But why so late? The cynical amongst us might wonder at its being scheduled two days after Barack Obama's expected visit to Britain. Surely Labour is not hoping for some Obama-shine to rub off on them, and distract us all from the contents of the Budget two days later? Surely not.
]]>As far as complicated legislation goes, this Act takes some beating. Over 400 pages, packed with amendments, repeals, etc. Normally, such an Act would have a Schedule at the end, setting out all the legislation repealed by that Act. This time, the draftsmen did not even bother. So, for the first time that I can recall, the Finance Act does not include a Repeals Schedule. It is therefore impossible to tell, at a glance, what legislation has been repealed by the Act. Frankly astonishing. Even in view of its well-deserved reputation for sloppy and incompetent drafting, this Government has somehow managed to surpass itself.
]]>After the "spectacular success" of the first one, right?
One wonders why the taxman is being so generous. I would have thought that, having obtained so much information about tax-dodgers and their affairs (by means of the EU Savings Directive, court orders, whistleblowers, etc), the taxman would by now have pounced on the fiddling miscreants. But no, instead he seems to want to "help" them get their affairs in order.
Could it just be that, far from being kind, the taxman simply lacks the resources (or perhaps more accurately, the competence), to trace these people and take them to task? Instead of getting his hands dirty doing some proper investigation work, the taxman prefers to sit back and offer an "amnesty", in the hope that those affected would turn up willingly and confess. Surely, by now, a few such taxpayers might be tempted to call the taxman's bluff by sitting tight and saying nothing. A risky move, but looking at the taxman's record of blunders over the past few years, I can see why a taxpayer might well take that gamble.
]]>Not at all surprising, I must say.
Much of the increase comes from stealth taxes. The basic rate of income tax has not moved much in the past 17 years: recently, we've had 23%, then 22%, and now 20%. However, council tax has shot through the roof, as have indirect taxes such as the excise duties on fuel. Oh, and let's not forget fiscal drag - that convenient ruse by which Chancellors rake in more tax by increasing the tax-free allowance by the rate of inflation, well knowing that salary rises oftentimes exceed that rate. Result? More people fall to be taxed as higher earners than would otherwise be the case.
So yes, none of this is surprising. The only surprising thing is that the Telegraph article does not contain any remarks from a Government minister. In time past, someone would have turned up to dispute the data, claiming that things have never been rosier for the British people. So did the Telegraph not bother to ask a minister to comment? Or could it be that no Government minister came forward to argue the case? Perhaps they all now realise the desperate hollowness of their empty words, not just to the electorate, but more significantly, to themselves?
]]>Who will rid us of this clueless bunch of incompetents? It would all be so hilarious were it not for the fact that they are causing proper damage to everything they touch.
Still, the u-turn is welcome news, if true.
]]>The proposals are being put forward by the Office of Communications (Ofcom), the regulator for telecoms. It is included in their latest public broadcasting review. Click here to read the pdf, if you must.
So Ofcom thinks it's a good idea to introduce a tax to pay for such programmes. In their words,
It might be possible to introduce levies on providers not currently part of the formal public service broadcasting model, such as broadcasters, equipment sales, internet service subscriptions or UK online content providers.
Interesting how they use the less aggressive word, "levy", to describe what is in essence, a tax.
Needless to say, this "levy" will not be borne ultimately by the internet service provider. Rather, it will be passed down to the poor consumer, who will have to pick up the tab for whatever passes for "public service" programmes in dumbed-down Britain today.
What rot. Now I have nothing against public service programming - some of the programmes are quite good - but I fail to see why the average broadband user should be made to pay for programmes for which he does not care. If these public service programmes provide value, surely it shouldn't be too hard for them to find some commercial sponsors, and leave the poor taxpayer alone. If, on the other hand, they can find no advertisers or sponsors for their wonderful programmes, then perhaps we are all philistines who do not know what is good for us. Forcing us then to pay for such programmes would not be right, as we obviously do not value them enough to watch them. But perhaps Ofcom does not care whether or not we watch; they are simply satisfied if they can part us from our money.
]]>Gordon Brown will probably calculate that it would be too embarrassing to do a U-turn and keep the 10% rate after all. Even so, he will probably feel he has to do something to give the impression that he cares about the lowest earners and pensioners who will be most affected by this measure. This is my prediction: the announcement of a benefits package "providing targeted help to the most vulnerable in society". Therefore, more tax credits. In other words, more form-filling, more bureaucracy, more complexity, more waste.
It would be easier simply to raise the tax-free allowance to, say, £10,000, thereby ensuring that the lowest earners get to keep most of their income. However, don't hold your breath.
]]>The basic rate is reduced from 22% to 20%, however, this is small comfort to the lower earners who will be hit hard by the loss of the 10% rate.
Will the Government change its mind, and keep the 10% rate after all? Not such a far-fetched idea; this is, after all, a Government whose tax policy consists of blunders and U-turns. The Finance Bill is currently going through Parliament, so until it receives Royal Assent in mid-July, anything is possible.
]]>So much for simplification.
The Bill and Explanatory Notes can be downloaded here. (Very large pdfs - you have been warned)
]]>Hmm. And this is the Government that keeps trying all means to get its hands on our data? How secure is any data that we give to this Government?
I have queried in the past the wisdom of requiring a tax collection authority to pay out benefits. The taxman knows more about collecting money than about paying it out, so getting him to administer child benefits was always going to be tricky. That aside, a security breach is a security breach. It could still have happened even if the taxman wasn't administering benefits (ie it could still have happened in the course of the taxman's handling of taxpayers' records), but the extra role as benefits administrator only made it even more likely.
As a side point, it's a bit strange these days to see a honourable resignation.
Will write more after hearing what the Chancellor has to say.
The answer, from reading today's Telegraph, appears to be 'yes'. That in itself is not surprising; the surprising thing is that the U-turn has come so soon. I was expecting that we would have to wait until the 2008 Budget to find out that the Government had changed its mind in some way or the other.
Apparently, the U-turn consists of reviving some aspects of the old retirement relief rules. Retirement relief was a capital gains tax relief available to taxpayers who were disposing of their businesses after attaining a certain age, or retiring earlier due to ill health. The way the relief worked was that a certain amount of the gain was exempted from capital gains tax, and any amount in excess of that threshold would attract the tax at the normal rates. The relief could only be claimed once in a taxpayer's lifetime.
The U-turn being proposed now is that taxpayers disposing of their businesses would be entitled to the first £100,000 free of capital gains tax, with the 18 per cent rate to apply to any gains in excess of that threshold. Like retirement relief, the £100,000 can only be claimed once in a taxpayer's lifetime. In effect, it is a 'retirement relief', because if the taxpayer went off and started another business, the relief would not be available to him when he came to dispose of it.
As usual, I will wait until I see the actual detail of the proposal before I comment fully on it.
]]>The charge hasn't been shelved after all. It has reappeared in the Climate Change Bill, which gives local authorities the power to levy the charge.
This means that the Government will be able to distance itself if or when a local authority actually introduces the charge. The Government can claim that the decision to levy the charge was an 'independent' one made by that council.
But will it really be an 'independent' decision? A squeeze on local authority funding by the Government could very well lead to a local council introducing the charge. I wouldn't call that an 'independent' decision by the council.
So forget last week's spin by the Government. The threat of bin taxes still remains.
]]>Here are my predictions:
I discussed the lunacy of such a bin tax some time ago. There are all sorts of reasons why this tax was such a bad idea, not least the public health reasons: taxing people for throwing out rubbish will simply lead to fly-tipping and all the hazards that would follow.
Anyway, according to the Telegraph, Gordon Brown has intervened to scrap the plans, out of fear that they could cost the Labour Party dear in next year's local government elections.
Hmm. So does this mean that the plans could be revived once the danger of the local elections is past? We will find out soon enough.
]]>I mentioned in yesterday's post that, in typical Gordon Brown style, any inheritance tax relief would be 'stingy, complex and extremely difficult and wasteful to administer'.
Stingy: check.
Complex: let's wait and see the paperwork claimants have to fill.
Extremely difficult and wasteful to administer: it shouldn't be too hard to administer this tax allowance, but I will wait until I see the paperwork before I give my conclusion. This, remember, is a Government that never does things the simple way.