Category Archives: News & Comment

Tax doesn’t have to be taxing

Readers of a certain age will recall the title of this piece was a slogan coined by Her Majesty’s Revenue & Customs for an advertising campaign some years ago. They were trying to explain that dealing with your tax affairs needn’t be a complex thing—and to an extent, over the past few years or so, this has proved to be the case.

I am self-employed. I’m a sole trader. I have been such on and off for the past 16 years or so. As one of this growing band of entrepreneurs I must fill out a self-assessment tax form each year. Should I be so lucky as to have had a good financial year and ticked over the minimum income tax threshold, then I dutifully cough up what I owe—as well as half of what HMRC think I might owe next year. Don’t ask.

Anyway, the current bunch of cretins in charge of this fair country decided it would be a spiffing wheeze if we “hardworking” [sic] self-employed types should perform the annual tax return ritual four times a year. You can type the words “tax returns four times a year” into your preferred search engine to find any number of stories about it. Somewhat unsurprisingly, a lot of we “hardworking” [sic] self-employed types were a little upset by the notion, and an online petition was started. Of course I signed it.

Anyway, this last week the signatories received the following email from the Powers That Be:

The Government has responded to the petition you signed – “Scrap plans forcing self employed & small business to do 4 tax returns yearly”.

Government responded:

Making Tax Digital will not mean ‘four tax returns a year’. Quarterly updates will largely be a matter of checking data generated from record keeping software or apps and clicking ‘send’.

These reforms will not mean that businesses have to provide the equivalent of four tax returns every year. Updating HMRC through software or apps will deliver a light-touch process, much less burdensome and time-consuming than it is today.

At the March 2015 Budget the government committed to transform the tax system by introducing simple, secure and personalised digital tax accounts, removing the need for annual tax returns.

At the 2015 Spending Review the government announced it would invest £1.3bn in HMRC to make this vision a reality, transforming HMRC into one of the most digitally advanced tax administrations in the world.

One element of this vision will be asking most businesses, self-employed people and landlords to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account.

Many taxpayers have told HMRC that they want more certainty over their tax bill, and don’t want to wait until the end of the year, or even longer, before knowing where they stand with their taxes.

We also estimate that £6.5bn in tax goes unpaid every year because of mistakes made when filling in tax returns. These reforms will make it easier for taxpayers to maintain accurate and up-to-date tax affairs, reducing the scope for error.

With businesses keeping track of their tax affairs digitally, quarterly updates will be fundamentally different from filling out an annual tax return in a number of crucial respects:

  • Quarterly updates will not involve all the complexity of a full tax return. The updates will be generated from existing digital business records. In most cases, little or no further entry of information will be needed. It will be much quicker to complete than the current tax return.
  • As part of the process the business owner or individual will receive a developing in-year picture of their tax position, helping people have greater certainty about what they owe, allowing them to plan their finances more effectively. This differs from the current system where many taxpayers are caught out by their tax bill when it finally arrives.
  • In-year updates will not be subject to the same sanctions for lateness or inaccuracies as apply now to the year-end position. HMRC will consult during 2016 on what sanctions might be appropriate for a more digital tax administration.

The government has already announced that these measures will not apply to individuals in employment or pensioners, unless they have secondary incomes of more than £10,000 per year from self-employment or property.

The reforms will rely on businesses, self-employed people and landlords using software or apps that can connect securely to their digital tax account. The government will ensure that free products are available. The Gov.UK service will signpost taxpayers to the right product, with clear HMRC guidance about how to choose software.

HMRC will ensure support is available for people to get online if they need it. We will also provide alternatives for those who genuinely cannot use digital tools, like telephone filing. This will build on our Needs Extra Support service, which has gone from strength to strength in helping more vulnerable customers.

We’re introducing these reforms gradually. We’ve been in discussion with stakeholders since March 2015 and will be consulting on the details of the proposals throughout 2016.

We will use volunteers to test the new tools and processes and give us feedback. Quarterly updates will be introduced for some from 2018, and will be phased in fully by 2020, giving taxpayers time to adapt.

We want to work with all stakeholders to ensure these changes work for them. For more information about the proposed reforms please search for ‘Making Tax Digital’ on Gov.UK or use the following link:

https://www.gov.uk/government/publications/making-tax-digital

HMRC

That’s a lot of words effectively saying “stop your whinging and just get on with it”.

In case you glazed over, the important bit—for me at least—was this: “Making Tax Digital will not mean ‘four tax returns a year’. Quarterly updates will largely be a matter of checking data generated from record keeping software or apps and clicking ‘send’.“.

Oh, okay. So what they’re saying is I will have to actually start keeping proper accounts with proper software, rather than maintaining a simple spreadsheet and a box full of receipts which has hitherto been quite adequate. Am I expected to spend money on this software?

