January 2007 Archives
Sometime ago, this blog highlighted the rumours (see here and here) that changes were afoot to base the council tax on the value of one's home, taking into account any renovation work done, the neighbourhood, etc.
Now the Telegraph reports that council tax inspectors are secretly creating a bank of photographs of our homes. Apparently, officers of the Valuation Office Agency are being equipped with cameras to take pictures of houses when they are out and about doing their valuation work. These photographs are being stored by the Agency. So far, around 2.2 million photographs are reported to have been stored. First step towards building a database duly taken.
We can all see where this one will lead, can't we? Leave to one side, if you can, the potential for abuse. Leave also the human rights issues at play here. There is no doubt that this Government will think nothing of using this information to raise council tax.
Sit back and wait for the denials.
Tomorrow (31 January) is the deadline for submitting tax returns, and the taxman has very helpfully gone on strike.
So what happens to any returns that cannot be filed because the offices are shut, or some such thing?
Not to worry, HMRC have put up a notice saying you should 'file as soon as possible on the following day'. In any case, returns filed on 1 February, while technically 'late', are not subject to a penalty. This is a long-standing HMRC practice.
If, however, you get an automatic late filing penalty, you can always appeal on the grounds of reasonable excuse.
Let me how how you get on.
The number of households liable for inheritance tax has risen from 34 per cent last year, to 41 per cent. So we learn from research carried out for the Scottish widows. See the press release here (pdf).
Surely this should now bury the popular misconception about inheritance tax being a tax 'for the rich'. There is no way that 40 per cent of households in this country can be described as 'rich'. The Government repeatedly insists that the true percentage is 6 per cent. Heaven knows where they get this figure from.
The rise in house prices is one of the main reasons for many households falling within the inheritance tax net. Add to that the fact that the nil rate band (within which property is taxed at zero percent) has only risen in line with inflation. The nil rate band is increased every year by Uncle Gordon. It currently stands at £285,000. This means that the first £285,000 of taxable property is taxed at zero percent. Anything exceeding that is taxed at 40 per cent. In the South of England, the average house is worth at least £285,000. The implication of this is that the average homeowner is potentially liable to inheritance tax, once the family home is taken into account.
Were the nil rate band to be increased in line with the rise in house prices, rather than with inflation, it would be a lot higher than £285,000, and many more households would escape the inheritance tax net.
Last year, the nil rate band increased by 3.6 per cent, to £285,000. House prices, on the other hand, increased by 31 per cent. The nil rate band is clearly not keeping pace with the growth in property value, and for a tax based on property value, this is certainly an absurd state of affairs.
Someone else (ie, apart from Uncle Gordon) has embraced the 'Tax will save the environment' doctrine.
Yes, it's our old friend, the European Commission. Word is that they are planning a few 'green taxes' of their own, which they intend to introduce to member states.
Not many details yet; in any case, the taxes are not intended to take effect before 2009.
Something tells me Uncle Gordon won't take this lying down. The way he sees it, if anyone is to introduce taxes in this country, surely it should be he, and no-one else.
So have you already submitted your tax return, ahead of the 31 January deadline? Not yet? What are you waiting for?
I wouldn't bank on being able to file online if I were you. Alas, the taxman's computer is broken. It cannot cope with the numbers of people doing their last-minute filing online. Some people have been unable to access the system to submit their returns.
Missing the 31 January deadline incurs an automatic £100 fine. Don't give Greedy Gordon any more money than you have to. It's not too late to start preparing a paper return.
S&P also stated that Britain was one of the few countries with an increased tax burden. All across Europe, the tax burden is falling.
The Fisherman is also interested in research from the Federal Reserve Bank of Kansas City, which found that the tax burden is responsible for the fall in working hours across some Western countries. The study found that there was a 21 per cent decrease in the average working week in Britain. While there are other factors for this, it is undeniable that the tax burden also has a significant impact.
Uncle Gordon, stand warned. A fall in working hours leads to lower productivity, which leads to lower tax revenues. How will you address that? By another tax hike? That would be most counter-productive. Take heed, and cut taxes now.
The average council tax is likely to exceed £1,300 a year. This is because the central Government is restricting the amount of its grant to the local authorities.
The local authorities are going to receive much less than they expected. Faced with a funding shortfall, they have two options: cut back on unnecessary spending, or raise council taxes to plug the gap. Guess which option most of them will be taking.
Uncle Gordon is being accused of theft by the chief executive of Ryanair.
And he is right. The doubling of air passenger duty was done under the pretext of saving the environment. If it is true that aviation accounts for only 3 per cent of global greenhouse gas emissions, it means that there are worse offenders out there. In addition, what is the guarantee that the extra tax will go towards environmental issues? Fact is, Gordon Brown just saw an easy opportunity to grab some more money, and seized it.
HMRC has decided to award bonuses to the taxman based on how much unpaid tax he can collect.
As if we were not bullied enough by the taxman, he has now been given another reason to launch baseless investigations into our tax affairs. We can therefore expect more aggressive enquiries into our accounts, and such like.
You know how bullies only pick on those smaller than they are? It's the small businesses which will suffer the most.
This blog wishes all its readers a Happy New Year.
