A point I've been trying to make for years (decades?) here.
Labour started it by throwing around nonsensical terms like "relative poverty" - a measure that tells us nothing about whether or not the subject is in poverty or not.
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Politics, politics, politics (so long and thanks for all the fish)
- Thread starter SpurMeUp
- Start date
Labour started it by throwing around nonsensical terms like "relative poverty" - a measure that tells us nothing about whether or not the subject is in poverty or not.
Yes, the tax system is ridiculously complex in this country and full of daft s***. Want to know about unfairness in the tax system?
My wife and I are not entitled to child benefit, because my taxable income is over the £80,000 a year threshold. This is a lot down to the fact that I have a company car. HMRC tax company cars by requiring the employer to put the full list price of the vehicle in the P11D and deduct BIK on that figure annually, even though the car scheme provider never paid the list price in a million years and I am not being given £40,000 worth of benefits a year, my employer is leasing the vehicle from the car scheme provider over a 3 year lease and deducting it from my car allowance monthly.
Our friends receive full child benefit despite earning more as a household than my wife and I because both of them have decent jobs, but both get paid below the £60,000 a year threshold after which HMRC starting clawing it off you.
So because at some point the government wanted to "tax the rich" and clobber company cars (because only rich people get given company cars) you've got a situation where a couple that are richer than my wife and I receive over £2,000 a year from the government to help with childcare and Mt wife and I receive diddly squat.
And I'll tell you why successive governments have made our tax system so ridiculous and complex, it's so they can get away with the lies our current government did: "we're not raising taxes on working people, we are just going to raise a load of other taxes you oiks don't understand that will make you all poorer, so vote for us!"
Yes, loads of people point to statistics that show poverty is increasing in this country. I have to explain that that's because poverty has largely been eradicated in this country so a load of bored civil servants have had to invent a load of new classifications for poverty. I think the latest is "in-work poverty". So where you had in the 1980s common situations where housing did not have central heating and housing blocks shared outside toilets, these days poverty looks like a car, £50 a week on fags and booze, a 60" TV and a sky sports subscription.
Similarly I point out continuously that when an economy does well, inequality increases. If everyone's pay goes up by 10%, someone earning £20K a year now earns £22K. Someone earning £2m a year now earns £2.2m
Quite. The marginal rate on earnings between £100k and £125k is preposterous too.
Almost enough to make one take a very expensive (electric) car and pay dividends to the wife instead....
BTW, many manufacturers now allow you to povvo spec a car for P11D values and then rent the features you want, charging them as expenses.
My employer makes me have an electric or hybrid. Went electric due to the low BIK and running costs (plus feeling good about my emissions footprint) but yes the list prices for electric are ridiculous.
Robspur12
Nick Barmby
I made my point badly. I meant to say there should be a legal presumption against tax avoidance schemes unless they can demonstrate a net benefit to society.
There is legal presumption against tax avoidance schemes, it's called IR35.
Robspur12
Nick Barmby
that’s only for payroll and it is very inconsistently applied. There is no net benefit test either.
I've got not issue with that.
HMRC's lawyers will still be less good than those representing the rich, my business and my kids' school. It won't change anything.
Robspur12
Nick Barmby
Agreed re: single income child benefit - it is a very unfair policy.
Next time get one without the options and piy all of the human rights like heated/cooled seats, remote climate etc through monthly expenses. You can expense many of the safety features like lane keeping and auto driving too.
Probably won't be long until you have to unlock the full power of a motor with monthly fees - that will make the BIK lower and the expenses higher too.
I think I could have saved the best part of £20k in BIK value doing things that way. Although the tax on my car is only around £1k per year anyway.
Yeah but that goes to your point about avoidance being presumed against in law *unless there is some benefit to society* and payroll is pretty much the only area of taxation where avoidance is pretty much always net negative impact. Other forms of taxation, including non-payroll forms of income tax are generally investment incentive areas, where the laffer curve really comes into its own (where higher taxes de-incentivise the activity being taxed making the activity reduce and tax revenue fall) whereas the vast majority of people are going to want to get paid for employed work regardless of the tax situation (within reason).
As to IR35 being applied inconsistently - it's not applied inconsistently, it's outcomes are inconsistent. All the contractors working for my bank had to get in line, whereas Mr. Lineker hired a hotshot lawyer and took HMRC's pants down.
I'll have to look into it. Not going to lie, I just selected one of the already presented spec packages set out by the scheme, which meant there weren't many optional extras to even add on afterwards. Think I then paid extra for the colour I liked and that was about it as it already had all the stuff I wanted such as heated seats, steering wheel, alcantara, parking cameras and assist etc. Other aspect is the lead times because sometimes unless you go for one of the "in stock" cars you can wait ages, although this time out it was only about 10 weeks wait for me.Next time get one without the options and piy all of the human rights like heated/cooled seats, remote climate etc through monthly expenses. You can expense many of the safety features like lane keeping and auto driving too.
Probably won't be long until you have to unlock the full power of a motor with monthly fees - that will make the BIK lower and the expenses higher too.
I think I could have saved the best part of £20k in BIK value doing things that way. Although the tax on my car is only around £1k per year anyway.
That's true, mine took a year to turn up. During that time my old car dropped in value by around £10k so I've just held on to it instead.