Scrap VAT exemption

Scrap VAT exemption.  For everyone, every organisation.  Because many more people and organisations would pay it, it would be able to be reduced.  Probably to single figures.

Many SMEs spend a lot of time figuring it out (for those who do not know, business people consider VAT a way of making commerce collect taxes for the government).

Prices to the consumer would probably not change – just be differently built up – as the firms supplying retialers and supply chains would have to charge slightly more to cover the tax they would now pay, instead of andlessly doing the run-around to avoid it, adding it up every quarter etc.

Value Added Tax whatever it's purpose, applies no less to firms supplying firms than to retailers supplying end consumers.

Because it would be so much lower, it would no longer be thought unfair to apply it to everything, objections ought to be weakened eg about gas being taxed with VAT.

I rather suspect that in the end, VAT is a way of making 'normal' people subsidise the lucky few who benefit from not paying it too.

VAT evasion would be a thing of the past.  Second hand cars would be VAT-able, everything, no question.

It is a purchase tax, in all but name.  Many other countries have it, why not just make it dead simple.  Avoidance would be impossible – 'How much for cash mate?' would be obsolete.

My guess is, it ought to be 10% across the board, for everything bought and sold, used or new.  Ebay would have to pay, everyone would.  It's a doddle to work out at 10% as well!

best regards,

Ian Margetts, West Yorkshire.

Why is this idea important?

Scrap VAT exemption.  For everyone, every organisation.  Because many more people and organisations would pay it, it would be able to be reduced.  Probably to single figures.

Many SMEs spend a lot of time figuring it out (for those who do not know, business people consider VAT a way of making commerce collect taxes for the government).

Prices to the consumer would probably not change – just be differently built up – as the firms supplying retialers and supply chains would have to charge slightly more to cover the tax they would now pay, instead of andlessly doing the run-around to avoid it, adding it up every quarter etc.

Value Added Tax whatever it's purpose, applies no less to firms supplying firms than to retailers supplying end consumers.

Because it would be so much lower, it would no longer be thought unfair to apply it to everything, objections ought to be weakened eg about gas being taxed with VAT.

I rather suspect that in the end, VAT is a way of making 'normal' people subsidise the lucky few who benefit from not paying it too.

VAT evasion would be a thing of the past.  Second hand cars would be VAT-able, everything, no question.

It is a purchase tax, in all but name.  Many other countries have it, why not just make it dead simple.  Avoidance would be impossible – 'How much for cash mate?' would be obsolete.

My guess is, it ought to be 10% across the board, for everything bought and sold, used or new.  Ebay would have to pay, everyone would.  It's a doddle to work out at 10% as well!

best regards,

Ian Margetts, West Yorkshire.

Impose National Insurance on Dividends

Many companies pay their owners / directors in dividends(assuming the directors are shareholders in many companies either because they are closed companies or get share options. No National Insurance is paid on the dividends albeit it is naturally income. Repeal this tax break to increase revenue and decrease inequality of treatment of income.

Why is this idea important?

Many companies pay their owners / directors in dividends(assuming the directors are shareholders in many companies either because they are closed companies or get share options. No National Insurance is paid on the dividends albeit it is naturally income. Repeal this tax break to increase revenue and decrease inequality of treatment of income.

Remove all benefit in kind perks

This is costing the normal taxpayer millions in uncollected tax and the few that benefit don't need the perks paid for by the company – I am referring to for instance companies having sailing boats or holiday homes which supposedly should be accessible by all in the company but in reality are used by directors or one man band companies. The cost to the tax payer is under taxation of the companies involved and a great amount of paperwork and impossible policing by Customs & Revenue. 

Why is this idea important?

This is costing the normal taxpayer millions in uncollected tax and the few that benefit don't need the perks paid for by the company – I am referring to for instance companies having sailing boats or holiday homes which supposedly should be accessible by all in the company but in reality are used by directors or one man band companies. The cost to the tax payer is under taxation of the companies involved and a great amount of paperwork and impossible policing by Customs & Revenue. 

Extend VAT relief to the repair and maintenance of listed buildings

Owners of listed buildings are currently entitled to VAT relief on any expenditure that relates to material alterations to their properties – but anything they spend on maintenance, or on replacement of like with like, is still subject to VAT.  

I propose that the VAT relief should be extended to maintenance costs.

Why is this idea important?

Owners of listed buildings are currently entitled to VAT relief on any expenditure that relates to material alterations to their properties – but anything they spend on maintenance, or on replacement of like with like, is still subject to VAT.  

I propose that the VAT relief should be extended to maintenance costs.

