What is the difference between Heaven & Hell

harryhound

Who remembers this good old "joke":

In Heaven, the cooks are French, the engineers are German, the Civil Servants are British, the lovers are Italian and the bankers are Swiss.

In Hell, the Engineers are French, the lovers are Swiss, the cooks are British, the Italians are running the Civil Service and the Yanks have wrecked the banking system.

Well it is not true any more is it?

Our civil service seems to be run by a bunch of spineless yes men.

When Gordon Brown decided to pay benefits through the tax system, I thought the idea right in principle.
When he then boasted that the staff numbers of HMRC were to be cut significantly at the same time as the tax code was expanded to the most complex in the world, I knew there was trouble ahead.

This outcome has been like watching a slow motion train crash as more and more incompetence has been revealed.
A command and control computer system imposed on clerks and the citizens alike is not the way to extract "the most feathers with the least squawking". It is the sort of system devised for a Soviet Russian colony; where the citizens pretended to work and their rulers pretended to pay them.

There never has been a golden age of tax collection.
I still have a correspondence, debating the subtly of the difference between earned income and investment income, together with the tax reclaim for interest charged on a mortgage as against that on an overdraft. (But at least you got a reply to your letters in a previous century).

However what I do know is that tax paid to central government, local authorities and the EU is mopping up half of our national income, nearly double the share needed to govern us in the 1960's.

Hands up those who feel twice as well governed as their parents were ?

It is time that the front line staff at HMRC stiffened their resolve to shout at their own bosses, perhaps via their union, rather than retire into their current bunker mentality.

Don't mess about, your job design is threatening your health.

jimmo wrote: »

If you are desperate for your money then don’t mess about. Complain to your MP.
There’s a very slim chance that your MP can get things done quickly but anything else is, quite frankly, bashing your head against a brick wall.
Just to give you an idea of what you are up against and using dori2o’s timing, if you sent the required information at the beginning of June it would have taken your letter 12 weeks to get to the top of the pile. Let’s call that 3 months, so beginning of September for action to be taken. It is almost certain that the information you have given will need to be checked with your employer and the person dealing with your letter will write to another HMRC office which deals with your employer. Another 3 months, December, and HMRC will write to your employer.
Even if your employer replies by return of post it will take another 3 months, March 11 before your employer’s office writes to your tax office.
Then it will take another 3 months, June 11 for your tax office to deal with that.
So, if all goes well, there seems to be a fair chance you will get your repayment the following month, July 11. If all does not go well, “how long is a piece of string?” doesn’t come close.
Going back to the old days of allocations mentioned by dori2o, the Allocation Officer was responsible for a number of employers and all their employees.
If your claim was genuine, the Allocation would probably know the score and process the repayment on sight. Equally, if you were trying it on, you would almost certainly get a GS (Get Stuffed) letter in pretty short time.
Quite frankly, you have 2 choices.
1) Sit back and allow the due processes to process.
2) Play merry hell with your MP for the mess that a once proud Department has become.
Unfortunately most people in your situation seem to take the middle ground and take out their frustrations on the HMRC front-line staff and get nowhere

CLAPTON

Indeed

we need a grossly unfair but simple tax system

harryhound

What was grossly "unfair" about the tax system in the 1960's ?

I do know that a much larger number of hard working people paid no:
Income tax
Death Duties.
Capital Gains Tax
VAT
Petroleum revenue tax
Stamp duty
Insurance tax
Aircraft flight tax
Council tax - then called rates.
Corporation tax
Company car tax
and that is off the top of my head.
Admittedly in place of VAT there was something called Purchase Tax that was levied on "luxuries"; new car prices were about 1/3rd tax if I remember correctly and cigarette lighters had to be smuggled in from France.
Pools winners and pop stars complained like mad about having to go and live in the Channel Islands or France; to get away from penal levels of Income Tax. Tycoons simply had good accountants that turned income into capital.

The fact remains that British standards of living and productivity was similar to current day Poland, without the technical progress of the last 50 years. The country had been investing for 15 years in rebuilding the ravages of war.

Since then there have been tremendous technical and economic developments, mainly thanks to North Sea oil, but where has 50% of this increased wealth gone?
By taxation into government coffers.

CLAPTON

What I mean is that 'simple' systems are usually perceived as being very unfair; whether with the benefits system or taxation system.
So a single rate of taxation of (lets say) 35% (including NI) would be simple; but say some-one working partttime earning 6000 pa would go from zero deductions to paying 2,100 whilst the guy earning 100,000 would be a gainer.

