Preparedness for when

Perplexed_Pineapple

Thanks to CTC for the interesting link. The bit which worries me is this bit:

Tax administration changes

Simple Assessment Following the consultation announced at Spending Review and Autumn Statement 2015, the government will legislate to provide a new power to allow HMRC to make an assessment of a person’s Income Tax and Capital Gains Tax liability without them first being required to complete a self-assessment return and where it has sufficient information about that individual to make the assessment. (Finance Bill 2016) 2.212

So, rather than requiring you to provide accurate information about your income etc, HMRC will be able to issue a statement of liability based on any assumptions they care to make, and it will be up to you to prove they are wrong? That sounds dangerously totalitarian to me :eek:

GreyQueen

Nothing new to HMRC about that in principle, PP.

It's long been the case that where an individual is obliged to provide a tax return and declines to do so, HMRC just pluck a random (high) figure out of the air and bill them for that. If they can't prove otherwise, that's what they have to pay.

My pal once needed a 6 figure number to do one of these for a company director who was being recalcitrant. Used a well-known number, my landline (as was then). It started with 7 :rotfl:

In an environment where real costs are rising year on year, and real wages stagnant or falling, quite a few people have to hustle for a side gig to get by. That might by a bit of buying and selling, which may or may not be online. It might be a small second cash-in-hand job.

Monies so earned do not disappear out of the economy, it's just moving around. The money is earned, not printed, such as central bankers do. It is exchanged for goods and services in the Real World, and contributes to the profitability of real businesses who do pay taxes.

If person A does person B's garden for a couple of tens, and then buys a couple of pints of beer at the weekend, and some extra food, and maybe a magazine, that's all real economic activity. If the gardening stayed un-done, none of that would be possible.

Look around you at the real world economy. Nobody needs to buy enough clothes to wear a different outfit every day for 3 months, more shoes than a centipede, boxed sets of DVDs, perfumes, holidays etc. All these things are wants, nice to have but not essential.

What's happening now is that a significant number of people are only able to fund the essentials, and some of those are a stretch, which means that the bulk of the retail and leisure sector is going to feel the pinch.

Frugalsod

GreyQueen wrote: »

Monies so earned do not disappear out of the economy, it's just moving around. The money is earned, not printed, such as central bankers do. It is exchanged for goods and services in the Real World, and contributes to the profitability of real businesses who do pay taxes.

If person A does person B's garden for a couple of tens, and then buys a couple of pints of beer at the weekend, and some extra food, and maybe a magazine, that's all real economic activity. If the gardening stayed un-done, none of that would be possible.

Firstly central banks barely print money as much as the internet would suggest. Around 95% is created by the average high street bank, and more than 85% of this is used to finance house purchases which explains why we have a housing bubble and businesses struggle to get credit to expand. Though the Bank of England did create hundreds of billions during the crisis but this did !!!!!! all because it was mopped up by the banks to keep them solvent and then to inflate that property bubble still further because of the wealth effect, which sounds logical in theory but does not exist in reality.

You are completely right about the small transactions that people do among themselves to get things done. Much of any black market work that someone might pay to get a job done eventually ends up back in the real economy as people pay for food or drink. This is the basis of Keynesian spending policy. The government pays people to do things and as they earn money they can get out and buy things. The real trick is to give it to the poorest people as they will spend it all. If you give it to a billionaire it just goes into the bank. Unfortunately if you give it based to taxes paid you give it to the rich and so it will have very little impact. This is when they are deliberately misguiding policy to destroy its use as an option in future. This was why the US stimulus plan was not really successful. It was too small and targeted at the rich.

GreyQueen

Exactly. If someone in the lowest deciles of the economy gets a few extra tens a month, it's very likely that it will be spent. Give a similar or even far greater amount to the upper deciles, and it is likely to go into things which are ultimately destructive of the common weal, such as property price inflation/ landlordism/ overseas travel.

Also, many of things which happen on the black wouldn't be done if taxed, because they're done for not much money at all, and a tax gouge would leave them at kiddy pocket money levels, and not worth the candle.

Governments suffer from normalcy bias; their members are drawn from the most privileged in society and they think that how they live is normal. They don't know what everyday life is like for the majority, they won't listen to those who try to tell them, and they don't care (with a few noble exceptions) to do more than enrich their own cohorts.

I suspect more of us will revert to barter to avoid them, as well as insourcing many things.

Frugalsod

GreyQueen wrote: »

Governments suffer from normalcy bias; their members are drawn from the most privileged in society and they think that how they live is normal. They don't know what everyday life is like for the majority, they won't listen to those who try to tell them, and they don't care (with a few noble exceptions) to do more than enrich their own cohorts.

One idea I had which would solve such a problem is an income cap for MP's both before and after entering the House of Commons. Limit the income of any prospective MP to no more than twice the median salary. This would prevent high earners rigging the policy debate. With median incomes only around £26 000 it would exclude anyone trying to get in with an income of £52 000 or more, which is still more than 95% of us. Then it would also cap the Prime Ministers salary at £52 000. So if he won £1000 on the lottery he would go over the income threshold and be forced to resign and a bye election would be held. This would mean that the MP's would have identical problems to many people trying to rent or buy a home in London. They might actually have a motive to do something for the population rather than a very small slice at the top.

GreyQueen wrote: »

I suspect more of us will revert to barter to avoid them, as well as insourcing many things.