One version only of Small Company Accounts

The Companies House website has a very helpful Small Company Accounts template to enable web filing giving the minimum disclosure required by the Companies Act. This year HMRC (Corporation Tax) have started rejecting these abbreviated accounts and asking for a Directors' Report to be included in them. Most small companies (who have never been asked for this before) will have completed their accounts, adopted them at an AGM and sent them off to Companies House for filing before sending them to HMRC. The Directors Report, if included, is an integral part of the accounts, not just a page that can be added later.

Please can these two government departments get their act together to avoid this rediculous and time-consuming re-work for those in small companies who have enough legislation to keep up with at the best of times?

Why is this idea important?

The Companies House website has a very helpful Small Company Accounts template to enable web filing giving the minimum disclosure required by the Companies Act. This year HMRC (Corporation Tax) have started rejecting these abbreviated accounts and asking for a Directors' Report to be included in them. Most small companies (who have never been asked for this before) will have completed their accounts, adopted them at an AGM and sent them off to Companies House for filing before sending them to HMRC. The Directors Report, if included, is an integral part of the accounts, not just a page that can be added later.

Please can these two government departments get their act together to avoid this rediculous and time-consuming re-work for those in small companies who have enough legislation to keep up with at the best of times?

Harmonisation of tax year and budget changes

The tax year should start at the beginning of the year, January 1st, and all changes to tax rates, NI etc. take place at exactly the same time. No changes during the year.

Why is this idea important?

The tax year should start at the beginning of the year, January 1st, and all changes to tax rates, NI etc. take place at exactly the same time. No changes during the year.

VAT

Voluntary Sector organisations pay VAT unless they sell products or services, often through a shop. Local authority education departments seem to be VAT exempt which can give unfair advantage to local authorities.

VAT returns are onerous, and often stop smaller charities registering, unless they are fortunate to afford the services of an accountant.  If charities could be registered with a VAT exemption number which would be quoted to suppliers, then the VAT burden could be removed helping small and medium sized charities to be more competitive in pricing  of their services.

Why is this idea important?

Voluntary Sector organisations pay VAT unless they sell products or services, often through a shop. Local authority education departments seem to be VAT exempt which can give unfair advantage to local authorities.

VAT returns are onerous, and often stop smaller charities registering, unless they are fortunate to afford the services of an accountant.  If charities could be registered with a VAT exemption number which would be quoted to suppliers, then the VAT burden could be removed helping small and medium sized charities to be more competitive in pricing  of their services.

Reform of the unfair method used to calculate assumed income applied to savings

For claimants on means tested benefits there is a threshold beyond which savings effect allowance.  This begins at £6,000.  The maximum allowed is £16,000.  Regardless of how much money is actually received, the assumed income from savings is calculated at £1 a week for every £250 (or part thereof) of capital above the £6,000 lower threshold or £2 for anyone on pension credit.  This gives a notional interest rate of 20.8% for anyone not entitled to pension credit.  When has any bank ever paid an interest rate of 20%?  On the upper limit of savings this would give net annual income from interest of £3328 or £64 a week on the full £16,000 or £2080 (£40/week) on the £10,000.

OK there comes a point where savings are of such a level that interest payments go way beyond the benefit entitlement.  And the goverment is not in the business of providing a legacy but it doesn't take very long to get through £10,000 at today's prices and they are, in effect, willing to pay in retrospect for the spendthrift's foreign holidays and sky TV channels.  Why then punish those who have made the effort?

I know that it isn't that long since the figures were revised but that revision didn't go far enough.  There needs to be better correlation between actual and assumed income.  The problem of basing the calculation on actual income would come, of course, from the various and variable interest rates available.  However, using the basic (or even the highest) rate paid by the National Savings Bank – or even the highest paid by the high street banks (currently 6% for the top ISA) as of the beginning of the financial year, would at least allow those responsible citizens gleen some benefit from their husbandry.

Why is this idea important?

For claimants on means tested benefits there is a threshold beyond which savings effect allowance.  This begins at £6,000.  The maximum allowed is £16,000.  Regardless of how much money is actually received, the assumed income from savings is calculated at £1 a week for every £250 (or part thereof) of capital above the £6,000 lower threshold or £2 for anyone on pension credit.  This gives a notional interest rate of 20.8% for anyone not entitled to pension credit.  When has any bank ever paid an interest rate of 20%?  On the upper limit of savings this would give net annual income from interest of £3328 or £64 a week on the full £16,000 or £2080 (£40/week) on the £10,000.

OK there comes a point where savings are of such a level that interest payments go way beyond the benefit entitlement.  And the goverment is not in the business of providing a legacy but it doesn't take very long to get through £10,000 at today's prices and they are, in effect, willing to pay in retrospect for the spendthrift's foreign holidays and sky TV channels.  Why then punish those who have made the effort?

I know that it isn't that long since the figures were revised but that revision didn't go far enough.  There needs to be better correlation between actual and assumed income.  The problem of basing the calculation on actual income would come, of course, from the various and variable interest rates available.  However, using the basic (or even the highest) rate paid by the National Savings Bank – or even the highest paid by the high street banks (currently 6% for the top ISA) as of the beginning of the financial year, would at least allow those responsible citizens gleen some benefit from their husbandry.

Stop paying child tax credits for children who do not live in this country.

I suggest the Government immediately stop paying child tax credits for children who do not live in this country.

If a person comes to the UK from another country and they claim they have e.g. 10 children who still live in his home country then the Government pays out tax credits for each of the 10 children. Even though they are not and have never been in this country. They may not even exist, how can we check?? 

we cannot afford to pay for children who are in this country so we should not be paying for children who do not live here. They are not our responsibility.

This is not xenophobia but simple basic economics.

Why is this idea important?

I suggest the Government immediately stop paying child tax credits for children who do not live in this country.

If a person comes to the UK from another country and they claim they have e.g. 10 children who still live in his home country then the Government pays out tax credits for each of the 10 children. Even though they are not and have never been in this country. They may not even exist, how can we check?? 

we cannot afford to pay for children who are in this country so we should not be paying for children who do not live here. They are not our responsibility.

This is not xenophobia but simple basic economics.

Revenue raised from speed cameras and parking fines

Direct all revenue raised from speed cameras and parking fines to the National Trust.

(Insert your favoured organistion if you think stately homes / castles dont need our attention)

My idea stands whether you say 'Help for Heroes' or 'Sport England' etc.

We could indeed split the revenue between 20 organisations, such is the magnitude of the sums involved!

Why is this idea important?

Direct all revenue raised from speed cameras and parking fines to the National Trust.

(Insert your favoured organistion if you think stately homes / castles dont need our attention)

My idea stands whether you say 'Help for Heroes' or 'Sport England' etc.

We could indeed split the revenue between 20 organisations, such is the magnitude of the sums involved!

Reduce CIS Tax Administration Burden on Construction Industry

I spend considerable amounts of time administering CIS deductions on behalf of HMRC every month – checking verifications, deducting tax, paying tax over, recording submissions, issuing tax certificates of deduction, entering returns as well as maintaining our own tax gross status. Why can't individual sub-contractors be treated the same as any other individual or company without foisting the administrative and indeed collection burden on small businesses in an already tough and demanding sector? I am understanding and more than accepting of the need for individuals and companies to register as self employed or with companies house and I accept that there may be arguments that this is a sector where avoidance has been an issue but why penalise small businesses that are trying to do things correctly and contribute to economic growth with this significantly time consuming burden?

Why is this idea important?

I spend considerable amounts of time administering CIS deductions on behalf of HMRC every month – checking verifications, deducting tax, paying tax over, recording submissions, issuing tax certificates of deduction, entering returns as well as maintaining our own tax gross status. Why can't individual sub-contractors be treated the same as any other individual or company without foisting the administrative and indeed collection burden on small businesses in an already tough and demanding sector? I am understanding and more than accepting of the need for individuals and companies to register as self employed or with companies house and I accept that there may be arguments that this is a sector where avoidance has been an issue but why penalise small businesses that are trying to do things correctly and contribute to economic growth with this significantly time consuming burden?

Pensioners migrating abroad should not have pensions frozen.

UK pensioners should all be entitled automatically to the statutory increases in state pensions but this is not the case at present.

Pensioners who have children living abroad, eg in Australia, often consider migrating to spend their latter years with their families.   Something that can put them off doing this is that increases in the UK state pension are not allowed for those going to certain countries [such as Australia].  This is desperately unfair to UK nationals who have earned their pensions and have a right to them.  It is a deterrent to the natural inclination to be with children and families in people's declining years.  It is a denial of their human rights.

The cost to the UK of allowing the increases would be offset by the fact that the burden of care in those last years of life would be removed from UK services such as the NHS and Social Services.   Full state pension rights including increases should be restored to these hard-working and deserving older people.

A start could be made by granting the state pension increases to those migrating to join their children or families in Australia and New Zealand – but preferably to all areas right away.

Why is this idea important?

UK pensioners should all be entitled automatically to the statutory increases in state pensions but this is not the case at present.

Pensioners who have children living abroad, eg in Australia, often consider migrating to spend their latter years with their families.   Something that can put them off doing this is that increases in the UK state pension are not allowed for those going to certain countries [such as Australia].  This is desperately unfair to UK nationals who have earned their pensions and have a right to them.  It is a deterrent to the natural inclination to be with children and families in people's declining years.  It is a denial of their human rights.

The cost to the UK of allowing the increases would be offset by the fact that the burden of care in those last years of life would be removed from UK services such as the NHS and Social Services.   Full state pension rights including increases should be restored to these hard-working and deserving older people.

A start could be made by granting the state pension increases to those migrating to join their children or families in Australia and New Zealand – but preferably to all areas right away.

Simple TAX/NI

Combine both tax and NI .Completely discard the levels,bands and allowances of all descriptions. Everyone then pays say 10p in the £ on every £ of income.Pensions and welfare benefits could be raised by the same amount to avoid hardships in those areas.The example of 10p in the £ could be increased or decreased in each budget dependant upon the countries financial position .The amount saved in administration from Govt level down would be vast and everyone could could calculate if their tax paid was correct or not.

Why is this idea important?

Combine both tax and NI .Completely discard the levels,bands and allowances of all descriptions. Everyone then pays say 10p in the £ on every £ of income.Pensions and welfare benefits could be raised by the same amount to avoid hardships in those areas.The example of 10p in the £ could be increased or decreased in each budget dependant upon the countries financial position .The amount saved in administration from Govt level down would be vast and everyone could could calculate if their tax paid was correct or not.

Corporation Tax “Allowance”

There should be a change in the corporation tax system to give a tax free "allowance", perhaps in a similar way as an individual has a personal allowance, or by a % of turnover calculation. The general idea could be implemented in a few ways and probably with a few provisos attached, but the "essence" of this should be workable.

At the moment a small company operating with a very small profit margin, only just above break even, has to pay tax on that profit no matter how small. This makes it difficult for small companies to make capital repayments against loans or mortgages, which are not tax deductable.

Why is this idea important?

There should be a change in the corporation tax system to give a tax free "allowance", perhaps in a similar way as an individual has a personal allowance, or by a % of turnover calculation. The general idea could be implemented in a few ways and probably with a few provisos attached, but the "essence" of this should be workable.

At the moment a small company operating with a very small profit margin, only just above break even, has to pay tax on that profit no matter how small. This makes it difficult for small companies to make capital repayments against loans or mortgages, which are not tax deductable.

VAT – Level the Playing Field & Increase Employment

A VAT threshold of £70,000 is a real barrier to growth. Customers will not pay an extra 17.5% (soon to be 20%) if they can avoid it so many businesses stay small and many plumbers, electricians etc. never actually employ anyone even if they would like to. Instead they turn to cash jobs or turn down work. The effect is:

  • Lower employment from less business growth
  • Lower tax revenues due to 'cash' jobs
  • Lower quality service as the best cannot naturally grow their business which leaves room for lots of cowboys. Bigger business are more professional, more worried about reputation, keep better records and are more likely to pay all their tax
  • Less apprenticeships and opportunities to learn a trade with an established company

The double whammy of employment taxes (12.8% Employers NI etc.) and extra paperwork at this level of turnover on top of the VAT just reinforces the issue.

In a perfect world there would be no VAT (or taxes). As I see it the only option is to lower the threshold where any proper rather than casual business has to account for VAT. A threshold of £20,000 would be about right.

Computerised books keep track of the VAT and if you do not want to do it in house get your accountant/book keeper to deal with it in the same way they deal with bags of receipts from many businesses.

To ease the burden a staggered tax relief of a few hundred pounds in the first few years would lessen the impact on those effected. An even more simplified system could also be introduced for the smallest of businesses.

Why is this idea important?

A VAT threshold of £70,000 is a real barrier to growth. Customers will not pay an extra 17.5% (soon to be 20%) if they can avoid it so many businesses stay small and many plumbers, electricians etc. never actually employ anyone even if they would like to. Instead they turn to cash jobs or turn down work. The effect is:

  • Lower employment from less business growth
  • Lower tax revenues due to 'cash' jobs
  • Lower quality service as the best cannot naturally grow their business which leaves room for lots of cowboys. Bigger business are more professional, more worried about reputation, keep better records and are more likely to pay all their tax
  • Less apprenticeships and opportunities to learn a trade with an established company

The double whammy of employment taxes (12.8% Employers NI etc.) and extra paperwork at this level of turnover on top of the VAT just reinforces the issue.

In a perfect world there would be no VAT (or taxes). As I see it the only option is to lower the threshold where any proper rather than casual business has to account for VAT. A threshold of £20,000 would be about right.

