It has been a very busy few weeks for the TPA grassroots. Last week I attended the inaugural meeting of our new Birmingham Branch. The branch will be holding an action day on 15th June. More details to follow, but if you would like to help, please let me know.
Regular readers of this website will also know that we have a new coordinator in Islington. His name is Henry Zarb, and if you have any stories you would like to share with him, he will be delighted to hear from you.
We are also holding two supporter social evenings next week. The first will be in Cardiff, where I will be joining our Wales Coordinator, Lee Canning, at The Queens Vaults, 29 Westgate Street, Cardiff City Centre, at 7.30pm on Tuesday 21st May. Lee has some great ideas for new campaigns in Wales and would love to hear from you. If you can make it next Tuesday, please let Lee know. It will be great to see you there. Continue Reading
Writing for City A.M. today, I said that we need comprehensive tax simplification from politicians, not more hot air:
THE Public Accounts Committee offered about as much to the debate on tax avoidance yesterday as a hot air balloon offers transport. No clear direction, not a lot of movement, but a lot of hot air.
Instead of a critical dissection of how the system works, and an examination of what might be done to fix any problems, the committee’s chair Margaret Hodge railed angrily against companies like Google operating under the law as it stands, rather than by using her understanding of “common sense”. That’s no substitute for the serious reform we need if we want a tax code that’s fit for purpose.
The TaxPayers’ Alliance has today released a new video highlighting how the UK’s taxes on people’s wages are needlessly complex and obscure. Produced with the team from See what you mean, the video highlights how National Insurance is a second income tax in all but name.
Previous YouGov polling for the TPA has shown that many people are not aware of how much tax they actually pay. The video makes clear the real rates of tax people pay when Employee’s National Insurance and Employer’s National Insurance are factored in.
Basic: Employer’s NI 13.8 % + Income Tax 20 % + Employee’s NI 12% = 40.2%
Higher: Employer’s NI 13.8 % + Income Tax 40 % + Employee’s NI 2% = 49%
Additional: Employer’s NI 13.8 % + Income Tax 45 % + Employee’s NI 2% = 53.4 %
(See below for an explanation of the combined rates)
Polling has also shown that most do not understand the impact of Employer’s National Insurance, which effectively reduces their wages.
Last year the TPA set out how to abolish National Insurance by 2017, which would make the tax system simpler and more transparent. At the 2011 Budget, the Chancellor indicated a desire to merge Income Tax and National Insurance, which Mr Osborne said would be a “historic step to simplify our tax system and make it fit for the modern age”. Unfortunately, the Treasury has thus far failed to publish the work of the Office for Tax Simplification on this topic or come up with any solid proposals.
Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“Taxing the same income three times is a pointless complication which only benefits politicians trying to conceal how much tax people really pay. National Insurance has been nothing more than another Income Tax for years and additional redundant taxes mean higher administrative costs for businesses. The Government can and should merge them into a single tax which would be simpler, fairer and more honest.”
**Calculations** Employer’s National Insurance is added at the rate of 13.8% on top of gross salary. So if you’re paid another £87.87 of gross salary, the employer has to pay an additional 13.8%, which would be £12.13, That adds up to £100.
Conwy council in North Wales claims that “lessons have been learned” after a bridge rebuilding project in Llandudno went £1m over budget. The Maesdu Bridge, which has even been described by Independent councillor Dave Cowans as “value for money” is one of the main transport links into the Conwy town. The bridge underwent a complete rebuild and was reopened in September 2010, however a report into the scheme has highlighted significant failings within the management of the scheme.
A report on the overspend, which was discussed by the principal scrutiny and overview committee, said that previous issues had now been addressed but the overall cost of a project this size wasn’t unreasonable. Continue Reading
Reacting to Thursday’s evidence at the Public Accounts Committee, Matthew Sinclair, Chief Executive of the TaxPayers’ Alliance, said:
“Yet again the Public Accounts Committee has offered stinging criticism of individual companies but no progress on the root cause of the problem, our broken tax system. Politicians are responsible for our hideously complex tax code and it’s up to them to simplify it to ensure that everyone pays their fair share, no more and no less.
“Until the system is simplified, HMRC will always face an uphill struggle against a 17,000-page tax code, which is full of loopholes being legally exploited by those with clever accountants and tax lawyers. We need serious and comprehensive tax reform, not empty moralising.”
The TaxPayers’ Alliance (TPA) proposed a comprehensive simplification of the tax system in the 2020 Tax Commission, a joint project between the TPA and Institute of Directors (IoD). The final report of the commission, The Single Income Tax, can be found here.