Tax Breaks & beneifts you get that should be scrapped.

[STURBO]

So our government needs to save some cash. It needs to either spend less or tax more, or a bit of both.

Everyone points at other people to get less benefits / pay more tax. But what about your own circumstances?

So what breaks / benefits do you get that are a waste of money / you don't really need.

I'll start.

Bike to Work scheme.
A Bureaucratic waste of time, but one that saved me £400 on my income tax bill and saved paying £200 VAT. Thanks for that! Not that I needed it to make me ride a bike. But other hardworking tax payers funded it, so thanks!

No VAT on bike helmets / etc etc.
How many civil servants / lawyers sit about arguing the toss if an item should be subject to VAT. Total waste of time, just apply VAT to everything. There is no VAT (well only 5%) on electricity. Why apply VAT to petrol but not electricity?

Less tax on Dividends than PAYE income.
Great, so I take most of my company profits this way. Saving heaps of tax. Again, madness. There should be one set of tax rates against all incomes, regardless of whether they are from a job, savings, pensions, dividends etc. Another whole army of people involved ensuring the system gets worked.

So what things do you benefit from / get tax allowances for that you really know should be scrapped?

Sorry, spelling mistake in title.

Edited by STURBO on Monday 4th July 21:08

[loafer123]

Scrap all allowances.

Flat tax, starting high enough to encourage everyone to work. £10k, like the LibDems say, feels right to me.

Same rate for business, so contractors and corporates can't dodge.

Simple.

[Carfiend]

errr...... none.

[HarryW]

I think the answer lays somewhere in the question; Has the tax take decreased dramatically or are the tax recipients just spending too much?

[mrmaggit]

loafer123 said:

Scrap all allowances.

Flat tax, starting high enough to encourage everyone to work. £10k, like the LibDems say, feels right to me.

Same rate for business, so contractors and corporates can't dodge.

Simple.

Yup. I'd go with that, but start at £12,000 a year. And no benefits paid out over that amount, per person, per year; unless you are registered disabled.

We have two people in our office that I'd class as disabled, one has one leg, the other broke his leg so badly four years ago, that he still has a stick to walk with. Neither claims disability allowance, except for the chap with one leg, who does claim for his prosthetics, but that's all. So what are all these disability claimants actually disabled with?

And taxes paid at source, prior to receiving the money, based on money earned here, for everybody, including all foreigners.

VAT payable on everything except safety wear, but not applicable if there is already a tax on that item. You only pay ONE lot of tax, not tax on a tax.

[Welshbeef]

loafer123 said:

Scrap all allowances.

Flat tax, starting high enough to encourage everyone to work. £10k, like the LibDems say, feels right to me.

Same rate for business, so contractors and corporates can't dodge.

Simple.

Well what if you have a company and pay yourself £9999 so no PAYE then you also pay yourself £9999 dividend.
Tax free. You have a wife who doesn't work you make her a share holder so pay her a £9999 dividend tax free, you even employ her to do filing for £9999 too so that's essentially £40k tax free. A very basic workaround.

[loafer123]

Welshbeef said:

Well what if you have a company and pay yourself £9999 so no PAYE then you also pay yourself £9999 dividend.
Tax free. You have a wife who doesn't work you make her a share holder so pay her a £9999 dividend tax free, you even employ her to do filing for £9999 too so that's essentially £40k tax free. A very basic workaround.

Your income would be £19,998 so you would pay tax on £9,998.

Your wife could get her first £10k tax free, but would pay tax on income after that.

[V88Dicky]

Child benefit. I don't expect anyone else to pay for my offspring, why should I pay for the spawn of the dregs of humanity?

[thinfourth2]

Considering almost 50% of everything i earn goes into the blackhole that is government spending i really don't think i need pay any more tax.

But as an idea why do government employees pay income tax?

Surely it would be easier to drop their wages by 30% and remove them from the tax system which they get paid from anyway

[STURBO]

thinfourth2 said:

Considering almost 50% of everything i earn goes into the blackhole that is government spending i really don't think i need pay any more tax.

But as an idea why do government employees pay income tax?

Surely it would be easier to drop their wages by 30% and remove them from the tax system which they get paid from anyway

Problem then is that when you raise income tax / NI then that group are protected from those rises. But I see what you mean.

[Welshbeef]

loafer123 said:

Your income would be £19,998 so you would pay tax on £9,998.

Your wife could get her first £10k tax free, but would pay tax on income after that.

But the taxation on dividends is less than PAYE currently to encourage investment in stock exchange.