Computerised books keep track of the VAT and if you do not want to do it in house get your accountant/book keeper to deal with it in the same way they deal with bags of receipts from many businesses.

To ease the burden a staggered tax relief of a few hundred pounds in the first few years would lessen the impact on those effected. An even more simplified system could also be introduced for the smallest of businesses.

Clubs and Voluntary Associations Corp Tax Red Tape

Please reinstate the £10k threshold re submission of a Corporation Tax Return which was removed two years ago.    I run a voluntary association staffed by non-paid members of the community.     All surpluses which are invariably less than £10k get re-invested in the community yet we have to submit a CT return annually.     Gifts to charities from the Association are tax deductible but it means we have to be very careful to ensure we time our gifts to avoid paying CT  unnecessarily.     Please re-instate the £10k threshold or exempt clubs and associations.     

Why is this idea important?

Please reinstate the £10k threshold re submission of a Corporation Tax Return which was removed two years ago.    I run a voluntary association staffed by non-paid members of the community.     All surpluses which are invariably less than £10k get re-invested in the community yet we have to submit a CT return annually.     Gifts to charities from the Association are tax deductible but it means we have to be very careful to ensure we time our gifts to avoid paying CT  unnecessarily.     Please re-instate the £10k threshold or exempt clubs and associations.     

SIMPLIFICATION OF BUSINESS TAX

The basic concept is to change the taxation of Businesses  and thwe Self Employed  to a system based upon the taxation of income rather than profits.

The current system of Tax Deductables being replaced by a basic tax Free Allowance of 10% of the business/traders income. The balance of income is then taxed at a basic rate which must be no less than the basic Standard Rate of Tax paid by the general population.

 

Why is this idea important?

The basic concept is to change the taxation of Businesses  and thwe Self Employed  to a system based upon the taxation of income rather than profits.

The current system of Tax Deductables being replaced by a basic tax Free Allowance of 10% of the business/traders income. The balance of income is then taxed at a basic rate which must be no less than the basic Standard Rate of Tax paid by the general population.

 

Charity Registration Threshold

The Charity Act of 2006 requires all charities to register which have an income exceeding £5000.  This is much too low and imposes legal requirements on very small organisations which don't have the resources for such work and which don't need government monitoring.  This generates unnecessary work for the charity commission who should be concentrating their efforts on monitoring the bigger sums of money.  It is suggested that this limit be increased considerably so that small organisations are not burdened with paperwork out of proportion to their activities. At least £10,000 or even £20,000 would be more appropriate.

Why is this idea important?

The Charity Act of 2006 requires all charities to register which have an income exceeding £5000.  This is much too low and imposes legal requirements on very small organisations which don't have the resources for such work and which don't need government monitoring.  This generates unnecessary work for the charity commission who should be concentrating their efforts on monitoring the bigger sums of money.  It is suggested that this limit be increased considerably so that small organisations are not burdened with paperwork out of proportion to their activities. At least £10,000 or even £20,000 would be more appropriate.

Phase out UBR, Phase in SVR

The Unfied Business Rate taxes development of a location, discouraging and delaying optimum use of a site.  Site Value Rating taxes the site regardless, so that there is no such disincentive.  There is instead an incentive to put the site to use to earn the tax levied. 

The tax would be levied on the owner of the freehold, not necessarily the occupier.

The tax should be phased in over two parliaments, starting with reducing the tax on improvements, but increasing it on the site value of business properties.  The process could be completed in seven years.

An option might be given of paying the 'present value' of up to 20 years of future SVR, in effect making it a tax free lease.  At any time the freeholder would have the right to pay up front the 'present value' of future payments up to 20 years ahead.

In the event of  a change in planning permission the SVR would be re-assessed.

Sites values would be indexed every year and revalued on a rolling basis at least every five years.

Why is this idea important?

The Unfied Business Rate taxes development of a location, discouraging and delaying optimum use of a site.  Site Value Rating taxes the site regardless, so that there is no such disincentive.  There is instead an incentive to put the site to use to earn the tax levied. 

The tax would be levied on the owner of the freehold, not necessarily the occupier.

The tax should be phased in over two parliaments, starting with reducing the tax on improvements, but increasing it on the site value of business properties.  The process could be completed in seven years.

An option might be given of paying the 'present value' of up to 20 years of future SVR, in effect making it a tax free lease.  At any time the freeholder would have the right to pay up front the 'present value' of future payments up to 20 years ahead.

In the event of  a change in planning permission the SVR would be re-assessed.

Sites values would be indexed every year and revalued on a rolling basis at least every five years.