“The reforms will rely on businesses, self-employed people and landlords using software or apps that can connect securely to their digital tax account. The government will ensure that free products are available. The Gov.UK service will signpost taxpayers to the right product, with clear HMRC guidance about how to choose software.”

Fair enough, I suppose. However, this still expects me to sit down every bloody quarter and punch in some figures to an online account of my taxes. Just so you know, I haven’t managed earned enough to pay income tax for several years. I don’t find an annual return at all burdensome, and doesn’t actually take me more than a couple of hours with my accountant and about 20 minutes online to complete.

Incidentally, who are these “stakeholders” that have been consulted? I’ve not been asked my opinion on this.

Rather than cutting red tape and the burden of the state, this government seems intent on doing exactly the opposite. (Surprise!) Far from a “light touch” I think it’s going to cause more annoyance than anything else. I’ve got better things to be doing than submitting quarterly updates on my lack of tax-earning ability. Why the hell would I want to keep up with my tax affairs like that anyway?

I guess it’s going to happen whatever we do. My ranting about it isn’t going to change it, so in five years I shall be grumbling about it again as the free software fails to connect to my digital tax account for the umpteenth time because I haven’t updated it or because I’ve had to dig out an old PC to run it because Mac OS or iOS aren’t supported. My guess is it’ll be like every other government IT scheme. It’ll crash and burn, and cost billions to implement, saving nothing in the long run.

This rant is brought to you by HMRC’s web site’s failure to recognise Best Beloved’s online account this year, requiring a postal password reset because he doesn’t have a registered email address with the system. It bodes well, doesn’t it?

A look askance, 2014

IMG_1463.JPG

It is that time of year for reflections on the past twelve months. Everyone is doing it: the telly is drowning in restrospectives, and Facebook has foisted an unwanted review on us. Happily, with the latter it’s easy to ignore and fail to “share”, and with the former it is simple just to turn off the television set.

How was 2014 at Snaptophobic Towers? Busy sums it up. The model building thing just keeps on coming. I am actually feeling overwhelmed and beginning to think I can’t actually do all the work I’ve taken on at the moment! I still can’t actually believe just how busy I have become in the past two years. I really ought to have done it sooner! The past year has also seen me begin to support a manufacturer with a demonstration stand. I hope this will continue in the next year, time and funds permitting.

Of course, being occupied full time has meant photography has taken a seat a long way back down the bus. I managed one serious photographic trip this year, missing out on some seriously fine weather during the summer. The interest is still there, and I need to buck my ideas up next year. I have been considering some form of project for 2015, perhaps even a 365, but I have a few days to think about that yet. Don’t hold your breath!

Trials and tribulations with cars culminated in the disposal of my little red Fiat, and the acquisition of a black Škoda. I still miss the Fiat. Driving it was often a hoot, though long distances could become tiresome. Still, with a larger, more comfy car, we are tending to travel a little further. If circumstances had allowed, I suspect I would have kept the Seicento and repaired him for sunny days and local trips.

We are giving some thought to supporting local theatre groups. Best Beloved used to be heavily involved in amateur dramatics when he was younger, and the interest is still there. I don’t want to be involved with productions, but I wouldn’t mind seeing plays and musicals. We are going to keep an eye on what the local companies are getting up to.

The end of the year has seen health issues. I caught a cold at the end of November, which knocked me sideways for a couple of days. Having shared it with Best Beloved, as one does, we were just getting over it when a visit to a modelling show gave us another dose. The two got together and had a right old party. Here I sit, a month on, only just recovered. I do so hate being ill.

About a decade ago, I declared the world insane. I am firmly convinced I went to sleep one night in September 2001 and woke up in some bizarre parallel universe. As far as 2014 has been concerned, it’s been about as bat-shit crazy as it’s possible to be. I won’t go into details, but it does seem there are some particularly ugly chickens beginning to come home to roost. Where it will end is anyone’s guess. For my part, there are so many things I want to get angry about. The rise of foodbanks in a wealthy country, the NHS being sold off to the highest bidder, the blatant lies and untruths uttered from the mouths of politicians of all stripes, the rise of the right wing as if the 1930s never happened… I could go on, but I won’t. I have decided to try and pick my fights in 2015. I can’t get annoyed by everything all the time, after all. The biggest fight, perhaps, is to kick the Conservatives out of office before they destroy the NHS completely.

If I have one wish for 2015 it would be that all the religious fanatics, political loons and all that go along with them suddenly realised that we are all living on this tiny blue dot spinning in an eternal void and we ought to try and play nicely together before it’s too late.

Finally, let me wish you all the best for the new year. Here’s to 2015, and may your god bless all who sail in her!

Nationalism: Nasty or Nice?

I’ve been mulling this post over for some time. I’ve been editing and re-editing, trying to put over what I have in my head. I may upset some readers. If that is the case, so be it. Sometimes, you have to say what you have to say.

It can’t have escaped attention—here in the UK, particularly—that a certain nationalist political party is beginning to make some headway in gaining parliamentary seats.

Let’s leave to one side the fact that both of the United Kingdom Independence Party’s seats have been gained by the sitting Conservative MP defecting to them, forcing a by-election, and being re-elected. Let’s also leave to one side the mainstream media’s fawning obsession with UKIP, because the blame for the party’s rise can be laid squarely at their feet, in my opinion.

A general disquiet and discontent about our elected representatives has been brewing since the global financial collapse of 2008, and the Westminster expenses scandal of 2010. I’m surprised it took so long, but the population in general has slowly woken up to the fact that MPs are out of touch with the real world, the world in which the rest of us live and work. While it’s always been an undercurrent—probably always has been, and probably always will be—the rise of UKIP has been mirroring a general feeling that someone or something else is to blame for all our ills.

UKIP began as a one trick party, its sole reason for existence was to push for the United Kingdom to leave the European Union. It gained some Euro MPs, a few English councillors, but never made much headway in parliamentary elections. Now it’s making a lot of noise, and has somehow transmogrified into a more acceptable version of the British National Party and English Defence League.

Instead of blaming the finance industry, which was truly the chief architect of our current financial woes, and which seems not to have learned from its mistakes at all, far more base instincts are being called upon. Immigrants, foreigners, the “others”—they are the ones we should, apparently be blaming for everything that’s wrong with our world.

There is now a lot of hand-wringing in Westminster, and the main parties have all lurched further to the right wing. They’ve done this in some mistaken belief they must be seen to be doing something about the root of all our ills. We are now in danger of losing sight of reality, as those who harbour frankly outright fascist views on anyone who isn’t “indigenous British” suddenly find they are being listened to by the Westminster elite.

The joke is UKIP is being put forward as a party that is different to the old guard. The fact that is it anything but seems to be completely ignored. The established parties, scared that their relevance is beginning to wane, are scrambling to out-UKIP UKIP, and anyone who has a clear head can only shake it in despair.

Who speaks for me? Who speaks for what may well be the vast majority of the population of this country? Right now, no-one. I would like to believe that a majority of the population in this country are like me. I don’t care about immigration, never have. I don’t think the EU is a monster we have to escape from. I think we have a moral duty to look after the disabled, the sick, the elderly, and I think we should encourage those who can afford it to pay more tax so we can rebuild the society our grandparents and great-grandparents forged after the Second World War.

Instead, we seem to be slipping back to the 1930s or earlier. Those who lurked in the shadows now feel they can come out and spout their hideous views without sanction. You can’t turn on the TV without seeing Nigel Farage, UKIP’s main spokeshole and leader, grinning out.

Tied to the renewed vigour of blatant racism seems to be a growth in the veneration of national symbols—not just flags, but also things like the poppy. Every November we are encouraged to support the Poppy Appeal, and to observe the act of remembrance, respecting the dead of many conflicts since the armistice of 1918. Somehow, since western powers bombed and invaded numerous Middle Eastern countries on some spurious pretext of fighting “wars on terror”, this annual act of remembrance has been co-opted into some quasi-religious festival of honour. To be seen in public without wearing a poppy is seen as something sacrilegious. Those who might prefer not to buy into poppy worship are vilified, while politicians and public figures try to out-poppy each other to show how well they remember the fallen. It’s become a paper flower circus.

The same thing is happening with the English flag—the red cross on a white background, the cross of St George. We have become accustomed to seeing these flags sprouting on cars, vans and houses during sporting events where the national teams are playing. You can probably picture the kind of person who happily proclaims their nationality by such displays. These are the same kind of person which support the likes of the English Defence League, the British National Party, Britain First, and UKIP.

I can’t help thinking these nationalistic attitudes can only lead us backwards, not forwards. As a nation, we seem to want to draw into ourselves, pull up the drawbridge and to hell with anything “other”. We want to blame everyone else for our problems.

I am happy to be proud of my country. I am British first, English second, and a European third. One of my grandfathers was from the Republic of Ireland, an immigrant who came to the UK to work and make a better life for himself. It seems likely that the other side of my family may have arrived from France several hundred years ago. I have no issue with people of other nationalities arriving here to do the same. I am proud of what my country has done, what its inventors, scientists and artists have created. There is nothing wrong with pride in where you live.

When you stop being parochial, you realise we all, whatever our colour or creed, live on a small rock, orbiting an unremarkable star. I wish we could all just get over our petty obsessions with race, colour, religion, borders and lusting after natural resources and just live happily together. Regrettably, it seems it will be some time yet before human beings learn to do that, if we ever do.