If the banks do collapse then barter will be the only option for a while.

thriftwizard

The world has suddenly ceased to make sense - apparently IDS has resigned, citing the benefit cuts... IDS resigns

The cynic in me thinks he's seeing just how desperately unpopular the cuts are and is trying to distance himself from a government that seems to be following its dogma so faithfully that it's completely lost the plot.

NewShadow

Frugalsod wrote: »

One idea I had which would solve such a problem is an income cap for MP's both before and after entering the House of Commons.

I think you might find this interesting: http://www.theguardian.com/commentisfree/2011/jun/25/mps-pay-underpaid-corporate

I think MPs should be paid more and the expenses system cleaned up. Give them a basic of say, 150,000 per year and then "normal" expenses on top i.e. present a receipt for an expenses that as clearly incurred due to their work.

For some reason many people seem to think that MPs should be paid the average national wage, on the face of it a compelling argument - see how they scape to get by like everyone else. The problem with argument is that you will then end up with a HoP almost entirely composed of the wealthy retired or those with private means, people who can afford to maintain a lifestyle and still sit as an MP.

Imagine a 35 year old doctor, lawyer or company director, probably earning well north of 100k, they might have a genuine desire to be a politician, to serve their country and represent their constituents. Unfortunately they also might have a mortgage and a young family to support - being an MP should be enticing enough to attract the best candidates irrespective of family wealth

What we really need is for the state to pay MPs better than anything else. And then they need to be paid very well for the rest of their lives. On condition that they do nothing else when standing for parliament, in parliament and certainly nothing else afterwards (or they can but they lose their golden goodbye) Why? So that MPs are less influenced by lobbying and promises of jobs, positions and glory afterwards.

We need legislators that are able to stand up to the corporate capture of all political parties that is currently taking place. We need people who are immune from the influence of money.Then perhaps they will consider the plight of those without any.

From the comments - I don't completely disagree.

nuatha

Perplexed_Pineapple wrote: »

Thanks to CTC for the interesting link. The bit which worries me is this bit:

Tax administration changes

Simple Assessment Following the consultation announced at Spending Review and Autumn Statement 2015, the government will legislate to provide a new power to allow HMRC to make an assessment of a person’s Income Tax and Capital Gains Tax liability without them first being required to complete a self-assessment return and where it has sufficient information about that individual to make the assessment. (Finance Bill 2016) 2.212

So, rather than requiring you to provide accurate information about your income etc, HMRC will be able to issue a statement of liability based on any assumptions they care to make, and it will be up to you to prove they are wrong? That sounds dangerously totalitarian to me :eek:

As GQ said, this isn't actually new. It's an overdue update of existing laws. It does sound dangerously totalitarian but its no more totalitarian than much of the existing system.

thriftwizard wrote: »

The world has suddenly ceased to make sense - apparently IDS has resigned, citing the benefit cuts... IDS resigns

The cynic in me thinks he's seeing just how desperately unpopular the cuts are and is trying to distance himself from a government that seems to be following its dogma so faithfully that it's completely lost the plot.

I'm fairly sure the timing has more to do with the EU referendum than suddenly finding a conscience but I could be wrong.
I'll freely admit the statement came as a pleasant surprise, whether it will actually change anything - there's been hints since Question Time last night that the policy could be changed. Makes the timing of IDS's announcement even more curious.

NewShadow wrote: »

I think you might find this interesting: http://www.theguardian.com/commentisfree/2011/jun/25/mps-pay-underpaid-corporate

From the comments - I don't completely disagree.

I have more than a little sympathy with this approach - but I would then make it impossible for sitting MPs to have external jobs and expect a fuller working year - though that might be a problem in itself given the amount of damage they can do to the country in the relatively short number of working hours/weeks they have.

GreyQueen

Hi, my name is GQ and I seem to have woken up in a parallel universe where a Tory monster has developed an attack of conscience and actually been quoted as saying things which were true, sensible, moral and decent.

And then resigned.

????????????????????????????????

Gorblimey, IDS, too little too late, I'd still prefer to have woken up to news of your assassination, but it's still a happy start to a Saturday. Now all I need is news of Eric Puckles' spontaneous combustion and my cup of joy will runneth over.:rotfl:

Am entirely in agreement with pols having their income, present and future, capped. I'd cap it at a low multiple of minimum wage, though. And they should be paid for the hours they do, and thus would only have a part-time salary. If they want more, they can go out cleaning windows/ weeding flowerbeds/ dog-walking and declare it for tax purposes, natch.

Today is am important day in the gardening world; I shall be planting the first lot of potatoes. Maris Peer second earlies. I'm not well enough to plant all 3 bags of spuds at once, so will reserve the Desiree main crop until after Easter.

pineapple

GreyQueen wrote: »

Today is am important day in the gardening world; I shall be planting the first lot of potatoes. Maris Peer second earlies. I'm not well enough to plant all 3 bags of spuds at once, so will reserve the Desiree main crop until after Easter.

Oooh I'm jealous. Still at the stage of making the cottage habitable but the garden is calling. Unfortunately we don't have a decent garden centre in miles - heck you have to travel nearly 20 miles just to get a pair of knickers :eek:. So Pineapple is drawing up a list for the mammoth expedition that will be the trip to the garden centre. Meanwhile she bribed the farmer next door to transport from the village green a section of tree trunk that was deposited by the floods. Going to use it as a planter. It looks luvverly even just with a pot of dead daffs in it :rotfl: