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A thread to catalogue the eloquence, dignity, diplomacy and wisdom of Boris Johnson

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I would require that all companies contracting with the UK must be UK domiciled and have no tax-free bolt holes to siphon the profits offshore to evade tax. The recent Covid friends-of-the Tories jamboree is rammed with offshore companies making hay at the tax payers expense. Funny how the TPA never picked up on that.
 
This is where I wonder whether a tiny, but inescapable ‘transaction tax’ on every single transaction would help. So, whether you buy a bar of soap, or a sofa, or a car or house, or invest in your pension, or switch money between accounts, or draw cash from an ATM, or move funds offshore, or buy currency, or whatever, a fraction of a percent of that transaction is taken as tax.
 
I do think there’s a difference between claiming all the allowances, etc, that you are entitled to, and arranging your business affairs in an artificial way (trusts, offshore divisions, etc) that serves no actual business need beyond the avoidance of tax that would otherwise be paid.
Somewhere in between perhaps the Directors of small Ltd companies that elect to pay themselves below NI threshold and take dividends.
As advised by their accountants of course
 
This is true, but when we have political party that are tax avoiders / evaders and are funded by tax avoiders, joe public (the rest of us) have a problem and the burdens of society are not shared.

I do think there’s a difference between claiming all the allowances, etc, that you are entitled to, and arranging your business affairs in an artificial way (trusts, offshore divisions, etc) that serves no actual business need beyond the avoidance of tax that would otherwise be paid.

Corporates and HNWIs seek to offload their tax burden onto the little people. The malignant problem comes when they have a government in power, doing their bidding. He who pays the piper calls the tune and Boris will dance for £275,000 a year as the Barclays have learned. It’s a virtual bargain.
 
Somewhere in between perhaps the Directors of small Ltd companies that elect to pay themselves below NI threshold and take dividends.
As advised by their accountants of course
I thought the rules had changed to include dividends as taxable income ie payable at the 20% rate above the personal allowance threshold etc.
 
That won't work because I have a UK passport, live abroad and have to pay all of my taxes to the country I live in. No taxes are payable in the UK. Does that mean I should not have a UK passport?
If you were a US citizen you’d still pay tax wherever you worked or lived in the world.
It’s the price for US citizenship..
Sounds right to me.
 
I thought the rules had changed to include dividends as taxable income ie payable at the 20% rate above the personal allowance threshold etc.

There’s a NW footballer, much feted in the press as a saint who set up a Manchester property company.
He is sole director.
Companies house records show in 2018 he paid himself way below the tax threshold, around £7K, but the company gave him a £300K+ interest free loan, repayable on demand.
Luvvly jubbly.
 
This is where I wonder whether a tiny, but inescapable ‘transaction tax’ on every single transaction would help. So, whether you buy a bar of soap, or a sofa, or a car or house, or invest in your pension, or switch money between accounts, or draw cash from an ATM, or move funds offshore, or buy currency, or whatever, a fraction of a percent of that transaction is taken as tax.

That runs the risk of being regressive.
 
Not sure how, can you explain how it would be regressive if you design it so you get the same tax take but now transactions that previously escaped taxation are taxed too.
As a collection mechanism it indeed has a built-in, unavoidable mechanism. The thing for me is that taxation, like spending, needs to be targeted. And that it has other aims beyond mere collection. The scale of it hardly touches the accumulation of huge income build-up because a billionaire's purchases, though some will be of a greater magnitude, or even greater in number for some, don't affect the scale of income and saved capital as they do with someone whose income is much lower. Or perhaps you envisage the scale of the purchase tax increasing according to the purchase size or its perceived luxury status? Would that block an ordinary working person who has maybe saved for 30 years from purchasing a house?

A lot of things acquired are also deemed 'gifts' or 'expenses'. So no transaction tax would feature, unless these are reclassified as transactions, but how does anyone ever know? Do I have to declare that a neighbour gave me an expensive amplifier?

You have to 'feel' tax in some sense as tangible because it is the primary driver of currency. It is the thing (like rent for example) driving you to acquire and use the particular currency as an automatic liability. Tax is also a nudge tool, for altering behaviour, so you have to feel that.

I'm sure there's further discussion to be had on this.
 
Not sure how, can you explain how it would be regressive if you design it so you get the same tax take but now transactions that previously escaped taxation are taxed too.

Someone who is on low income may make more frequent regular purchases on essentials (ie not subject to tax, currently) than someone who can afford a big shop (transaction) or tops up their electricty / gas card as opposed to having money to afford to pay less frequently.
 
Someone who is on low income may make more frequent regular purchases on essentials (ie not subject to tax, currently) than someone who can afford a big shop (transaction) or tops up their electricty / gas card as opposed to having money to afford to pay less frequently.
The tax is on the value, not the frequency though. So if you top up your meter with 5x £2 top ups, or 1x £10, you pay the same overall. And the rate, because it would be on everything, would be much smaller than VAT, say, so what they’d pay on currently zero-rated items like food would be offset by what they’d pay less of on VATable items like gas and clothing.

And if billionaires transfer millions to the Caymans, or buy a super yacht, they are taxed at the same rate on every pound as the guy buying his daily paper, or his morning coffee. And the interest they receive is also taxed, as are all the other ruses they use to salt money away. I’m imagining, without having done the sums, that the transaction tax could be less than 1%, if you take it on literally everything. The only way to avoid it would be to pay cash, but drawing out the cash or paying it in would also attract the tax, so unless we reverted to a cash economy, we’d collect it. And it’d probably be easier for the poor to operate a cash economy than the wealthy, so any such loopholes would be likely to help them more anyway.
 
It's interesting stuff. Cash purchases are always generally relatively small. All large purchases are pure credit/debit exchanges. And accountable, well apart from the ones that aren't!
 
There’s a NW footballer, much feted in the press as a saint who set up a Manchester property company.
He is sole director.
Companies house records show in 2018 he paid himself way below the tax threshold, around £7K, but the company gave him a £300K+ interest free loan, repayable on demand.
Luvvly jubbly.
Legal
Morally correct not so much
 
From today's Times

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The tax is on the value, not the frequency though. So if you top up your meter with 5x £2 top ups, or 1x £10, you pay the same overall. And the rate, because it would be on everything, would be much smaller than VAT, say, so what they’d pay on currently zero-rated items like food would be offset by what they’d pay less of on VATable items like gas and clothing.

And if billionaires transfer millions to the Caymans, or buy a super yacht, they are taxed at the same rate on every pound as the guy buying his daily paper, or his morning coffee. And the interest they receive is also taxed, as are all the other ruses they use to salt money away. I’m imagining, without having done the sums, that the transaction tax could be less than 1%, if you take it on literally everything. The only way to avoid it would be to pay cash, but drawing out the cash or paying it in would also attract the tax, so unless we reverted to a cash economy, we’d collect it. And it’d probably be easier for the poor to operate a cash economy than the wealthy, so any such loopholes would be likely to help them more anyway.
You could probably get rid of VAT too, now that we can (a benefit of Brexit?)
 
You could probably get rid of VAT too, now that we can (a benefit of Brexit?)
Indeed. The marginal transaction tax would remove and replace all other taxes. It’d definitely be a benefit of Brexit, if it happened. But it won’t, will it?
 
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