Make it easier to take on help

I'm a one man business. As soon as I need an employee, even a part-timer, I end up with dozens of HMRC rules to worry about. I should like to be able to pay casual staff gross based solely on the basis of knowing their name, address and NI  number.

Why is this idea important?

I'm a one man business. As soon as I need an employee, even a part-timer, I end up with dozens of HMRC rules to worry about. I should like to be able to pay casual staff gross based solely on the basis of knowing their name, address and NI  number.

EMERGENCY TAX RATE

Change the rate of emergency tax rate paid by employees when returning to work or changing jobs. The rate should be equal to to or lower than the current tax band. Currently the tax paid is disproportianate to the amount earned, this is a dis-incentive to take up work.

Why is this idea important?

Change the rate of emergency tax rate paid by employees when returning to work or changing jobs. The rate should be equal to to or lower than the current tax band. Currently the tax paid is disproportianate to the amount earned, this is a dis-incentive to take up work.

Red tape for small businesses

Small businesses are the life line of this country.  Over 80% of people are employed in small businesses.

Yet we are treated the same as huge businesses in terms of red tape, reporting, tax.  We are over burdened with rules, regulations, forms and tax that bigger businesses have Departments to deal with.  We only have ourselves.

We are now expected by HMRC to not only understand the bewildering and complex rules, but to also to work out ourselves if we get things wrong and then to tell HMRC or else get fined.  We do not know what we do not know!   We should not be fined when the rules are so complex and when we make mistakes. 

My small business has just been hit with a huge reevaluation by the VOA and hit with a huge backdated bill that we have no way of paying, due to no fault of our own.  Why is the VOA allowed to make such huge backdated valuations?  The shop we rent has been the same since we have rented it and we are being penalised.  The VOA should not be allowed to backdate such evaluations.

 

We pay huge rent bills to the Local Authorities, yet if we want any services such as our rubbish collected, we have to pay again.  Small businesses should be able to get some services from Local Authorities as part of their rates and not have to pay twice.

 

There should be recognition by way of lower taxes and national insurance for small business (as oppose to large business) and how they employ local people, and provide just as necessary services as the public sector

Why is this idea important?

Small businesses are the life line of this country.  Over 80% of people are employed in small businesses.

Yet we are treated the same as huge businesses in terms of red tape, reporting, tax.  We are over burdened with rules, regulations, forms and tax that bigger businesses have Departments to deal with.  We only have ourselves.

We are now expected by HMRC to not only understand the bewildering and complex rules, but to also to work out ourselves if we get things wrong and then to tell HMRC or else get fined.  We do not know what we do not know!   We should not be fined when the rules are so complex and when we make mistakes. 

My small business has just been hit with a huge reevaluation by the VOA and hit with a huge backdated bill that we have no way of paying, due to no fault of our own.  Why is the VOA allowed to make such huge backdated valuations?  The shop we rent has been the same since we have rented it and we are being penalised.  The VOA should not be allowed to backdate such evaluations.

 

We pay huge rent bills to the Local Authorities, yet if we want any services such as our rubbish collected, we have to pay again.  Small businesses should be able to get some services from Local Authorities as part of their rates and not have to pay twice.

 

There should be recognition by way of lower taxes and national insurance for small business (as oppose to large business) and how they employ local people, and provide just as necessary services as the public sector

Reduce goverment depratment & public body red tape & regulation too!

It would be good to see the government willing to hear ideas on how it may amend its own regulation – based on the users of its services!

One area in which there is a ridiculous amount of red-tape is the HMRC tax credits system.

Having recently renewed my tax credit claim, I note that they sent two 6 page letters to my address (joint claim and both letters were sent in joint names) to inform me of the need to renew. When I phoned to renew I was informed they had carried out a credit check on me and that I must answer questions based on that check in order to access my account (they asked about my mobile phone and other payments I had recently made – what if I had not been certain of the amounts?!). I was then provided with 2 security questions for my account – not ones of my choosing, ones of their choosing…things they say apply to everyone and that everyone remembers!

What are my security questions?