Tax can be used to encourage the sensible behaviour ie lower tax on savings interest l
Tax breaks on pension investment - logic being its cheaper to invest tax layers money like that than if they didn't have a pension.

[ewenm]

V88Dicky said:

Child benefit. I don't expect anyone else to pay for my offspring, why should I pay for the spawn of the dregs of humanity?

That's the only benefit we receive and I don't really understand why we get it. But then, as responsible adults, we didn't have a child until we felt we could afford it without any help. However, while it exists we'll keep receiving it, it doesn't eat very far into our annual household tax balance-of-payments

[cymtriks]

All of them.

Then replace with:

• One tax free allowance for all forms of income
• One rate of tax for all forms of income
• One flat rate benefit that everyone over 18 gets (but only if they have lived in the UK for three years)
• additional benefits related to circumstances and/or how much you have paid in via tax

So no more means testing, no more benefit trap (you are always better off if you work, you never lose benefits for working), educational grants are effectively restored (students get the basic flat rate like everyone else), housewives are paid (they get the basic rate like everyone else), making your situation worse will never get you more benefits unless you pay more in via tax first. Simple. Easy to understand. No more employers being concerned over maternity pay (it goes along with all the existing benefits) so less covert discrimination.

Why not?

[loafer123]

Welshbeef said:

loafer123 said:

Your income would be £19,998 so you would pay tax on £9,998.

Your wife could get her first £10k tax free, but would pay tax on income after that.

But the taxation on dividends is less than PAYE currently to encourage investment in stock exchange.

Tax can be used to encourage the sensible behaviour ie lower tax on savings interest l
Tax breaks on pension investment - logic being its cheaper to invest tax layers money like that than if they didn't have a pension.

Which bit of "flat tax" is confusing you exactly?!

The same rate, corporate, dividend, income, CGT, the lot.

It will make alot of accountants unhappy, but recovery would be alot better and the rate alot lower than you expect. Easy to catch cheats, easy to administer.

[Du1point8]

loafer123 said:

Welshbeef said:

loafer123 said:

Your income would be £19,998 so you would pay tax on £9,998.

Your wife could get her first £10k tax free, but would pay tax on income after that.

But the taxation on dividends is less than PAYE currently to encourage investment in stock exchange.

Tax can be used to encourage the sensible behaviour ie lower tax on savings interest l
Tax breaks on pension investment - logic being its cheaper to invest tax layers money like that than if they didn't have a pension.

Which bit of "flat tax" is confusing you exactly?!

The same rate, corporate, dividend, income, CGT, the lot.

It will make alot of accountants unhappy, but recovery would be alot better and the rate alot lower than you expect. Easy to catch cheats, easy to administer.

So there would be no point in having pensions as its not a tax break and that would put more weight on the state in 30-40 years time when this crop of staff become pensioners but due to your flat rate scheme there was no incentive to save for the future when not working.

[BoRED S2upid]

I don't get anything.

[V88Dicky]

anonymous said:

[redacted]

And therein lies the problem.

A bit like ditching VED, the DVLA would have to lay off tens of thousands.

I'm sure some of these taxes have become the sole reason that some large Government departments exist!

[Amateurish]

Have (as a couple) received the following in the last 12 months which could easily go:
Health in pregnancy grant
Healthy Start payments (mental)
Child Trust Fund (now scrapped)
Warmfront grant (stupid)

We got WTC and CTC also which is a stupid, complicated, illogical, ridiculous system and must cost an absolute fortune to administer.

[RYH64E]

Welshbeef said:

Well what if you have a company and pay yourself £9999 so no PAYE then you also pay yourself £9999 dividend.
Tax free. You have a wife who doesn't work you make her a share holder so pay her a £9999 dividend tax free, you even employ her to do filing for £9999 too so that's essentially £40k tax free. A very basic workaround.

Don't forget that before you pay a dividend you will have had to pay Corporation Tax on all of your profit, whether you take it as income or not, so not exactly tax free.

[Welshbeef]

RYH64E said:

Don't forget that before you pay a dividend you will have had to pay Corporation Tax on all of your profit, whether you take it as income or not, so not exactly tax free.

Very true.

As such if a company owner chooses to take his salary via dividends instead of PAYE shouldnt the divi tax be at a lower rate to account for the cort tax? Else they are paying more...

If not and assuming NI is rolled into income tax then clearly noone would take a salary via dividends so corp tax take would reduce notably and possibly the net of income tax + cort tax would be less than cort tax+divi tax