Tories to 'reform' PAYE

[AtW]

Do away with CT, and let shareholders pay the full amount of income tax on dividends.

Then companies will pay dividends to offshore *cough* schemes *cough* so that shareholders' dividends will be out of reach.

Personally I think CT should be the only tax - dividends should be tax free as tax was already paid.

[HairyArsedBloke]

Why are we (ahem, actually, you) still paying taxes? We beat Napoleon's arse centuries ago. It must have all been paid for by now.

[BolshieBastard]

Why tax business accounts? In fact why tax business at all? Do away with CT, and let shareholders pay the full amount of income tax on dividends.

I love this idea of utopia!

[centurian]

This is all about changing people's mindset to tax. When the tax is taken at source, the tax is less visible. However, if you see a credit of your salary, then an immediate debit for the tax, it's much more evident.

Like if you're a contractor caught under IR35, so every month you have to pay out PAYE, every quarter for VAT and every year for CT. You then realise it's your money (especially PAYE/CT) that the taxman is taking.

I guess the idea is that people will become more demanding of tax cuts and be less squeamish about spending cuts.

I think another idea would be to combine employers and employee's NI - but employers must increase salaries by the current level of employers NI. No-one is worse off, but the stealth tax of employers NI is there for all to see.

[HairyArsedBloke]

It's about the state having control of private wealth.

[TykeMerc]

Tax code should be linked to NI number and money sent to NI account where deductions are made and then next amount is forwarded to employees account.

Accountants might not like this idea.

With errors having to be corrected via a reclaim system with all of the inevitable delays and administration costs? Not very sensible.

[AtW]

With errors having to be corrected via a reclaim system with all of the inevitable delays and administration costs? Not very sensible.

And you can correct error with emergency tax code applied very quickly in the current system?

I personally think it is right for all people to know that Employer is paying NIC on salaries also - that's tax on employment and in effect people pay it, so they need to know total amount of tax paid from the amount that was meant to be due to them.

This way it should be harder for Govt to sneakly increase Employer NI.

[Board Game Geek]

Abolish all the other taxes, and just have a VAT hike.

No need for NI, CT, or anything else.

Every pay packet increases considerably, and thus the extra VAT on all items is no more or less affordable than before anyway. It's all relative.

Simples !

[AtW]

Abolish all the other taxes, and just have a VAT hike.

UK taxes by %-tage take: http://en.wikipedia.org/wiki/File:UK_taxes.svg

VAT is 15% of total take, being at 17.5% level. If all other taxes are abolished then roughly speaking VAT would need to be at 105% rate: this assumes consumption will stay at this level, which it certainly won't.

Other than this minor issue your idea is perfectly fine!

What should happen is that any tax outside of top 5 main taxes (Fuel duty, Corp Tax, VAT, NI, Income tax) - 77% total take is abolished, with corresponding reduction in public expenditure by good 20% books can be balanced.