1) What was my first ever holiday

2) what was the first film I ever saw at the cinema

Neither question was appropriate to me but answers to both are compulsory and must be remembered – if I forget the answers to these imposed questions (answers I had to make up because I didn't have genuine answers to give!) then my claim will be stopped and I will have to take my passport to my local tax office and request that they re-start my claim.

Finally, having successfully renewed my claim, I received a further 2 letters informing me of that fact.

This is a ridiculous set up and needs amendment – it would save both time and money.

This is only one example – I could give you a list as long as your arm of where savings could be made and where regulation needs to be amended!

 

 

 

Why is this idea important?

It would be good to see the government willing to hear ideas on how it may amend its own regulation – based on the users of its services!

One area in which there is a ridiculous amount of red-tape is the HMRC tax credits system.

Having recently renewed my tax credit claim, I note that they sent two 6 page letters to my address (joint claim and both letters were sent in joint names) to inform me of the need to renew. When I phoned to renew I was informed they had carried out a credit check on me and that I must answer questions based on that check in order to access my account (they asked about my mobile phone and other payments I had recently made – what if I had not been certain of the amounts?!). I was then provided with 2 security questions for my account – not ones of my choosing, ones of their choosing…things they say apply to everyone and that everyone remembers!

What are my security questions?

1) What was my first ever holiday

2) what was the first film I ever saw at the cinema

Neither question was appropriate to me but answers to both are compulsory and must be remembered – if I forget the answers to these imposed questions (answers I had to make up because I didn't have genuine answers to give!) then my claim will be stopped and I will have to take my passport to my local tax office and request that they re-start my claim.

Finally, having successfully renewed my claim, I received a further 2 letters informing me of that fact.

This is a ridiculous set up and needs amendment – it would save both time and money.

This is only one example – I could give you a list as long as your arm of where savings could be made and where regulation needs to be amended!

 

 

 

Regulate advertising through the tax system

For all but the smaller companies, restrict tax relief on advertising, marketing and promotions to a fixed % of turnover – perhaps 10%. Would probably need to be coordinated across the EU to be fully effective. May need tightening of accounting rules and relationships to ensure consistency and compliance. May possibly need some exceptions for highly innovative companies. May have unfortunate negative impact on our already struggling Press. But benefits outweigh risks. 

Why is this idea important?

For all but the smaller companies, restrict tax relief on advertising, marketing and promotions to a fixed % of turnover – perhaps 10%. Would probably need to be coordinated across the EU to be fully effective. May need tightening of accounting rules and relationships to ensure consistency and compliance. May possibly need some exceptions for highly innovative companies. May have unfortunate negative impact on our already struggling Press. But benefits outweigh risks. 

Review Non-EU Business Import Charges

Why are non-EU imports subject to Output VAT cash collection at the date of supply while goods from EU countries have the notional VAT recorded both as Output and Input but crutially the trader does not suffer the losss of their funds?

Why is this idea important?

Why are non-EU imports subject to Output VAT cash collection at the date of supply while goods from EU countries have the notional VAT recorded both as Output and Input but crutially the trader does not suffer the losss of their funds?

Companies Act – Unnecessary Forms

The Companies Act 2006 has created a significant number of new forms, many of which appear to have little purpose. For example, Form CC04 – Statement of company's objects. Other than the company's number and name , this form has just a choice of three tick boxes to complete: 'addition to', 'removal of' and 'alteration to'.

Under the 1985 Companies Act it was only necessary to submit a special resolution and the new or revised memorandum and articles. This still has to be done under the 2006 Companies Act, but this pointless form also has to completed and filed. According to the notes on the form the amendment to the objects of the company is not effective until entry of the form on the Register.

The form cannot be filed using the Companies House WebFiling service. It can only be filled in on-line for printing. It cannot be saved or emailed. It still has to be signed on behalf of the company and sent in paper form to Companies House.

All these new forms should be reviewed to see if they are really necessary, and those that are not should be abolished, to cut down on needless red tape.

Why is this idea important?

The Companies Act 2006 has created a significant number of new forms, many of which appear to have little purpose. For example, Form CC04 – Statement of company's objects. Other than the company's number and name , this form has just a choice of three tick boxes to complete: 'addition to', 'removal of' and 'alteration to'.