I'm afraid I'm not an expert on the sixties but I think basic rate taxation was much higher today; your list seems a little bizarre to me.

In any event the general level of government spending and the complexity of the tax system are different matters.

John_Pierpoint

No iff's no butts all done on one page.:
Personal Income Tax
Corporate Income Tax
Social Taxes
Personal income tax is levied at a flat rate of 21%. Each individual receives an annual personal allowance of (name your figure say 21% of the average income)(2010). This allowance is set to rise in 2011 and again in 2012.
The rate of corporation income tax is 21% on gross distributed profits. The rate has gradually fallen from a high of 26% in 2004, and is set to be reduced to 18%
Employers pay Social Tax on payments made in cash (or kind) to all employees. Employees do not pay Social Tax – employers pay the tax for them. Sole proprietors must pay the tax themselves. The rate of social tax is 33%, apportioned 20% to social security and 13% to insurance.

Capital Gains Tax
Property or Wealth Tax
Stamp Duty
There is no separate capital gains tax as such. Any taxable gains are taxed as normal personal or corporate income, at 21%.
Property owners are liable to pay an annual municipal Land Tax based on the market value of the land. The rate varies between 0.5% and 2.5%. Profits from the sale of most property are taxed at 21% of the net proceeds.
Stamp Duty is only payable on some contracts and is by way of a small, fixed fee. No Stamp Duty exists for property transactions.

VAT 20%

Sorry it is still more than double the Medieval tithe !

I wonder if anyone has crunched the figure: Let us assume that the Government is a charity to which we are all forced to pay 50% of the country's income.
Let us pretend that everything the government produces is a valuable charitable output (yes even bailing out bankers and shooting the citizens if someone else's country and subsidising the Royal Opera House).

What percentage of our donations get used for administration before any gets spent on charitable works.
(Sorry local government and the EU needs to be added to this scenario.)

What percentage of our donations are spent by the donors accounting for (and trying to avoid) their donations?

What is the opportunity cost of having some of the country's top graduate's administering this giant charity exercise ?

CLAPTON

John_Pierpoint wrote: »

No iff's no butts all done on one page.:
Personal Income Tax
Corporate Income Tax
Social Taxes
Personal income tax is levied at a flat rate of 21%. Each individual receives an annual personal allowance of (name your figure say 21% of the average income)(2010). This allowance is set to rise in 2011 and again in 2012.
The rate of corporation income tax is 21% on gross distributed profits. The rate has gradually fallen from a high of 26% in 2004, and is set to be reduced to 18%
Employers pay Social Tax on payments made in cash (or kind) to all employees. Employees do not pay Social Tax – employers pay the tax for them. Sole proprietors must pay the tax themselves. The rate of social tax is 33%, apportioned 20% to social security and 13% to insurance.



Capital Gains Tax
Property or Wealth Tax
Stamp Duty
There is no separate capital gains tax as such. Any taxable gains are taxed as normal personal or corporate income, at 21%.
Property owners are liable to pay an annual municipal Land Tax based on the market value of the land. The rate varies between 0.5% and 2.5%. Profits from the sale of most property are taxed at 21% of the net proceeds.
Stamp Duty is only payable on some contracts and is by way of a small, fixed fee. No Stamp Duty exists for property transactions.

Interesting..

I don't really understand the scope of many of your suggestions but just taking income tax and NI.
It would appear that for the same total tax take, the current 40/50 % tax payers would be much better off and so those earning less would be less well off.

some would see this as unfair

John_Pierpoint

Yes I thought the combination of income tax and NI appeared to be particularly hard on sole proprietors at 54%.
The tax code is obviously intended to encourage high value added business with relatively low wage content. Companies are only paying social security and a dividend witholding tax.
Perhaps the intention is to become a centre of banking for the interface between the Russian empire and the European Union.

So which country and competitor of our's is it?

noh

John_Pierpoint wrote: »

...........So which country and competitor of our's is it?

Estonia?..

John_Pierpoint

Top of the class!

I believe Estonia's tax system was set up by the "Chicago school" of economists.

Mind you it did not save them from the property boom and bust.
A lovely little place that it is it won't be another Luxembourg for the other over taxed members of the EU because of its climate.

Just along the Baltic from St Petersburg it suffers from the same Russian climate problem:
Ten months of expectation and then two months of disappointment.:D

Monaco is getting a bit crowded these days.

John_Pierpoint

Any reports on how Estonia is getting on these days?

Not in the Hungary class and paying 11% on its National Debt?