Tax Changes

The current tax system is complicated, confusing and can be seen to be unfair.  We propose to swiftly introduce a small number of significant changes to the current Tax System to encourage business & education and to simplify and make more fair individual & community tax rates.

Estimates of changes to tax rate can be found at http://www.hmrc.gov.uk/stats/tax_expenditures/table1-6.pdf


Corporation Tax

Review of global competitiveness of trading within UK, including looking at the Main Rate of Corporation tax and Small companies Corporation Tax

Value Added Tax

The standard VAT rate increased to 20% and review of scope, including healthcare and hygiene products

Sales Tax

Introduction of a Sales Tax @ 0.5% on all sales and financial transactions

Inheritance Tax

Successful people and families already pay a large amount of tax and duty during their lifetimes, and to tax again when they pass away is unjust.  Therefore, Inheritance Tax and other Death Duties abolished

Comments by Adam Smith Institute: http://www.adamsmith.org/blog/tax-and-economy/we-should-scrap-inheritance-tax-/

Stamp Duty on Property Purchases

Stamp Duty increased to 4% and applied only to the marginal price of a house, with a £125,000 allowance, excluding first time buyers

National Insurance

National Insurance is a tax in all but name, with a cap for higher earners

Removing the current cap on earnings that attract National Insurance would raise an additional £11 BILLION - see http://www.theyworkforyou.com/wrans/?id=2010-02-22c.315723.h

The ideas of the current government are comprehensively seen as a "tax on employment" and should be stopped see http://www.egovmonitor.com/node/35381

Articles related to National Insurance changes:

Employment Tax

Employers National Insurance will be replaced by Employment Tax at a standard rate of 12% on all earnings above LTT, ring fenced for use by Business, Education & Corporate Governance, Benefits & Social Cohesion and Health & Social Care VRDs

Social Tax

Employees National Insurance will become Social Tax at a standard rate of 8% on all earnings, ring fenced for use by Benefits & Social Cohesion, Health & Social Care VRDs

Education Funding Tax

University course fees abolished, paid for by extra 1% Education Funding Tax on earnings above Lower Tax Threshold (LTT)

Income Tax

Members of Parliament

MP’s lose any special treatment and included into the general Income Tax schemes with all current expense and allowance schemes comprehensively reviewed

Relevant bills etc

Tax Credits

All current tax credit systems be transferred to Benefits & Social Cohesion VRD and subsequently abolished or absorbed into existing benefits system

Individual & Household Tax Allowances

Allow couples to file joint tax returns to enable pooling of tax allowances

Introduction of Individual and Household (community) tax brackets, with Income Tax Allowance based on 35% of Average Wages

Definitions: TA = Tax Allowance, LTT = Lower Tax Threshold, UTT = Upper Tax Threshold, HTE = Higher Tax Earner

Description   Range
Value
%-age Rate
Low Rate
up to TA (Tax Allowance)
35% of Average Wage
0%
LTT Rate
between TA and LTT
next £25000
23%
UTT Rate
between LTT and UTT
next £25000
+15%
High Rate
above UTT
higher
+5%
Local Tax Rate
above UTT
higher
+2%

Higher Tax Earner’s attract a extra Local Tax rate above UTT going to local authority

This equates to earnings between Lower Tax Threshold (LTT) and Upper Tax Threshold (UTT) at 38% and above Upper Tax Threshold (UTT) at 43% or a maximum of 45% Tax, which includes Local Tax @ 2%

Council Tax & Local Tax

Individual Council Tax

A principle of the change would be to assign a tax charge to every eligible adult (the Individual Council Tax), with an additional household charge

Definitions: CT = Community Tax, HTA = Household Tax Allowance, ICT = Individual Council Tax, HTE = Higher Tax Earner

ICT:    £120 per Eligible Adult, per year
CT:    based on total income of household and band of property value
  • Band A: 66%
  • Band B: 75%
  • Band C: 90%
  • Band D: 100%   Normal Charge for Council Tax
  • Band E: 120%
  • Band F: 145%
  • Band G: 166%
  • Band H: 200%

For Higher Tax Earners, the rate will be 250% + Local Tax Rate (2%), irrespective of property value

Relevant bills etc:
John Mann - Local Government Finance (Amendment) Bill 2010-11

Local Tax

Payable by Higher Tax Earners to local government unit at 2% of earnings above Upper Tax Threshold (UTT)

Household Tax Allowance

Housing Benefit, Council Tax Benefit and Council Tax Rebate replaced with Household Tax Allowance

The Household Tax Allowance (HTA) will provide relief for lower income households

    
Rate1: up to £6000 100%
    Rate2: next £4000 80%
    Rate3: next £4000 70%

Household income consists of ALL benefits and income to the home

Recreational Drugs (including cigarette and alcohol) Duty

  • Comprehensive recreational drug review, including cigarettes, alcohol and current “street drugs” based on scientific evidence
  • Introduction of a Legal definition and relative classification of drugs
  • Possible decriminalisation and tax duties on production and purchase
  • http://www.opsi.gov.uk/si/si2010/uksi_20101068_en_1

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