Under the 1985 Companies Act it was only necessary to submit a special resolution and the new or revised memorandum and articles. This still has to be done under the 2006 Companies Act, but this pointless form also has to completed and filed. According to the notes on the form the amendment to the objects of the company is not effective until entry of the form on the Register.

The form cannot be filed using the Companies House WebFiling service. It can only be filled in on-line for printing. It cannot be saved or emailed. It still has to be signed on behalf of the company and sent in paper form to Companies House.

All these new forms should be reviewed to see if they are really necessary, and those that are not should be abolished, to cut down on needless red tape.

Restore tax break for Pension Companies

The Labour govt removed the tax break that Pension Investment companies got with their uk stock market investments and wrecked the best pension system of any country; this also reduced the volume through the UK stock exchange and so reduced its importance in the world. 

Why is this idea important?

The Labour govt removed the tax break that Pension Investment companies got with their uk stock market investments and wrecked the best pension system of any country; this also reduced the volume through the UK stock exchange and so reduced its importance in the world. 

Charge VAT on imported food

If the cost of food manufactured, grown or packaged outside the UK had 10% VAT charged on it, people would be encouraged to buy British.

It would give an enormous boost to jobs in industry and agriculture in this country.

It could well pay for itself several times over by reduced reliance on the state.

It might mean that the rise in VAT to 20% on many manufactured goods was no longer necessary.

Unless, of course, the EU says we wouldn't be allowed to do it…

Why is this idea important?

If the cost of food manufactured, grown or packaged outside the UK had 10% VAT charged on it, people would be encouraged to buy British.

It would give an enormous boost to jobs in industry and agriculture in this country.

It could well pay for itself several times over by reduced reliance on the state.

It might mean that the rise in VAT to 20% on many manufactured goods was no longer necessary.

Unless, of course, the EU says we wouldn't be allowed to do it…

Income tax avoidance by corporate employees

There are several tax free incentives that corpoates exploit on behalf of their employees which smaller emplloyers don't know of/can't exploit on behalf of their employees. Corpoates present them along with deals from other firms as benefits -eg vouchers with money off and add them as part of a "reward package". eg Did you know that if you use a push bike for all or part of your journey to work you can claim the income tax paid when you buy a new one? this whole area should be investigated and simplified. In the past the purchase of computer equipment had a tax break too.

Why is this idea important?

There are several tax free incentives that corpoates exploit on behalf of their employees which smaller emplloyers don't know of/can't exploit on behalf of their employees. Corpoates present them along with deals from other firms as benefits -eg vouchers with money off and add them as part of a "reward package". eg Did you know that if you use a push bike for all or part of your journey to work you can claim the income tax paid when you buy a new one? this whole area should be investigated and simplified. In the past the purchase of computer equipment had a tax break too.

No business taxes, employee taxes or VAT

Cut all corperation tax , all employee taxes and also  VAT  and replace by a NATURAL RESOURCE TAX Applied At SOURCE .

This tax would replace all present taxes and reduce the burden of administration and finacial accounting  for tax  and employee  purposes.

VAT would also be abolished  and replaced by this new tax .

Fraud would also be avoided to a lrge extent due to the taxes are paid at source and there are few intermedaries and inderviduals  to work fraudulant claims in the new tax process.

The total tax take would also be reduced as the loss to tax collection and fraud would be substantially less

Finacial institutions will have to safeguard there capital with real assets such as gold.

Why is this idea important?

Cut all corperation tax , all employee taxes and also  VAT  and replace by a NATURAL RESOURCE TAX Applied At SOURCE .

This tax would replace all present taxes and reduce the burden of administration and finacial accounting  for tax  and employee  purposes.

VAT would also be abolished  and replaced by this new tax .

Fraud would also be avoided to a lrge extent due to the taxes are paid at source and there are few intermedaries and inderviduals  to work fraudulant claims in the new tax process.

The total tax take would also be reduced as the loss to tax collection and fraud would be substantially less

Finacial institutions will have to safeguard there capital with real assets such as gold.