A demolition job: Boris’s credibility crashes in the Thames estuary

Whatever the cause of this, the saga has done little for his attempts to appear as a credible future prime minister.

For now though, the main reaction among campaigners against the airport will be relief. For six years Johnsons fevered vision has hovered over people living in the estuary like an alien invader. Now finally they can get back on with their lives.

via A demolition job: Boris’s credibility crashes in the Thames estuary.

Safe

Last Kiss

The London mayor, Boris Johnson, has launched a withering attack on the “irrelevant” and “myopic” Airports Commission, after the panel tasked with deciding where to build additional runways in the south-east finally ruled out his plan for a new hub in the Thames estuary.

The commission said that after detailed study it had concluded the proposal for a new four-runway airport had “substantial disadvantages that collectively outweigh its potential benefits”.

The commission chairman, Sir Howard Davies, said there were serious doubts about its operation and deliverability.

He said: “The economic disruption would be huge and there are environmental hurdles which it may prove impossible, or very time-consuming to surmount. Even the least ambitious version of the scheme would cost £70bn to £90bn with much greater public expenditure involved than in other options – probably some £30bn to £60bn in total.”

From The Guardian, 2 September 2014

As the young people might say, “Suck it, Boris”.

Braying scum | It’s not the despair

This is our parliament. These are the people we have elected to serve our interests, and they spend their lives wasting that opportunity by bellowing, growling and making animal noises at each other. They shout, they interrupt, they refuse to shut up, they act like a pack of chimps. No, not like a pack of chimps. More unruly, more vile, more deliberate, more malicious, more unpleasant. It’s an insult to animals to compare these people to animals.

via Braying scum | It’s not the despair.

I couldn’t put it better. Remember, these people work for us.

(In case you missed it, this is about the behaviour of MPs in the House of Commons today.)

It’s immoral to have food banks in one of the world’s richest countries | Suzanne Moore | Comment is free | The Guardian

If the recovery is underway – the new mantra – how come people have less money in their pockets? How come youth employment is refusing to budge, and a generation moves seamlessly into “the long-term unemployed”? Pay has stagnated, prices have gone up. To have avoided a fall in standards, one has to be either wealthy or asset-rich. This means owning property in London, as do most of the media/political class, me included.

Nonetheless, my standard of living is certainly affected by the distress all around: by the numbers of mentally ill people wandering the streets; by what happens in my child’s school; by seeing friends and family pushed out of hospital long before they are able to care for themselves. Austerity meant we quickly forgot the happiness index, but we must still comprehend that a decent standard of living comes from understanding rather than undermining mutual dependencies.

via It’s immoral to have food banks in one of the world’s richest countries | Suzanne Moore | Comment is free | The Guardian.

I’m going to get angry again. Why are we letting this stuff happen? Why aren’t we outside the Houses of Parliament or Number Ten, hammering on the doors to get answers?

It’s enough to make a body despair.

Dog Whistle

There’s been even more hot air from our government this past day or two about benefit fraud. It’s been claimed by the Department for Work and Pensions—and ably regurgitated with little analysis by our state propaganda machine mainstream media—that benefit fraudsters should face tougher prison sentences.

Step forward Channel 4 News, and their FactCheck blog.

So if we combine the central estimates from both departments, the total amount of money lost to fraud across the benefits system was a little over £2bn in 2011/12.

To put that into perspective:

Fraud accounts for about one per cent of the total annual benefits and tax credits spend, which ran at £194.3bn in 2011/12.

Fraud isn’t getting worse

DWP says 0.7 per cent of its benefits were overpaid this year due to fraud. The percentage was exactly the same last year, and it was a fraction higher in 2010/11 – 0.8 per cent.

“Error” costs more than fraud.

Across the whole system, fraud cost us £2bn and error – in the form of honest mistakes made by claimants or official cock-ups – cost £3.4bn last year.

This is only a fraction of the money lost from tax evasion and avoidance.

HMRC puts this figure at £32bn but tax campaigners say the real “tax gap” is much higher.

Richard Murphy from the Tax Justice Network thinks tax fraud could be 50 times bigger than benefit fraud.

The cost of fraud is dwarfed by the surplus from unclaimed benefits

The figures are a bit shady but DWP say between £7.5bn and £12.3bn of the six main benefits it administers were left unclaimed in 2009/10.

To this figure of around £10bn we can add several billion more in unclaimed tax credits, although HMRC is reluctant to tell us the real figure.

Huh. So, the actual amount of fraud in the system is smaller relative to the amount of errors made on benefit payments, and absolutely minuscule when compared to the total benefits paid out each year—and the albeit completely legitimate tax evasion and avoidance going on.

If we could get everyone to pay the right amounts of tax, this country wouldn’t be in the shit it’s in. Or is that too simplistic?