specifics, even that might not work out ‘best’.

 

E.g. here, a border worker residing in France & working in Luxembourg gets income taxed at source in Luxembourg (lower income tax) but pays a differential to the French tax office, plus other local French direct & indirect taxes. There is no real taxation advantage, the advantages are better pay in Lux for the same job, better pension rights and better social/healthcare cover.

Edited May 31, 2018 by L00b

[Jeffrey Shaw]

Where does any company tax come in to this?

It doesn't, because I'd consider that profit retained undistributed should be untaxed until realised in the hands of the beneficiary.

 

---------- Post added 31-05-2018 at 17:21 ----------

 

But what happens with my ISA from which I get hardly any income?

To keep tax rates low, I'd abolish most (if not all) allowances, deductions, and lawful avoidance schemes.

 

---------- Post added 31-05-2018 at 17:22 ----------

 

So a totally non progressive system, is there some reason you hate the poor?

Except that I don't. I've never understood why someone earning less than NMW should have to pay income tax.

[truman]

It doesn't, because I'd consider that profit retained undistributed should be untaxed until realised in the hands of the beneficiary.

 

So would dividends come under item 2 of your list above? Wouldn't this create a tax shortfall if you're not taxing companies?

[Jeffrey Shaw]

So would dividends come under item 2 of your list above?

Yes.

Wouldn't this create a tax shortfall if you're not taxing companies?

I've no idea. Any overhaul should be designed to be revenue-neutral.

[Anna B]

This is already catered for by a multitude of bilateral agreements between (most) countries. That international traveller has to be resident in the lowest taxation country to qualify for that country’s tax regime-and depending on the country and the agreement’s specifics, even that might not work out ‘best’.

 

E.g. here, a border worker residing in France & working in Luxembourg gets income taxed at source in Luxembourg (lower income tax) but pays a differential to the French tax office, plus other local French direct & indirect taxes. There is no real taxation advantage, the advantages are better pay in Lux for the same job, better pension rights and better social/healthcare cover.

 

Which is why London is stuffed with empty houses belonging to the rich and famous, like absent Russian Oligarchs etc.

[L00b]

Which is why London is stuffed with empty houses belonging to the rich and famous, like absent Russian Oligarchs etc.

Owning a house in a country does not equal residency status in that country.

 

I've owned a large house in France for decades. Yet I've spent 2 to 3 weeks there a year at the most, and haven't paid a penny of income tax in France for as long.

 

For most countries and under most double-taxation agreements, it's majority time spent in a country out of a full year. Spend 183 days in country A and 182 in country B out of a year, and your residency and liability for taxation purposes is in country A, not country B.

 

Facts, Anna, facts. Not emotions.

Edited May 31, 2018 by L00b

[Cyclone]

It doesn't, because I'd consider that profit retained undistributed should be untaxed until realised in the hands of the beneficiary.

 

---------- Post added 31-05-2018 at 17:21 ----------

 

To keep tax rates low, I'd abolish most (if not all) allowances, deductions, and lawful avoidance schemes.

 

---------- Post added 31-05-2018 at 17:22 ----------

 

Except that I don't. I've never understood why someone earning less than NMW should have to pay income tax.

 

You suggested a flat rate tax scheme with a tax allowance of approx £15k.

It's hugely regressive after that allowance is exhausted.

Either you hate the poor, or you don't understand what you're suggesting.

 

---------- Post added 01-06-2018 at 07:39 ----------

 

It doesn't, because I'd consider that profit retained undistributed should be untaxed until realised in the hands of the beneficiary

 

Awesome, starbucks have no need to dodge tax through Ireland and Luxembourg now, you've just declared profit tax free in the UK when it's subsequently sent to it's US owners... Or indeed paid out to shareholders anywhere in the world except the UK.

And you've just removed 40% of the UK government income, with the majority of that never to be reclaimed.