Ending of payments on account for self certified tax returns

Currently the rules are weighted too much in favour of the tax office. There are penalties for late returns understandably, but what isn't reasonable is having to pay tax based on last years earnings before the end of the current tax year before you know what profit if any you have made. I made a loss on my property earnings in 2009/2010 because of repairs needed but had to pay £1750 up front in Jan 2010 ( based on 2008/9 profits ) with a similar amount due in July 2010 if my accountant doesn't get the return done very quickly. It would be fairer if we had an option to say submit and pay by Sept 30 following the end of the applicable tax year. This would save a lot of unnecessary paperwork and potential error in the tax office as you pay exactly what you owe (once). I won't get my money back at the earliest until Jan 2011 (and I didn't owe it in the first place). This is pernicious as the cash flow consequences to small businesses making a loss one year are paying tax they don't owe on top and even worse if you have to borrow to pay it!

 

 

Why is this idea important?

Currently the rules are weighted too much in favour of the tax office. There are penalties for late returns understandably, but what isn't reasonable is having to pay tax based on last years earnings before the end of the current tax year before you know what profit if any you have made. I made a loss on my property earnings in 2009/2010 because of repairs needed but had to pay £1750 up front in Jan 2010 ( based on 2008/9 profits ) with a similar amount due in July 2010 if my accountant doesn't get the return done very quickly. It would be fairer if we had an option to say submit and pay by Sept 30 following the end of the applicable tax year. This would save a lot of unnecessary paperwork and potential error in the tax office as you pay exactly what you owe (once). I won't get my money back at the earliest until Jan 2011 (and I didn't owe it in the first place). This is pernicious as the cash flow consequences to small businesses making a loss one year are paying tax they don't owe on top and even worse if you have to borrow to pay it!

 

 

Tax – Salary Sacrifice “red tape”

Pension contributions deducted from Gross Salary

Section 62 ITEPA 2003 is over prescriptive and totally unfair for companies wishing to assist their employees in making pension provision. HMRC have published some 20 manuals on this subject (see EIM42750 for list) and are now retrospectively going after companies who have not precisely complied with this bad law.

The answer is to repeal all relevant sections. The provision for pension should be as simple as possible for employers and employees to set up in a tax efficient way, and not be subject to thirty odd pages of manuals.

Why is this idea important?

Pension contributions deducted from Gross Salary

Section 62 ITEPA 2003 is over prescriptive and totally unfair for companies wishing to assist their employees in making pension provision. HMRC have published some 20 manuals on this subject (see EIM42750 for list) and are now retrospectively going after companies who have not precisely complied with this bad law.

The answer is to repeal all relevant sections. The provision for pension should be as simple as possible for employers and employees to set up in a tax efficient way, and not be subject to thirty odd pages of manuals.

repeal tax laws on citizens to 20%

all tax for everyone is 20%. corporate and individuals. across the board 20%. no loophole nessecary no tax lawyers nessecary just 20% across the board, including min wage, icluding the top 1%

Why is this idea important?

all tax for everyone is 20%. corporate and individuals. across the board 20%. no loophole nessecary no tax lawyers nessecary just 20% across the board, including min wage, icluding the top 1%

zero tax on all green cars…

zero tax on all green cars ..that means ALL green cars. i would love to buy an aston martin db9 eco fuel (if i had the money) but iwould still pay tax on the car as if it ran on petrol. the car can do both but was made to run on ethanol. but still it and their elk of cars are taxed as petrol cars

Why is this idea important?

zero tax on all green cars ..that means ALL green cars. i would love to buy an aston martin db9 eco fuel (if i had the money) but iwould still pay tax on the car as if it ran on petrol. the car can do both but was made to run on ethanol. but still it and their elk of cars are taxed as petrol cars

Abolish ‘Special Taxes’

National Insurance is a regressive tax, favouring high earners (who pay only 1.5%) over low earners (who pay 11.5%).  Basic Rate taxpeyers pay 31.5% (20% income tax plus 11.5% NI).  Higher earners ought to pay more – on bonuses as well as salary.

Abolishing NI and consolidating that into income tax would make all earned income taxes progressive, which is fair.

 

Similarly, abolishing 'Road Tax' (at least for private vehicles – and probably for comercial vehicles too) and replacing those with higher fuel taxes (maybe for all fuels, including gas and electricity) would move the tax burden from tose who MIGHT use fuel to those who actually do.

Protection for those who need to use fuel (such as pensioners who need to keep warm during cold winters, and maybe rural dwellers who need to travel further to obtain supplies) should be provided by explicit means that favour the intended recipients directly – though those who choose to live in the more attractive environment of the country, because they can afford to commute, shouldn't get that benefit.  Taking both domicile postcode and work postcode into account (using the least rural as the basis for benefit) could allow that.

 

Again, why is there a distinct Corporation Tax?  Companies either pay their profits to individuals (either as salaries/bonuses to employees or as dividends to investors) or re-invest them.  The former two can be taxed as income, while the last is, surely, desirable.

 

In general, simplifying the tax system – tending towards abolishing as many 'special' taxes and duties as possible – seems to me to make it easier for government to achieve its aims in a fair way.

 

High earners ought to pay proportionately more towards the commonweal.  High fuel users should be encouraged by fuel taxes to use fuel efficiently.  Profitable companies should not be penalised for being profitable, but individuals who gain from that profitability ought to pay more, in proportion to their gain.

 

KISS!  (Keep It Simple Sunshine!) ought to be our government's aim.

Why is this idea important?

National Insurance is a regressive tax, favouring high earners (who pay only 1.5%) over low earners (who pay 11.5%).  Basic Rate taxpeyers pay 31.5% (20% income tax plus 11.5% NI).  Higher earners ought to pay more – on bonuses as well as salary.

Abolishing NI and consolidating that into income tax would make all earned income taxes progressive, which is fair.

 

Similarly, abolishing 'Road Tax' (at least for private vehicles – and probably for comercial vehicles too) and replacing those with higher fuel taxes (maybe for all fuels, including gas and electricity) would move the tax burden from tose who MIGHT use fuel to those who actually do.

Protection for those who need to use fuel (such as pensioners who need to keep warm during cold winters, and maybe rural dwellers who need to travel further to obtain supplies) should be provided by explicit means that favour the intended recipients directly – though those who choose to live in the more attractive environment of the country, because they can afford to commute, shouldn't get that benefit.  Taking both domicile postcode and work postcode into account (using the least rural as the basis for benefit) could allow that.

 

Again, why is there a distinct Corporation Tax?  Companies either pay their profits to individuals (either as salaries/bonuses to employees or as dividends to investors) or re-invest them.  The former two can be taxed as income, while the last is, surely, desirable.

 

In general, simplifying the tax system – tending towards abolishing as many 'special' taxes and duties as possible – seems to me to make it easier for government to achieve its aims in a fair way.

 

High earners ought to pay proportionately more towards the commonweal.  High fuel users should be encouraged by fuel taxes to use fuel efficiently.  Profitable companies should not be penalised for being profitable, but individuals who gain from that profitability ought to pay more, in proportion to their gain.

 

KISS!  (Keep It Simple Sunshine!) ought to be our government's aim.

Make fuel taxation more transparent

Ever since before even the first fuel protests several years ago, it's been claimed that 60 – 80% of the cost of Petrol & Diesel fuel consist of taxation (depending on how good the maths of the person making the claim is).

One claim in a comment I saw over on John Redwood's excellent blog during the months leading up to the recent general election suggested that the real cost of petrol at the time was 44p a litre.. the other 76p of a £1.20 litre of fuel being the taxes being slapped on top.

Pretty much everyone (apart from the bean counters in the treasury) seem to thing the double taxation (duty + VAT) is unfair, and the taxation level takes the mickey (actually most people use a much stronger word than "mickey").

My solution is:

  • Scrap Fuel Duty
  • Scrap VAT on fuel
  • Replace both with a single "Fuel Sales Tax" ("F.S.T") to make it more transparent
  • Include a "Rural Relief" on the Fuel Sales tax in rural areas with sub-standard public transport services (perhaps in the form of a card similar to a "NECTAR" card or "BOOTS Advantage" card?)
  • Include an "essential services relief" on the Fuel Sales Tax to ease the fuel burden on Emergency Services, Public Transport operators & Hauliers.

 

Why is this idea important?

Ever since before even the first fuel protests several years ago, it's been claimed that 60 – 80% of the cost of Petrol & Diesel fuel consist of taxation (depending on how good the maths of the person making the claim is).

