Remove all disincentives to work

By getting rid of income tax and placing the burden of taxation on purchases you can remove all the disincentives to create wealth while at the same time help those on low incomes to have more cash available for the basics of surviving. We can reduce the cost to the country by making most of the tax inspectors and collectors into income generators rather than cost centres. We already have VAT on purchases. It must be within the abilities of the clever people at the HMRC to devise a stratified system whereby more VAT is charged on luxury items and less, or even none, on basics such as food and children’s clothing.

The tax amount would be set and collected at the point at which a product first enters the market and then transferred as a net amount, rather than as a percentage of the sale price to the next customer in the chain that finishes with the end user of the product. For example, the tax should be set when the manufacturer sells the product to a wholesaler or another manufacturer that incorporates that product into theirs, or  an importer first takes delivery of the product,  The tax could be set either on the cost price of the item or the Recommended Retail Price. Where the tax is applied to a service it is set on  the value at which the service is provided to the customer, for example the labour content of a bill for plumbing or building. The tax on the products used in these instances will already have been collected.

By transferring the tax as a net amount it will reduce the need for accountants and accounts staff to act as unpaid tax collectors, reducing the amount of time they spend on calculations, or checking calculations as well as reducing the cost to companies and the economy in general. This process will reduce the amount of paperwork needed and make the collection of the tax easier and cheaper. It will reduce the amount of people involved in setting and collecting the tax. The rate at which the tax is collected can be adjusted simply and remove the need for exemptions and prevent non-domicile residents from avoiding tax.

Why is this idea important?

By getting rid of income tax and placing the burden of taxation on purchases you can remove all the disincentives to create wealth while at the same time help those on low incomes to have more cash available for the basics of surviving. We can reduce the cost to the country by making most of the tax inspectors and collectors into income generators rather than cost centres. We already have VAT on purchases. It must be within the abilities of the clever people at the HMRC to devise a stratified system whereby more VAT is charged on luxury items and less, or even none, on basics such as food and children’s clothing.

The tax amount would be set and collected at the point at which a product first enters the market and then transferred as a net amount, rather than as a percentage of the sale price to the next customer in the chain that finishes with the end user of the product. For example, the tax should be set when the manufacturer sells the product to a wholesaler or another manufacturer that incorporates that product into theirs, or  an importer first takes delivery of the product,  The tax could be set either on the cost price of the item or the Recommended Retail Price. Where the tax is applied to a service it is set on  the value at which the service is provided to the customer, for example the labour content of a bill for plumbing or building. The tax on the products used in these instances will already have been collected.

By transferring the tax as a net amount it will reduce the need for accountants and accounts staff to act as unpaid tax collectors, reducing the amount of time they spend on calculations, or checking calculations as well as reducing the cost to companies and the economy in general. This process will reduce the amount of paperwork needed and make the collection of the tax easier and cheaper. It will reduce the amount of people involved in setting and collecting the tax. The rate at which the tax is collected can be adjusted simply and remove the need for exemptions and prevent non-domicile residents from avoiding tax.

Abolish VAT

Replace the multi teared system of VAT by a single application of purchase tax to the end user.

In the present system:-

  • A company buys its plant and materials and pays VAT on sales and reclaims VAT on inputs. 
  • It sells its product and charges the wholesaler VAT and pays VAT for packing and transport and reclaims VAT it paid to the suppliers. 
  • The wholesaler charges VAT again to the retailer and reclaims the VAT on its inputs.  
  • Tthe retailer charges VAT to the consumer and reclaims the VAT it paid its suppliers.

All the layers of VAT require accounts and the VAT office has to supervise and check all these levels of accounting.

Why not replace all these multiple levels of accounting and checking by a single application of purchase tax at point of sale to consumers.  The Government receives the same amount of tax at a fraction of the administration cost and companies are relieved of the necessity to deal with a lot of unnecessary accounting.

Why is this idea important?

Replace the multi teared system of VAT by a single application of purchase tax to the end user.

In the present system:-

  • A company buys its plant and materials and pays VAT on sales and reclaims VAT on inputs. 
  • It sells its product and charges the wholesaler VAT and pays VAT for packing and transport and reclaims VAT it paid to the suppliers. 
  • The wholesaler charges VAT again to the retailer and reclaims the VAT on its inputs.  
  • Tthe retailer charges VAT to the consumer and reclaims the VAT it paid its suppliers.

All the layers of VAT require accounts and the VAT office has to supervise and check all these levels of accounting.

Why not replace all these multiple levels of accounting and checking by a single application of purchase tax at point of sale to consumers.  The Government receives the same amount of tax at a fraction of the administration cost and companies are relieved of the necessity to deal with a lot of unnecessary accounting.

Re-examination of the provisions of the Welsh Language Act

Every year, millions of pounds of taxpayers’ money are wasted in Wales as a direct consequence of the necessity to adhere strictly to the provisions of the Welsh Language Act. In my view, this Act needs to be urgently re-examined in great detail so as to ensure that this state of affairs is not allowed to continue. Let me provide three, fairly typical everyday examples of how public money is wasted unnecessarily within the Principality: (i) When Welsh local authorities wish to alter a road layout, they are obliged, as everywhere else, to announce their plans in the local press. In Wales, however, the cost of this announcement is effectively more than doubled because the advertising must be bilingual. Costs could easily be slashed by the simple expedient of adding one line to an English language advertisement stating that ‘a Welsh version of this announcement is available on request’. However, currently, this appears not to be acceptable under the terms of the Act. (ii) A voluntary organization recently wished to provide patient information leaflets on sickle cell disease in a range of Mediterranean, Middle Eastern and Asian languages. Perhaps predictably, they ran out of money before the task was complete. One of the leaflets that was however successfully produced was in Welsh (because this was an obligatory requirement of receipt of public funding), despite the fact that it is vanishingly unlikely that any Welsh-speaking sickle cell disease patient actually exists in Wales. (iii) When scientific positions at my host institution, a leading Welsh University, are advertised in the local press, one is billed for the (more than doubled) cost of obligatory bilingual advertising. This is absolutely not what my hard-earned medical research funds were supposed to be used for! Further, I estimate that my cash-strapped host institution is obliged to fork out ~£250,000 per annum for this purpose. This is at a time when cut-backs are rife and some Welsh higher education institutions may have to merge or even close. Again, a perfectly reasonable compromise would be for the advertisement to state that a Welsh language version of the text was available on request. As the Welsh Language Act stands, however, this is unacceptable. These are just three examples of senseless waste in a virtual sea of wastefulness. Principality-wide, the sums of money involved are enormous and, to my mind, constitute a fertile hunting ground for massive savings that would be almost entirely painless to administer.    

Why is this idea important?

Every year, millions of pounds of taxpayers’ money are wasted in Wales as a direct consequence of the necessity to adhere strictly to the provisions of the Welsh Language Act. In my view, this Act needs to be urgently re-examined in great detail so as to ensure that this state of affairs is not allowed to continue. Let me provide three, fairly typical everyday examples of how public money is wasted unnecessarily within the Principality: (i) When Welsh local authorities wish to alter a road layout, they are obliged, as everywhere else, to announce their plans in the local press. In Wales, however, the cost of this announcement is effectively more than doubled because the advertising must be bilingual. Costs could easily be slashed by the simple expedient of adding one line to an English language advertisement stating that ‘a Welsh version of this announcement is available on request’. However, currently, this appears not to be acceptable under the terms of the Act. (ii) A voluntary organization recently wished to provide patient information leaflets on sickle cell disease in a range of Mediterranean, Middle Eastern and Asian languages. Perhaps predictably, they ran out of money before the task was complete. One of the leaflets that was however successfully produced was in Welsh (because this was an obligatory requirement of receipt of public funding), despite the fact that it is vanishingly unlikely that any Welsh-speaking sickle cell disease patient actually exists in Wales. (iii) When scientific positions at my host institution, a leading Welsh University, are advertised in the local press, one is billed for the (more than doubled) cost of obligatory bilingual advertising. This is absolutely not what my hard-earned medical research funds were supposed to be used for! Further, I estimate that my cash-strapped host institution is obliged to fork out ~£250,000 per annum for this purpose. This is at a time when cut-backs are rife and some Welsh higher education institutions may have to merge or even close. Again, a perfectly reasonable compromise would be for the advertisement to state that a Welsh language version of the text was available on request. As the Welsh Language Act stands, however, this is unacceptable. These are just three examples of senseless waste in a virtual sea of wastefulness. Principality-wide, the sums of money involved are enormous and, to my mind, constitute a fertile hunting ground for massive savings that would be almost entirely painless to administer.