Express.
VAT must be slashed by at least five per cent to kickstart Britain’s struggling economy, chiefs of small businesses warned in a report yesterday.Yes I know we can't really do anything about VAT at least not until we leave the EU (please, please) but frankly the whole tax situation in the UK is an utter mess anyway, it needs simplifying more than anything. Move all tax into one category, get rid of VAT, national insurance and any other extras and keep it simple. Same with benefits have one universal benefit/pension and run it via the inland revenue as a negative tax code. Yes you can have various levels in it depending on invalidity etc but these are additions via a tax code rather than a separate system. As for rates, go for a land value tax rather than council taxes, the more your land is worth, the more you pay.
The leaders of the nation’s small businesses – which make up 99 per cent of all firms in the UK – lobbied ministers after it emerged that business confidence has tumbled in the three months to June.
If VAT is not cut to 15 per cent Britain’s recovery will falter, said the Federation of Small Businesses.
Hard-pressed consumers are simply not spending as much when almost all purchases carry 20 per cent VAT.
The construction and tourism sectors in particular are suffering, as are car retailers.
The federation, which represents firms typically employing fewer than 49 staff, says such VAT cuts would help boost consumer spending and help to create new jobs.
Greater spending could make up for lost revenue to the Treasury. John Walker, chairman of the FSB, said: “The economy is still in a fragile state and these figures show the Government’s growth strategy is just not working.
It's way past time that the whole idea and implementation of taxation is looked at in the UK, it needs simplifying and streamlining and it wont happen whilst we're in the EU.
Just another reason to leave, really.
2 annotations:
Great post...
I've long thought that it is ludicrous to have so many tax collecting systems employing millions... The saving could be enormous if it were simplified...
As you mention tho, VAT is an EU mandated tax and will never go away while the UK is in.
The purpose of a tax is to raise money for the Government in the most efficient, least expensive and least distasteful manner possible. So, taxes ought to be hard to dodge, easy to pay and above all, simple.
So, get rid of Inheritance Tax simply because it is so universally despised. Get rid of VAT and apply sales taxes instead to remove the possibility of carousel fraud. Apply a flat tax to income and capital gains and explain carefully to the hard-of-thinking that 25% of a small salary is less than 25% of a large salary (i.e. the rich really do pay more tax than the poor).
This is probably way too sensible for the British Government, especially as a radical pruning of the tax system would render thousands of pen-pushers redundant, but I can dream...
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