One claim in a comment I saw over on John Redwood's excellent blog during the months leading up to the recent general election suggested that the real cost of petrol at the time was 44p a litre.. the other 76p of a £1.20 litre of fuel being the taxes being slapped on top.

Pretty much everyone (apart from the bean counters in the treasury) seem to thing the double taxation (duty + VAT) is unfair, and the taxation level takes the mickey (actually most people use a much stronger word than "mickey").

My solution is:

  • Scrap Fuel Duty
  • Scrap VAT on fuel
  • Replace both with a single "Fuel Sales Tax" ("F.S.T") to make it more transparent
  • Include a "Rural Relief" on the Fuel Sales tax in rural areas with sub-standard public transport services (perhaps in the form of a card similar to a "NECTAR" card or "BOOTS Advantage" card?)
  • Include an "essential services relief" on the Fuel Sales Tax to ease the fuel burden on Emergency Services, Public Transport operators & Hauliers.

 

INCREASE PERSONAL TAX ALLOWANCES FOR SELF EMPLOYED PEOPLE

Self employment is becoming more common these days and people should be incentivised to become self employed in order to boost the economy and increase employment opportunities for others. Self employment is not a guaranteed path to riches and the current tax system does nothing to incentivise people to become self employed. 

Why is this idea important?

Self employment is becoming more common these days and people should be incentivised to become self employed in order to boost the economy and increase employment opportunities for others. Self employment is not a guaranteed path to riches and the current tax system does nothing to incentivise people to become self employed. 

start chasing tax dodgers and claim all taxes due

for every pound lost to the treasury through the benefits system through applicant mistakes, staff mistakes and crimimal fraud all added together there is 16 pounds lost to the treasury through tax evasion and tax dodging.

 

if the government collected all the taxes actually due to it there would be no financial crisis, there would be no budgetry black hole we would need no cut backs in services we would need no further tax rises.

 

why not instead of pointing fingers at societies poorest, those who claim benefits for ill health and being out of work point fingers at the tax evaders?  why not instead of cutting back on services and introducing yet more taxes just chase the taxes already owed?

Why is this idea important?

for every pound lost to the treasury through the benefits system through applicant mistakes, staff mistakes and crimimal fraud all added together there is 16 pounds lost to the treasury through tax evasion and tax dodging.

 

if the government collected all the taxes actually due to it there would be no financial crisis, there would be no budgetry black hole we would need no cut backs in services we would need no further tax rises.

 

why not instead of pointing fingers at societies poorest, those who claim benefits for ill health and being out of work point fingers at the tax evaders?  why not instead of cutting back on services and introducing yet more taxes just chase the taxes already owed?

Replace VAT with Sales Tax

Government can raise revenue from product sales especially in the retail sector by replacing VAT with a tax on retail sales.

The present VAT system imposes a major burden on businesses, especially small businesses such as independent retailers, in both time and costs.

The present VAT system requires a business registered for VAT to account for every single  transaction of both sale of product and purchase of product to be itemised in records stored for VAT verification.

Whilst sales records are relatively simple to record through the production of sales transactions through till records, records of purchases are a nightmare to small businesses because every invoice received, inevitably a paper transaction which must be retained and then recorded for VAT history records.

Every quarter, each business must produce a report to the VAT  authority indicating theVAT collected through sales to customers and the VAT paid to suppliers through purchases. A record of every item involved must be recorded and stored for six years for VAT inspection purposes.

This is a major administrative time and cost burden on small businesses which distracts the owners from their main task in maximising sales revenue and contributing to growing the economy.

This burden can easliy be removed from the VAT registered business by the following alternative arrangement:

1. Businesses registered for VAT to be issued with a card similar to a NI or credit card which contains the business name, address and VAT number.

2. This can be presented to suppliers to verify VAT registration who would then not charge VAT on purchases. This would apply throughout the supply chain removing administrative burden on wholesalers also.

3. Tax on sales to end users can be accounted for by programming sales tills to produce a statement at the end of each month stating how much Sales Tax is due with a payment due date indicated. Non-VAT sales can be exempted as present sales tills are now programmed.

There are benefits to business and Government as follows:

Benefits to Business:

1. Reducedt admin and non-productive time burden

2. Reduced overhead costs

3. Better utilisation of (often limited) space in retaining six years of records.

4. Bigger retention of earnings from hard work and enterprise. Many independent retailer business owners work 75+ hours a week with a return of less than minimum hourly wage paid to their employees. Yet these are the very people who deliver value to the mass of people in everyday life and who are rarely a burden on the welfare state..

Benefits to Government:

1. Simplification of the whole process of acquiring revenue through sale of goods.

2. Reducing government costs – a major benefit!

3. Redeploying HMRC officers to concentrating on major tax avoidance initiatives, and in an area of major concern to small businesses, in policing imports of illicit products to avoid duty and VAT.

There are probably other benefits both to busines and government which this submission does not include. Serious contributors are welcom to add their comments.

Why is this idea important?

Government can raise revenue from product sales especially in the retail sector by replacing VAT with a tax on retail sales.

The present VAT system imposes a major burden on businesses, especially small businesses such as independent retailers, in both time and costs.

The present VAT system requires a business registered for VAT to account for every single  transaction of both sale of product and purchase of product to be itemised in records stored for VAT verification.

Whilst sales records are relatively simple to record through the production of sales transactions through till records, records of purchases are a nightmare to small businesses because every invoice received, inevitably a paper transaction which must be retained and then recorded for VAT history records.

Every quarter, each business must produce a report to the VAT  authority indicating theVAT collected through sales to customers and the VAT paid to suppliers through purchases. A record of every item involved must be recorded and stored for six years for VAT inspection purposes.

This is a major administrative time and cost burden on small businesses which distracts the owners from their main task in maximising sales revenue and contributing to growing the economy.

This burden can easliy be removed from the VAT registered business by the following alternative arrangement:

1. Businesses registered for VAT to be issued with a card similar to a NI or credit card which contains the business name, address and VAT number.

2. This can be presented to suppliers to verify VAT registration who would then not charge VAT on purchases. This would apply throughout the supply chain removing administrative burden on wholesalers also.

3. Tax on sales to end users can be accounted for by programming sales tills to produce a statement at the end of each month stating how much Sales Tax is due with a payment due date indicated. Non-VAT sales can be exempted as present sales tills are now programmed.

There are benefits to business and Government as follows:

Benefits to Business:

1. Reducedt admin and non-productive time burden

2. Reduced overhead costs

3. Better utilisation of (often limited) space in retaining six years of records.

4. Bigger retention of earnings from hard work and enterprise. Many independent retailer business owners work 75+ hours a week with a return of less than minimum hourly wage paid to their employees. Yet these are the very people who deliver value to the mass of people in everyday life and who are rarely a burden on the welfare state..

Benefits to Government:

1. Simplification of the whole process of acquiring revenue through sale of goods.

2. Reducing government costs – a major benefit!

3. Redeploying HMRC officers to concentrating on major tax avoidance initiatives, and in an area of major concern to small businesses, in policing imports of illicit products to avoid duty and VAT.

There are probably other benefits both to busines and government which this submission does not include. Serious contributors are welcom to add their comments.

Alcohol Duty – Food Manufacturers

As a food manufacturer we pay alcohol duty on wines and spirits used as an ingredient in our products. We can then claim back the duty every three months.

As a small business this presents a cashflow challenge – that is, waiting up to three months for our cash to be refunded. In contrast, we can claim our VAT refund monthly.

We asked the Alcohol Duty HMRC Advisors if we could claim our Alcohol Duty refund monthly and they said "no" because of the law.

Could this please be reviewed to be consistent with VAT refunds which can be monthly.

Thank you.

 

Why is this idea important?

As a food manufacturer we pay alcohol duty on wines and spirits used as an ingredient in our products. We can then claim back the duty every three months.

As a small business this presents a cashflow challenge – that is, waiting up to three months for our cash to be refunded. In contrast, we can claim our VAT refund monthly.

We asked the Alcohol Duty HMRC Advisors if we could claim our Alcohol Duty refund monthly and they said "no" because of the law.

Could this please be reviewed to be consistent with VAT refunds which can be monthly.

Thank you.