The majority of you who responded by email or blog post to my piece on the four millionaires thought none of them was rich. A few of you thought they were and thought I should concentrate on more representative people from amongst my constituents.They should study modern Britain more closely. Most of my constituents own their own house. Many of them own homes worth Ā£250,000 to Ā£1 million. Many also have savings, especially through company or individual pension funds. If they have provided for a pension of Ā£10,0000 thatās another Ā£200,000 of assets. Many look forward to larger pensions than that.
It is true I am talking here mainly about the older half of my electors. I write regularly about education, training, acquiring a first home and then a family home, and the need for more better paid jobs, all very relevant to the younger half. People in the age range 18 to their early 50s tend to be acquiring homes, paying off mortgages and accumulating pensions, whilst people from their 50s onwards often own their own home, have repaid their loans and have savings. Younger people are also of course interested in wealth taxes as they may be involved in the finances of their parents in older age.
Let us now look at the taxes that impact people with homes, savings and pension pots. Two things emerge. The first is tax has a big impact on how people hold their wealth. The second is many feel they have been cheated by the state over the years as successive governments have changed the rules and broken previous government promises.
We were encouraged to save as young workers for our retirement through tax privileged pension funds.Instead of using our savings to invest in a business or improve our homes or to boost our living standards as younger people we duly put the money away. Years later government decided to change the rules, saying if you had saved too much ( a level never mentioned before)or been good at investing those savings they were going to tax it after all. Large sums are now locked up in pension funds people do not wish to use because of the big tax hit if they do.
George Osborne promised to exempt Ā£1m of assets from Inheritance tax for each family. This was a surprisingly popular pledge, given how few people will be in the position of receiving such a large inheritance. He then failed to deliver, keeping the sum at Ā£650,000 for a married couple with complicated rules about family homes as a top up in some cases. Many people go to great lengths to avoid any possibility of IHT through the many legal ways it can be avoided.
Elderly people who bought themselves good family homes, or built or improved a home, now find they are hit by sky high Stamp duties if they want to trade down to something smaller or wish to move closer to their children.Younger people are also clobbered as they try to move up the property ladder. Stamp Duty encourages immobility, poor use of the housing stock and is a direct tax on aspiration and personal happiness.
Capital Gains tax also immobilises a lot of wealth. People with second homes and or share portfolios are reluctant to sell these assets where they are sitting on taxable gains. They keep homes they would rather switch to a different location, or would like to switch into different assets altogether. Many share owners tell their investment managers not to take profits above the tax free allowance each year.
Our tax system over the years has favoured investment in your own home and in a pension portfolio of large company shares and bonds, limiting entrepreneurship and more interesting ways of saving. Because so many people responded to these tax reducing ways of saving governments then cheated people by finding ways of taxing them after all. We need fewer and lower taxes on changing assets around to encourage better use of capital.There are too many homes held by people who do not need them or want something more suited to their latest needs, and too many shareholdings only held because they sit on big gains when the money could be used for something the person needs more, or to reinvest in a better prospect.
August 26, 2019
Good morning.
The question that has to be raised, is why does the government need to tax those that have been prudent and saved, or have taken risk with their own capital ?
To answer my own question, I believe it is to maintain and grow the Client State. We have evermore and bigger local and national governments. We have devolved governments and City Mayoralships. We have endless QUANGOS and NGO’s. White Elephant projects. All the things so many of us have been saying for years ! The pips are squeaking !
We need to stop this fixation on GDP and focus on quality of life and services. Consumerism is not a measure of success. It is a false god.
Success for some is failure for others, so, what government thinks it should be doing is making things fairer. That is not what government is for. It is not a moral arbiteur but a government whose only purpose is to protect the State and ensure that the Civil Service carries out both its duties and the elected government policies, nothing more. I decide how much sugar, beer and what not I need / want.
Before you tell me how I should live my life I think you should learn how to balance the books as I have to do in my own home.
August 26, 2019
but if peopleare to decide their own fate and future needs we should abandon NHS and funded care. Let the people provide, buy insurance, save, acquire pension funds…
You won’t get a lot of votes..
August 26, 2019
I am not standing for election and, if I was it would not be on a platform to punish those who create wealth. Neither would it be to punish those less well off. But I would, as I have both been saying and have written here, get rid of all the parasite groups, like those I have just mentioned plus, the fake charities. That would free up a lot of cash for the less well off.
August 26, 2019
I repeat (a party) will not get a lot of votes.
You say ‘ I decide how much sugar, beer and what not I need / want. ‘
So remove tax on beer, spirits, fast food, chocolate, sugar, ready made deserts etc…stop making drugs illegal, remove laws on raves, remove licensing laws…lets all get fat, drunk, comatose.
Nobody will do anything about it.
Sounds like the worst of drugged California, fat America, drunk Russia, Finland, Scotland etc
August 27, 2019
Well said Mark B. We are meant to be a free democratic society. For those who are disable and genuinely unwell support should be there.
For those who chose not to work that is fine, live the consequence not off my back.
The same for (anyone not doing conventional work ed), it is a life style choice. Absolutely fine. However, no hand outs. When was the last time HMRC or councils undertook an investigation about their income?
I would prefer a huge reduction in my taxes to help my family, not the world not mass immigration. Nor for the useless Tory govt of nine years to lie after lie and to piss it down the drain.
August 26, 2019
Indeed,
August 26, 2019
Exactly.
Indeed GDP is not a very good measure in many ways.
If you look after children for you sister one week and she in return does it for your children the next week then no GDP is recorded. This compared earning more money and paying a nursery school to do it for you. If you take a day off work (unpaid) to repair you car or decorate the house a decrease in GDP is recorded compared to working and paying a garage/decorator.
Doubtless there will soon be laws in place to prevent such child care or people fixing their own cars or decorating their own houses (if indeed there are not already). Health and safety as the ruse no doubt. But the real reason is the state want the income tax, NI and VAT as a middle man!
August 26, 2019
MarkB – I completely agree with you. I came across the following just yesterday, attribution unknown to me:
“A government that’s big enough to give you all you want is big enough to take everything you have”.
August 26, 2019
And you still would never get anything like all you wanted. Perfect health, beauty, intelligence, sporting ability, the perfect wife/boy/girlfriend and immortality might be rather tricky for governments to provide. In reality you would be lucky not to starve!
August 27, 2019
@LL; re Big State vs Little State.
Except most people do not seek a “perfect” anything, most people are not so fickle as to even expect perfection, as if living a Hollywood fantasy.
As for “starving”, whilst I’m not suggesting that there wasn’t hunger in the 1970s, those a little better off did not need to resort to donating to food banks to help the less fortunate, they knew they had already ‘donated’ via their income taxes to the welfare state…
August 27, 2019
I have a friend who works in a food bank, she is very sympathetic but thinks the parents attending would be better off having cooking lessons with low cost ingredients as our mother’s used to use rather than buying oven ready-made products and what we would have considered luxury items and fizzy pop and eating takeout all the time, giving them no money left over towards the end of the school holidays when free school meals aren’t available I don’t believe social security benefits for single and low paid parents are low do you especially if you compare them with what pensioners have to live on?
August 26, 2019
@Mark B: “All the things so many of us have been saying for years!”
Indeed, the last 40…
We have been taxed as much before, but just in a more honest and balanced way, now taxation often falls to those far less able to pay these regressive and often non-discretionary taxes (Fuel, VED, VAT + higher than necessary local CT elements [1] for example), or taxation has simply been increasingly deferred, where once people use to pay higher income (related) taxes during their working lives now they pay more indirect tax into later in life, perhaps when downsizing or their wealth is subjected to IHT after death.
Not sure many would regard the growth of the (bottom-up) Client State a real problem, what price does one put on democracy and local accountability – you might prefer the top-down GDR style of govt but I suspect many do not. I’m not saying there is no waste, of course there is, LAs could almost certain do cheaper much of what they currently have to outsource, simply because out-sourcing has to make a profit for the provider rather than just pay wages and overheads costs.
[1] due to cuts in HMT, income tax derived, funding
August 26, 2019
You ask:- “The question that has to be raised, is why does the government need to tax those that have been prudent and saved, or have taken risk with their own capital ?”
So they can waste the money on augmenting the feckless, trying to buy votes, funding the dire lefty BBC propaganda organisation, funding rather corrupt overseas aid, given grants for absurd renewables, funding HS2, Hinckley C, paying all those often overpaid (and often under worked) state sector workers to inconvenience the productive (and to fund their gold plated pensions) and to give Ā£billions to the EU or piss down the drain in all sorts of other “innovative” ways ……
Or another answer:- You cannot tax those who have not been prudent and saved as they do not have the money to pay up due to their imprudence and lack of savings!
August 26, 2019
Well said Mark
August 26, 2019
I think George Osborne (in Blackpool as shadow Chancellor) actually promised to increase the threshold to Ā£1 million each (and not just a Ā£1 million per family). This to be paid for by a Ā£25K Non Dom tax. The man is of course an economic illiterate. This as the Non Dom tax has almost certainly lost more tax than it has raised damaing the economy hugely. As anyone sensible would have expected of it.
He also said “We are the low-tax party,” and “We have a new dividing line between a Labour Prime Minister who has taxed a generation out of home ownership and a Conservative government that will abolish stamp duty for first-time buyers”.
More lies and promises he nor Hammond ever delivered or even tried to deliver while they pushed taxes up to a 50 year high!
August 26, 2019
@LL; What taxes do Non-Doms actually pay, and here I also mean taxes that can not be claimed back?
Reply All UK taxes on income and wealth generated here and all normal living taxes like VAT on their living costs here.
August 26, 2019
They pay the same on their UK incomes, investments and on any income they remit to the UK – but nothing (in the UK anyway) on overseas earning or gains. Plus some pay the Ā£30K or Ā£60K as below. So they nearly always pay far more than an average earner. In practice without these rules many rich people would not take up a job in the UK as it might cost them more in tax than they earn. It only works for 15 years max now (another big mistake by Osborne/Hammond) and Javid so far!
First 7 years of residence in UK Nil
Resident in UK for more than 7 years
out of past 9 years (Maximum period 5 years) Ā£30,000
Resident in UK for more than 12 years
out of past 14 years Ā£60,000
August 26, 2019
@LL; Makes one wonder why they bother then, so what are the advantages to having Non-Dom status?
August 26, 2019
No tax on your overseas income unless remitted to the UK. If you have say Ā£20 million invested overseas producing perhaps Ā£1 million PA in income you do not have to pay Ā£450k to HMRC (45% of income – for them rather depressingly to piss down the drain). Just the Ā£30k or Ā£60k Non Dom taxes instead. No CGT on overseas gains either or IHT on overseas investments.
August 27, 2019
@LL; Stop digging!…
August 26, 2019
If non doms pay on all income and wealth generated here, why are the internet giants et al allowed to get away with it? Surely if you make a profit from the British people, you owe the British people as you are using facilities provided by their taxes. Some will say they provide employment and employees pay taxes, but how many jobs do they destroy? I’m pretty sure if the likes of (won’t name them because you won’t allow it) were to be given a tax rate on turnover here, regardless of whether they pay tax in America or the Caymans, they would not shut up shop and go. If they did maybe another opportunity for local entrepreneurs. If they supply from offshore they should be liable for customs and VAT on arrival (not just under Ā£30).
August 26, 2019
The big tech companies you talk about do not need to pay tax here because they will choose to pay it somewhere else. The British government is not powerful enough to do anything about it.
Indeed to really take them on – so they do pay their share – youād probably need some sort of multi-laterally organisation which covers, say, half a billion consumers in 30+ of the richest countries in the world. Something a bit like the EU / EEA single market. Oh.
August 26, 2019
But UK companies operating abroad also only pay tax on profits back in the UK.
This us what you lefty envy obsessed people fail to realise.
You fantasy needs an agreement of every nation on Earth.
August 26, 2019
@Andy; “The British government is not powerful enough to do anything about it”
What utter nonsense, the UK is just as able to make taxation laws as the French are, but look at the mess Macron is getting into over trying to tax US internet companies – French wine might now face a 100% tariff when imported into the USA, Even your super-national (or USE) taxation idea would not do as you claim, it would just result in the suggested 100% tariffs applying to all EU wine entering the USA!
The only super-national organisation who might be able to apply the sort of tax laws you suggest would be the UN/WTO. Ho-hum…
August 26, 2019
You mean an organisation which allows multi-nationals to set up sweetheart tax deals in Luxembourg and Ireland. Oh.
August 26, 2019
Andy
Wrong as usual
1) Companies operating in the UK pay UK taxes
2) Those using transfer pricing to offset profits are using an EU scheme set up to do that
3) The EU has no jurisdiction over 95% of countries so no it wouldn’t be a body able to do that
4) The UK has the lowest tax gap in Europe at 5.7% the worst are Germany, Italy and France
You really have no idea about business do you
August 26, 2019
You spotted the point -ie some EU countries specifically operate the lowest Corp Tax to encourage immoral transfers of profit using ‘legal’ tricks which any responsible country or trading group of countries would outlaw.
The single market works well for the members until others decide to take them on, and play the same game….MSoft/Amazon/Oracle etc — wake up lobby USA/UK.
August 26, 2019
Andy,
Exactly. Why can’t the UK govt do anything? It has no trouble levying income tax on it’s earners and non doms without consulting other countries. Why is an international agreement needed to do the same for corporates who do not pay here? I don’t agree it is difficult to work out how much they earn here, simply require it to be noted in audited accounts as is required for UK companies.
Edward 2 – If we are really one of the highest tax regimes in the world, I very much doubt they would send their profits home to be taxed here. I am not lefty obsessed, just someone who believes in fair play and paying for what you use.
August 27, 2019
Graham, if you are a UK company registered here for accounting purposes you submit your accounts in the UK and pay any corporation taxes you owe on your profits in the UK.
August 26, 2019
It is once again daft EU rules in part that allows companies to shift their profits around so they pay it in Luxembourg, Ireland or somewhere else with a low corporation tax rate.
It is hard to argue where the profits are actually made. So for say a coffee chain they have marketing done in one place, shop design another, cup design patents etc. in another, finance in another, software in another, coffee production another, coffee machine design and manufacture another ….. and can use transfer pricing for these costs between companies in different countries. Even easier for companies like Amazon, Microsoft, Apple etc. I suspect.
August 26, 2019
Agreed LL
One of the many negative effects of the fabled Single Market.
August 26, 2019
@LL; Profit is surely made at the point of sale, until then everything is a cost?
August 26, 2019
Indeed patent costs, licensing costs, marketing costs …. all comes off net profits.
August 26, 2019
jerry
“Profit is surely made at the point of sale, until then everything is a cost?”
True but in order to minimise profits certain organisations transfer price. ie they PAY another company owned by them in a different tax jurisdiction ( usually Luxembourg or Dublin) money for the provision of services, thereby reducing their profits here and inflating their profits in lower tax areas
August 26, 2019
@jerry (For some reason you don’t have a reply button).
“@LL; Profit is surely made at the point of sale, until then everything is a cost?”
But the company can decide where the “cost” is, as it controls the accounts and the supply chain.
It can decide the costs it wants on intangibles like, rights to use a logo (Brand), marketing, IT (Servers in different countries), various mangement functions, etc.
All of these costs will be invoiced from other divisions in different countries, at a cost they can decide, to suit the amount of tax they want to pay.
August 27, 2019
Not really, in the UK at least, transfer pricing must be done at arms length and be subject to the same profit that would have arisen if the transactions had been carried out under comparable conditions by independent parties.
August 26, 2019
Many of the tax decisions by recent Chancellors seem to be less concerned with raising revenue and more concerned about appealing to the green eyed monster that manifests itself when people see others doing better than themselves.
And now this morning I hear that Cambridge University has caved to political pressure and will be setting quotas to limit the number of students from independent schools.
Why doesn’t the govt raise standards in state schools instead of hamstringing independently educated children?
Of course, the govt will say they don’t have enough money for that, but then they embark on revenue reducing virtue signalling which stifles the economy rather than stimulating it.
In my own case I have several projects on hold due to tax reasons.
Thee long march through the institutions has made it all the way the the heart of the Tory Party.
August 29, 2019
“Cambridge University has caved to political pressure and will be setting quotas to limit the number of students from independent schools.”
All this will mean is that privately educated children will take up places at the best State provided colleges with the top-up private provision and poorer children then lose places at the best State colleges.
It is not always standards at the local State Schools all three of my children could compete qualification wise with the best independent school from mid-league State schools, it is the extras private school pupils learn and know e.g. what books to read, confidence under interview from early ages, just a general feeling of superiority and entitlement and connections, better application writing and much earlier advice on what Oxbridge require subject wise from GCSEs and A levels plus what extra curricular actually activities counts. It also helps with certain colleges to have a trade union connection in the family or someone at the bar or parents other well connected relatives that went to Oxbridge, a high up church connection. You will never stop it and if you do the rich will just set up their own University.
August 26, 2019
Reflecting upon the four millionaires I ponder if we might have explored whether the State might one day be obliged or wish to take a harsher line such that: –
Mr A with a state pension and top-up benefits in a modest one bedroom flat that the property market values at Ā£1 million might be required to realize his property wealth and hence replicate Mr B’s lifestyle (a Ā£250k flat and income from Ā£3/4 million investments) with associated taxes flowing to the State and a cessation of top-up benefits;
Mrs D is denied reliance upon the State (beyond basic subsistence) when she has squandered her Ā£1 million on a decade of high living.
As you show today, tax policy to a great extent fashions individuals’ decisions about investment and wealth management and I would think it is very difficult to devise policies that condition long-run optimal behaviour.
August 26, 2019
Formula, you are treating John’s speculation as fact.
Not all governments would be as complete and utter a shambles as the Conservatives have been for the last three years.
I would suggest that in one startling departure, a Labour government would listen carefully to the impact analyses of learned experts, to avoid undesirable and previously unforeseen outcomes of policy, exactly such as those with which you apparently try to scare your readers, John.
August 26, 2019
Are these the same “learned experts” that have advised all the previous governments?
August 26, 2019
ālearned expertsā no thank you, perhaps in engineering, physics, energy production, maths, medicine and similar but not in economics, social sciences and the likes. Nearly all lefty loons, dishonest or P/C dopes with an axe to grind.
August 26, 2019
Martin in Cardiff
I was right you are a parody account
It was GORDON BROWN a LABOUR PM who stole our pensions
“A document published quietly last week shows that Labourās raid on pensions in 1997 now costs taxpayers nearly Ā£10bn a year ā double the amount Gordon Brown had initially outlined”
August 26, 2019
Well parroted, Libertarian, what a good, useful type your are.
Gordon Brown introduced a dividend tax for managed pension funds, just as many countries have. It cost an estimated average of less than a hundred pounds per beneficiary per year, to be met by increased employee and employer contributions.
In fact it helped many funds, because they changed their composition away from shares, protecting them from the 2008 crash.
The Tories have never reversed it, and it would make little difference to pensions if they did. People went into BTL etc. because of appalling annuity rates, and not because of that.
August 26, 2019
Multiply 100 pounds per person per year by the millions of people invested in pension funds add a few decades and you gave sewyestested hundreds if billions from individuals retirement funds.
The effect was to reduce private pensions payouts to retirees by a third or a half.
It has effectively wrecked the pension industry for the next generation.
August 26, 2019
Sequestrated
August 26, 2019
Martin in Cardiff
“Well parroted, Libertarian, what a good, useful type your are.”
I’m useful because I actually check facts and do my research a lesson you never learn which is why with almost every post you do you make yourself look silly
Yeh tell that to the 1,000’s of people that lost out.
You are completely laughable , a Labour government would be fair….. yeh well they weren’t fair but it didn’t hurt too much….
Yeh because Labour expert fairness consists of promising you something tax free , then taking it away then charging you extra to make up the shortfall
ps read the post again it cost people Ā£10 billion a year
“In fact it helped many funds, because they changed their composition away from shares, protecting them from the 2008 crash.”
I’m crying with laughter here Gypsy Rose Brown did this 11 ELEVEN years before the crash to protect people . Yeh of course he did. You must be the most naive person on here and thats saying something .
Stock market returns
1997 33.4%
1998 28.6 %
1999 21%
“People went into BTL etc. because of appalling annuity rates, and not because of that” Yes because everyones company pension suddenly bought houses instead .
For individuals with SIPPS etc where did they get the money to suddenly buy houses? Explain how you convert a pension to a house ownership
People STOPPED opening & putting money into pensions and looked for alternatives precisely because it was less viable to have a pension. Which makes Gordon and Labour also responsible for an asset bubble. Wow lets hear it for Labour experts
The Tories are as bad as Labour and have made the situation worse
August 26, 2019
Wish on, Martin in C, there’s not the tiniest shred of evidence that a Labour government would act on anything other than pure Marxist ideology. Your comment shows that you are totally out of touch with the real world. Do you ever read anything said by McDonnell?
August 26, 2019
There’s not the tiniest shred of evidence, that all events on Earth are not controlled by a magic green rabbit, in the boot of a 1965 Morris Minor, on the seventh moon of Jupiter either.
August 26, 2019
Martin in Cardiff
“Thereās not the tiniest shred of evidence, that all events on Earth are not controlled by a magic green rabbit, in the boot of a 1965 Morris Minor, on the seventh moon of Jupiter either.”
You’ll never guess why theres no evidence for your statement , go on have a go….
August 26, 2019
What an incredibly silly and puerile response.
August 27, 2019
Same rabbit that comes up with Labour policy?
August 26, 2019
Jiminyjim
Exactly.
The fact of the matter is Labour does not, and never has liked people owning property, or anything else for that matter.
Back to topic; I don’t think the rich should be overly taxed if they provide employment.
August 28, 2019
Steve, this makes me wonder if Jeremy Corbyn, Tom Watson, John McDonnell, Dianne Abbot and Emily Thornberry own a single property/properties?
August 26, 2019
This post highlights one of the problems of the tax system; it pays little attention to age. While a young person, just starting on a career, who had a net worth of a million could be described as rich, the same person with the same level of wealth at 65 with little prospect of earning more through work could easily have that much wealth and still be cash poor.
It helps to keep transaction taxes low so that people don’t sit on assets for fear of a big tax bill.
August 26, 2019
It is mainly the overall level of taxes in total that is the problem. The government is spending not far short of 50% of GDP while delivering fairly dire and still declining public services. An NHS that cancels appointments 10 times in a row (at the last minute) for many unlucky patients it seems from the Telegraph today. It should be spending more like 25% (of what would be a far bigger GDP of course).
The government just needs to stop spending (largely wasting money). They need to adress the circa 50% over remuneration (with pensions included) in the state sector. They need to encourage people to provide for themselves things like education, healthcare and similar wherever they can afford to (with tax breaks and top up education vouchers). The BBC (brainwashing organisation with its grossly over paid lefty art graduates & lovies) and the aburd licience tax that feeds it needs addressing too.
Having said that taxes that are not a reasonable % of real profits (asset grabbing taxes) like stamp duty, IHT, the new landlord interest taxes, the pension muggings, the NonDom taxes and the likes are particulary damaging and unsustainable. You might get more tax for the first year or two but get less tax revenue in the end and damage jobs and the economy. The absurd tax complexity we have is another tax in itself.
August 26, 2019
Income tax up to 45%, VAT up to 20%, Corporation tax 19%, CGT 28%, Stamp duty up to 15%, Nation Insurance both combined circa 23%, IHT 40% over just Ā£325K, Insurance tax 12%, pension taxes 55%, personal allowances and child benefit scrapped for many too.
Plus we have rates, council tax, motorist muggings, the BBC tax, the non dom tax, fuel tax, car taxes, alcohol taxes, cigarette taxes, renewable energy taxes and market riggings and many more taxes, licencing fees, planning fees, building control fees, passport fees and the rest.
As I said the other day it is easy for these taxes combined to take 80%+ of your wealth off you over just a few years. This damages the economy hugely as people and businesses generally invest far better than governments do (not hard). Also so many businesses and wealth or hardworking people just leave. Why does the UK government have to spend/waste so much compaired to Hong Kong or Singapore or even just Switzerland? 25% of what would be a much larger GDP is plenty.
August 28, 2019
“Nation Insurance both combined circa 23%” actually it’s 25.8% (12% ee 13.8% er) from Ā£8632, plus 8% Nest combined contribution from Ā£6136. So nearly 34% National Insurance premium over lower earnings level.
August 26, 2019
Many countries have no IHT including Australia, New Zealand and Canada. The USA has an equivalent of our nil rate band but it’s $11.4M. I see no justification for retaxing the accumulated, mostly earned and previously taxed, wealth of those who have been hard working, clever, prudent or lucky. The recent changes to CGT and interest relief, as they effect let property suggests the gov has a vendetta against private landlords. The changes to the way dividends have been taxed have been a significant and highly successful incentive to tax evasion. The taxes on pension “excesses” have simply stopped people doing the work that would give them the extra income which would give them a tax charge greater than than extra income.One can only wonder if recent Tory chancellors are actually labour moles.
August 26, 2019
The attack against Landlords has been sustained over years and continues with its proposals to give long leases to tenants. Government action does have effect on the Housing market as many Landlords sell up releasing property to the market. In my view that is why we have a freeze on property prices this year but with mass migration continuing houses will again be in short supply.
We need a right of centre Government to rid ourselves of the liberal left high tax and waste Governments that we have endured for a generation. The Tory’s are not conservative!
August 26, 2019
Regarding Landlords, it all depends on whether you are a Landlord or a Tenant. A landlord regards his property as an investment to be made the most of, a tenant regards it as a home. There is a big difference. How would you like to be evicted at 3 months notice,even if you are a model tenant with schools, jobs etc all upended. If a landlord is not prepared to rent for long periods they should maybe rent out on say 6 month leases only so everyone knows where they are from the beginning. It would allow the money grabbers to increase rents every six months if they wanted to and people looking for a home could boycott them.
August 27, 2019
It works both ways. You get tenants who leave after six months leaving you with the job of finding a new tenant and you get tenants who don’t want longer tenancies than six months.
August 27, 2019
Then why would Landlords cry over signing longer leases? You make no sense. Finding new tenants, I would suggest, is a bit easier than finding a new home, schools, job, doctor etc. at short notice which people I know have had to do, merely so a landlord could split the house up into several ‘apartments’ just to make extra money. As I said if people only want 6 months that’s fine but if people want a home it should not be at the whim of a racketeer. Not all Landlords are good – I’d guess most are not.
August 27, 2019
Landlords don’t cry neither are they mostly bad or racketeers as you ridiculously claim.
It is a relationship between two parties.
It suits some tenants to stay settled in a property for years.
It suits some tenants to stay for six months and then move on.
It suits some landlords to have a settled tenant
Others want their property back to move back into or so they can simply sell it.
August 26, 2019
Indeed the Tories were lefty tax to death LibDim at best under the appalling May, Cameron and Major. Even Thatcher failed really to cut the state down to size and kept the dire NHS going.
Boris is perhaps more encouraging but we shall see. We still have the highest tax rates for 50 years under Javid. Neadless to say like all Conservative ministers he “claims” to be in favour of low taxes but we shall soon see. If he is not evicted before he gets chance.
August 26, 2019
Sensible countries have no IHT as it deters wealthy people from coming and investing and create daft incentives. 40% over just Ā£325K is an absurdly high tax level.
August 26, 2019
People in the age range 18 to their early 50s tend to be acquiring homes, paying off mortgages and accumulating pensions,
That is not my experience . 30 year olds I know are incandescent with rage that they have no hope of owning a home and no chance of any decent pension( few of us do). They pay for pensions they will probably not receive, they fund decades of medical care they will not get ,and face uncertain futures with jobs for life having gone , industries for life not far behind. On top of all that the old have dragged them out of Europe to the detriment of their prospects and seem entirely relaxed about allowing the country`s debts to accelerate. The old, or some of them at least, are eating the future like a great swollen slug….
I can`t work out why the young aren’t rioting in the street
August 26, 2019
Socialist ignorance worthy of contempt
August 26, 2019
because you are totally wrong.
August 26, 2019
I suspect your so called experience suits your view rather than inform them. Congratulations on worming in an obsessive nothing to do with the subject rant about leaving the EU.
What a dismal life you lead. Glass more than half empty as ever.
August 26, 2019
Ah….”the old dragged them out of Europe”, as opposed to it having been a democratic decision to leave the EU.
Naturally the EU rules on free movement have nothing to do with the housing shortage, the overburdened state services, or the stagnant wages…
August 26, 2019
It seems your diatribe against to the old and infirm leads towards a desire to charge for the services one needs to reduce the tax burden on the young. It does sound as though you would wish to charge for all medical service needs on a person by person basis .. the elder needing most such care of course. Of course it is a remoan myth that only the elder of us voted to leave.
August 26, 2019
They are not rioting because what you say is complete drivel. They have never had it so good in many ways. When I was at school I had to work a day at the local bakery just to buy one LP. Or two weeks just to buy my Getto Blaster! Or two years to buy a new car. (not that I ever buy new cars). Interest rates were about 7% when I bought my first home for Ā£100K with a 90% mortgage. I had to rent part out for years just to keep up with the mortgage. Then we had the idiot Major and his ERM and mortgage rates went up to nearly 17%.
Now you can get almost everything for free on a Ā£50 phone or tablet. Books, phone calls, entertainment, dating apps, movies, news, porn, banking, audio books, tv, radio, music, Uber cabs, job searching, ebay …. and base rates are just 0.75%. Plus you do not even need to pay for a landline now. Nor indeed wait months to be connected by BT! We used to have to pay a fortune just to advertise a car or bike for sale in the paper or exchange and mart or similar.
True you do have the worry that Corbyn/Mc Donnall/SNP might destroy the economy quite soon.
August 26, 2019
You have very odd vision of modern UK and you must meet some odd young people NM.
“they have no hope of owning a home”
There are many properties available well under Ā£200,000 and in some areas well under Ā£150,000
Have a look on property websites.
So two young people on average earnings can afford a mortgage and to buy a home.
Standards of living are far higher now than the last generation.
August 26, 2019
Odd that the young of continental Europe flock here and continue to do so.
August 26, 2019
not odd for 1 minute…..all hope is lost in most EU countries.
We have tolerance, mostly welcomes, recognition of honest pay for honest work, equality, integrity but most of all HOPE.
August 26, 2019
Newmania, While I agree that it is difficult for youngsters to get on the housing ladder I have to say that many aren’t rioting in the street because they are too busy partying in the streets! My sister has 3 boys and the eldest is 36. None of them has bought a property. They all earn good money as do their partners but they are always away for weekends either in the UK or often abroad, going to this that or the other party, buying tickets for shows, getting the latest mobile phones, buying a very nice car, buying expensive clothes, and in the girls case, getting their nails done, getting their hair done, getting tattoos, having their eyebrows done and their eyelashes. The list is endless. I don’t remember having any of these things when I was saving hard for a mortgage. We worked all the hours God sent, didn’t go out, didn’t buy new clothes, didn’t own a flash car, didn’t even have a colour TV, never went on holiday. Life was pretty boring but we did it because it was the only way. We didn’t have parents who could help us out. My daughter has bought her own house and my son is about to. It can be done with a little dedication and a lot less partying in the streets!
August 26, 2019
No doubt you have a 4 bedroomed detached house in a nice area which cost you Ā£750.
Your relatives donāt bother saving because – even if they did – they could only ever afford a broom cupboard, in a slum – and that would set them back half
a million.
August 26, 2019
Ā£750 at the time would have still been a large sum in real terms at the time. Interest rates were higher too. Also a house then was not the same as a house now. They have more with more insulation, central heating, more bathrooms, double glazing. sliding folding doors, posh kitchens etc.
August 26, 2019
And usually only one earner per couple,
August 26, 2019
Spoken like a true rich, spoilt southerner who knows the value of nothing, Andy
August 26, 2019
Ā£750 for a house. Where? When? 4-bedroomed too.
It wasn’t possible post 1960, probably not post 1950.
Were any built in the Outer Hebrides?
Average income minus taxes 1950? 1955? 1960? 1965? 1970?
You really do write such twaddle.
August 26, 2019
sum it up – living for today, no aspiration to look after the future.
August 26, 2019
No, my first house was a 2 bed terrace built by Wimpy for Ā£3750. I don’t live in anything like you profess to know. I lost my house in the recession of 1988 and my husband lost his job. Through sheer hard work my life is back together but it cost me my marriage. Still, by all accounts you’re OK Andy so I’ll sleep well tonight.
August 26, 2019
Have you ever considered that the reason why “the old” voted to leave the EU is at least twofold?
Firstly, the 2016 referendum was the first chance in a very long time to express that desire (I’m 55 so was too young to vote in the 1975 referendum. Funny how Remainers complain that leaving affects those who were too young to vote but are quite happy for people such as myself to be disregarded when the effect is continued EU membership).
Secondly, with age comes experience as well as hopefully a bit of wisdom. I have seen how the EU mutated from the EEC trading organisation to have desires of being the United States of Europe in deeds if not title. I have seen the broken promises (e.g. Blair giving up our rebate for a CAP reform that never happened) and I have seen the failed policies e.g. discarding dead fish because they are the wrong species doesn’t conserve stocks.
August 26, 2019
Dead fish arenāt discarded. They are landed.
The EU started work on the ban in 2013 – follow a UK led campaign for change – and itās been gradually introduced ever since.
Predictably some fishermen are not happy with discarding being banned. Perhaps fisherman are just not happy?
So that particular objection of yours to the EU is wrong. Any more made up stuff?
August 26, 2019
Your ignorance is breathtaking, Andy.
August 26, 2019
How is quoting a policy that even you admit used to exist “made up stuff”?
August 26, 2019
Slavery used to exist – and Tories used to back it. But I wouldnāt blame todayās Tories for it.
Discarding fish is no different. The EU recognised it was not right and changed it.
Whatās your problem with that?
August 26, 2019
How do they check on that then?
August 26, 2019
Wrong.
Tons of fish are still caught and thrown away.
Whilst poor people starve in the EU.
It is a symbol of EU madness
August 26, 2019
………….the old have dragged them out of Europe to the detriment of their prospects ……………. NO. Not Europe, the EU, that unelected band of bureaucrats who regulate to death all and every aspect of trade, environment, power generation, climate change nonsense, etc etc. Have you not seen the reducing percent of world trade the EU enjoys whilst the rest of the world is expanding? We get nothing but tariff and regulation from the EU at huge costs to us. Go listen to Tusk, Barnier, Verhofstat, Drunker et al and tell us they are there for the benefit of the UK. Fool!
August 26, 2019
They regulate to facilitate trade and to ensure a level playing field.
As for your āreducing percent of world tradeā – well, dah.
I know Brexiteers are not the brightest but this is one of the silliest objections to EU membership.
Hereās a shocking fact for you – under-developed countries tend to grow much faster economically than developed ones. Mad eh?
The EU is developed. As is the US. Canada. Australia etc. Of course their share of world trade is shrinking because they never will grow as fast as developing countries like China, India, Indonesia – which can record rapid growth rates.
All you will get from Brexit is poorer than you need to be. I genuinely donāt care about that – if you think being comparatively worse off will make you happy then fill your boots. I donāt doubt you will be disappointed. But you voted to make me and my family poorer too – and, annoyingly, it turns out that we do not want to be poorer and that we are not economic illiterates either.
August 26, 2019
After a long time Andy, you now shift your opinions to finally agree the EU is growing slower than most non EU nations and the EU’s share of world trade is falling over the last decade.
Your pathetic excuses are not good enough.
August 26, 2019
It is the nature of things that larger economies or companies tend to grow at lower percentage rates. Growth needs to be considered in absolute value as well as percentage. A lower percentage of a much bigger initial value still delivers more in absolute terms.
If you earned a basic salary of Ā£40,000 per year with a car allowance of Ā£5,000 per year and your boss said that, for this year’s pay rise, you can have either a 2.5% increase in your base salary or a 10% increase in your car allowance, would you go for the 10% just because 10% is more than 2.5%?
August 26, 2019
Yes but…we are told how good the EU project is yet compared to free independent nations like Australia, New Zealand, Singapore, America, Canada and others the EU bloc is failing.
High unemployment, high taxes , low growth, falling share of world trade.
Surely 28 nations working together should be a powerful bloc creating a club of thriving nations.
Yet they are not,
August 27, 2019
In 2018 the world economy increased by 4.15 Trillion dollars. The EU’s share of that growth was 1.4 Trillion dollars.
A group of countries comprising less than 7% of the world’s population delivered more than a third of the world’s economic growth last year.
August 27, 2019
The EU would have a good share of total world trade as the UK, France and Germany, three of the world’s biggest economies are involved.
Trends are more important than one year’s figures.
And trends in the EU are not good.
Low growth, high unemployment, awful levels of youth unemployment, rising taxes, rising debt levels, growing protectionist policies and a falling share of world trade.
August 26, 2019
We’re all going to crease up when you have to accept that you’ve been totally wrong about absolutely everything that you’ve ever said here, Andy. Except that of course you’ll be absent, as you have been every time you’ve been asked a question to which you have no answer. It must be sad going through life so negative about everything and everybody.
August 26, 2019
…because theyāre smart and have twigged that Europe is only a small part of a bigger and more prosperous world. My kids are part Chinese, part Indian and part English, I have a Chinese teenager staying with us this weekend who lives in NY and my nieces is in Indonesia on a university conservation project. I am a proud European and keen Brexiteer, but thereās a big world out there beyond Europe which the young want to be a part of. Donāt rob them of their future.
August 26, 2019
@ Newmania
Strangely when we oldies were starting out in life, we not only had no prospect of owning our own homes – we never even thought it possible…
But even when it became possible it wasn’t easy – with mortgage rates often shooting through the roof, it was impossible to have a life and pay the bills..
That 30 year olds now expect to own a home is is quite a thing – but don’t expect it all on a plate – every generation had to work for a better life – Nobody is owed anything…!
On the backs of the generations that went before expectations are higher than they used to be..What will your generation contribute to the future apart from a high grade at whinging?
Do you imagine we ‘old’ get a decent pension – Just look at it, barely at survival level… but of course, you want better than that…!
Your rhetoric demonstrates a severe lack of understanding of what the EU is and where it is going – Are you so sure of the indoctrination you received that you think the EU is the promised land? I doubt you could even say what is so good about the EU that you would throw away your freedom for…
Ignorance may be bliss for some, but ignoring the realities of life, as demonstrated in your post, must mean you are incandescent with bliss…No? Then do what the oldies did, work harder, and make use of that stiff upper lip.
August 26, 2019
Very well said, Mr Harris. But I doubt very much if Andy will read it – and, if she/he does, will be able to understand it.
The ‘cake and eat it’ mentality of many of the 20-somethings is quite staggering. The idea of saving and self-denial seems alien to them. ‘I want it all and I want it now’ seems to be the accepted mantra.
Those of us (unlike Andy) who worked hard, saved hard and ended up ahead of the game, with time and money left over eventually to help our self-sacrificing older generation who gave us such worthwhile values, can thank God that we’re better people for it.
I pity Andy and his family, to be honest. For her/him to be so hate-filled, they must have lived a very joyless and materialistic life.
August 26, 2019
Newmania
I think we have all done those things.( How was being saddled with a mortgage for life being able to āaffordā a house? Interest rates were HUGE in the 70s).
Not just the 30 somethings who are incandescent. I know a lot of 40 somethings who have been well betrayed. And how.
Rioting needs shared experiences and camaraderie and even then it never works because all political movements/ entities are infiltrated (except the immensely strong/powerful. Liblabcon).
French Rev = Napoleon etc etc
The young have been brainwashed with liberalism and those who canāt be brainwashed are hived off in their bedrooms.
Counting the generational costs of going off to fight in wars the amount we have all been cheated out of reaches epic proportions.
Cleverly Govts have divided and ruled giving rise to young hating old and so on.
Also there is a very prevalent attitude of ā Iām alright Jack ..so if you arenāt then YOU have done something wrong.ā However now it is total potluck as to whether anything in the system works for a given individual.
Destruction of middle management has a lot to answer for.
Basically EVERYTHING we ever relied on, believed in or looked to to keep us safe has been stripped away.
(It was ok picking up a briefcase and catching the 7.40 every morning for 40 years when we were proudly and happily English and we had a police force that arrested criminals).
And they still keep taking our money and we still keep voting for them to do it!
But the contract has been well and truly smashed.
August 26, 2019
Newmania
Who claims to work in financial services is unaware of the new workplace pension scheme introduced on to of National Insurance
Young people aren’t rioting because they’ve never had it so good. Sure buying a house is difficult in London, parts of the South East and parts of Birmingham, Leeds and Manchester . The rest of the UK its not though and in the South East its perfectly possible to buy a reasonable home within commuting distance of London
August 26, 2019
Hear hear! Well said Newmania.
I see again today El Presidente is demanding a continuation of free licence fees for the elderly.
The old have become parasites sucking the life-blood out of our country and our future.
Enough is enough. Axe all pensioner benefits immediately – let them face the same struggles everyone else has.
August 26, 2019
Any chance of you persuading leftist parties to adopt this as a policy for the next election?
August 26, 2019
They have paid lifetimes of tax into the system and many struggle to afford to pay their rising bills.
Have some sympathy for those less well off than yourself.
Oh sorry you are a young rich lefty liberal and so are selfish and single minded.
August 26, 2019
Andy, your stupidity knows no bounds. You obviously don’t realise that youngsters are taking up more NHS facilities than ever us oldies did at their age. There is note obesity, diabetes, liver failure and bowel cancer amongst the young than ever before and because they are too busy living the high life they are not having children who in the future will be paying for their pension. Looks like you are having another attention seeking day. Mummy out at the shops?
August 26, 2019
Fedup
” There is note obesity, diabetes, liver failure and bowel cancer amongst the young than ever before and because they are too busy living the high life.”
Have you any figures to substantiate this claim? The only obese these days are oldies who sit in front of the telly all day. The young I see are probably the best, leanest and sportiest of any generation.
The old however are sucking up NHS finances like never before. They are after all the generation of which it was said:
“If you can remember the 60’s you probably weren’t there”.
August 26, 2019
Margaret Howard
Yup here you go
According to health England
30% of children aged 2 to 15 in England were overweight or obese
35% of 45-65 year old adults were obese
29% of 65- 75+ adults were obese
Looks like once again you are totally wrong Mags
August 26, 2019
Why don’t you do some research for yourself like I did? Don’t expect others to do things for you. Its an EU trait.
August 26, 2019
This comment, MH, proves conclusively that you are totally out of touch with the real world. How sad that you never leave your southern middle class enclave
August 26, 2019
Ms Howard – are you REALLY Andy’s mum?
If so, you should teach her/him some basic manners. If you can remember any.
August 26, 2019
You don’t have any struggles, you tell us, you’re one of the one percent.
Not going to make an argument with you about the elderly as you are far too bigoted to even read it and I have better things to do than talk to a plank.
August 26, 2019
Which President? South American ? – please explain.
August 26, 2019
Andy
You really have no idea. I wish I could put you back through time.
I think you would benefit from the following experience WWII seems appropriate for you:
1) Surviving the blitz, being bombed out of your home with and with mouths to feed but left with not so much as a pot to piss in.
2) The Normandy beeches.
3) Arctic convoys perhaps.
4) Reserved occupation in a northern shipyard, working every hour God sends and in weather so cold your spanners will pull the flesh from your hands.
5) Or perhaps down a coal mine – not the ideal job during wartime.
You’d be broken in five minutes. Yet you slate those who did it for years without baulk, just so people like you can enjoy the freedom to show such vile disrespect.
Sure pensioners can be a bit annoying at times, but you have to bite your lip and remember that you too will be old one day.
Your obsession with pensioners however is a different matter….it appears serious and I think you need help before your anger gets you in a lot of trouble.
August 27, 2019
Why are you still living in this awful country?
August 28, 2019
Newmania, “That is not my experience . 30 year olds I know are incandescent with rage that they have no hope of owning a home and no chance of any decent pension”
I’m curious where abouts in the UK do they live? Do they live with parents or rent?
Why don’t they share a house with others or live with parents to save up? Have they been working from the age of 16 or 18? Or did they go to University? Do they work full time? The current NLW went up 5% for over 25 year olds its Ā£8.21 x 37.5 = Ā£307.87 x 52 = Ā£16,009.24 they can get a tax credit top-up to Ā£18,000 if they live alone. I worked three jobs to save a deposit as did my husband. We rented for a year, didn’t go on holiday for five years, rarely ate out, made our own work sandwiches, drank water instead of expensive over the counter drinks. We studied extra nights got extra qualifications. There are ways of helping yourself up and on and I know lots of lots of people that did this from scratch.
August 26, 2019
You never write articles about how to reform the one recipient of the taxes imposed upon the private, the State. I suppose for the contemporary Tory politician reform of Labour’s parasitic and strategically constructed client state is just far too politically inconvenient
Thatcher took the opposite view. She understood instinctively that reform involved CONFLICT and that conflict was a necessary consequence of confronting Labour. If Thatcher had adopted the mindset of today’s Tory politician the UK would now be a backwater
The left have always out-thought the Tories until Thatcher became PM, then the left crumbled. Why can’t you see that simple truth?
Reforming State activity that doesn’t involve conflict is the easy bit. Start reforming or certainly propose to reform the entire panoply of Labour’s inbuilt advantage
Reply I regularly write about spending cuts starting with ending all our EU payments. Did you not see the piece re HS2 etc?
August 26, 2019
@ Dominic – and who do you think was advising Margaret, in No. 10, in charge of the policy unit?
August 26, 2019
Your claims as to what constitutes true wealth may be approximately correct, John.
However, so far Labour have only given “in principle” proposals which would engage “the top five percent”.
After proper consideration to avoid unintended consequences, I’d doubt very much that the predictions of your own Project Fear on these would materialise.
We have seen this scaremongering, with every possible Labour government from the Right ever since the Labour Party was formed.
Reply The article did not mention Labour tax plans!
August 26, 2019
Agreed on the specific, but I took it in the general context of your recent series of articles on this topic John, as it appeared that you intended us to do.
August 26, 2019
As you keep saying Martin Labour have policy proposals for extra taxes on the better off, ie a new wealth tax, higher top rates of income tax, higher rates of capital gains tax, higher taxes (and other restrictions) on landlords, restrictions on lifetime gifts on Inheritance tax and higher tax rates on company dividends and profits.
You say anyone who mentions this is scaremongering.
Well you better write to the Labour shadow cabinet who regularly make speeches outlining their tax the rich plans.
August 26, 2019
I do not dispute the fact that Labour have sensible plans to tax the very rich.
I reject John’s assertion that it would also affect people, whom most would describe as being of commonplace financial status, however.
Re[ply I did not mention Labours plans
August 26, 2019
Oh so now you are reducing it to people of “commonplace status”
Well that’s nice to know,.
As long as it only affects people richer than you, eh Martin.
August 26, 2019
Martin in Cardiff
According to…….John McDonnell Primary school head teachers , Band 8 nurses , Police inspectors , and many others in ordinary middle management jobs are the very rich
August 26, 2019
Corbyn has advocated confiscation of business assets at arbitrary sub-market prices – a policy not implemented in any developed country in the last 40 years except for Venezuela (Venezuela pre-socialism was developed!) He has advocated āexpropriationā of second homes owned by foreigners. He seems to be advocating income taxes of well over 50%, and a possible trebling of CGT. He advocates political control of the media by having editorial staff āelectedā by workers – ie selected by unions. He wishes to reverse all the trade union restrictive practices abolished by Margaret Thatcher (a policy not reversed in 13 years of Labour govt), probably taking us back to the wastelands of the 1970s. And of course he has shown sympathy and support for enemies of the West, of freedom and democracy, from terrorist groups to extreme socialist regimes.
Corbyn, McDonnell et al are political extremists. Itās not just that they are left wing as eg Ed Milliband was, they are revolutionary socialists, operating outside the political mainstream, and the liberal-democratic traditions of the UK. Socialism of the sort they advocate has been tried in c 2 doz countries over the last hundred years. In each and every one of them it has led to economic disaster and political repression. Be warned.
August 26, 2019
Well said Richard
They now wear a suit and tie.
But they are happier in a grey boiler suit and a Trotsky silly hat.
August 26, 2019
What you are actually saying, without specifically doing so is that the Tory party is a high tax, high spend party which reneges on its tax pledges.
However, it still expects that those it has lied to will vote for it, because they are frightened of Corbyn. That is precisely what May believed, her main election plank being “vote for me, I’m not Corbyn”.
The outcome demonstrates that approach has long been a fantasy.
August 26, 2019
As ever you talk about a symptom rather than the cause. People understand and accept that they have to pay tax. What makes then angry is the fact that so much gets wasted, political and public servants are often rewarded for failure, the public sector enjoys far better pension terms than their private sector neighbours, often kept in a pool rather than being made redundant and no one has the political cojones to make structural and cultural changes.
We get bought off as voters with the usual āpenny offā tax sweeteners at budget time often with that immediately clawed back by items hidden in the Red Book.
I guess many of your voters are in the public sector, hence your reticence to comment publicly on what really needs to be done.
August 26, 2019
Good article, which clearly indicates how successive governments have failed us in so many ways… If ever there was an explanation of why government should be a whole lot LESS intrusive, this is it…!
Having financial rules change every 5 years or so is a nightmare – we need some consistency.
We really do need to make up our minds about what sort of society we are – One that imagines owning and making more of our own homes and other poessions is somehow immoral…. Or one that allows hard work and success to be rewarded, with the freedom to make personal decisions.
August 26, 2019
Taxation
Too many complicated rules, which change with such regularity it is difficult for the average person to keep track on what’s going on.
The fact that we now have over 18,000 pages of tax rules says it all really.
I have no idea if it is true, when in a post yesterday when it was suggested Wokingham Towns car park charges brings in over Ā£360,000 a year, but the collection costs are Ā£330,000, but if so, this just shows the absolute farce of charging/taxing the motorist for parking at all.
It would seem so much of our taxation income is just wasted on administration and poor selected expenditure.
The prime example is perhaps Foreign Aid, it does not sound a lot in percentage terms at 0.7% of GDP but it is a greater sum than we pay to the EU !
Time for a complete rethink if we want to prosper as a Country.
August 26, 2019
Oops not car park charges/ fee’s, should read parking fines.
August 26, 2019
Thats ok – we get the message…..its madness to spend nearly all the tax collecting something unproductive in the first place!
WBC – – – Pay for wardens to collect parking fines, use all the money gained that way, drive shoppers away, lose shop owners, lose council tax, lower footfall, economy req’d so make wardens redundant. Brilliant.
August 26, 2019
Housing costs are too high for young people, and amount to just as much a wrong as excessive taxes on the rest of us.
These costs need to be reduced by reduction in housing demand – make it law that any house can only be owned by a UK natural person, stop immigration and ban second homes in regions where housing pressure is particularly acute. There will always be a need for rented property, but to prevent the wealthy exploiting the less well off put a cap on the value of someone’s portfolio.
Young people are being held to ransom over the cost of housing, and it’s wrong. Wouldn’t it be good if some young people could take up a career in farming? But no, they can’t, because all the rural housing has been bought up as second homes and holiday lets, and is well out of their price range.
August 26, 2019
Dave older people also pay rent. They don’t all own houses.
August 26, 2019
Serious tax reform and simplification is a long lost cause, the situation just gets worse. There are very few politicians who will stake their careers on their beliefs- Douglas Carswell was an exception. TPA is largely unknown.
August 26, 2019
I believe I am right in stating that you cannot avoid the tax on dividends above Ā£2000 if you reinvest them rather than take them as income.
This was a little noticed detail of the Budget that reduced the annual tax free limit on dividends from Ā£8000 to Ā£2000.
August 26, 2019
I think you’re right, the exception being dividends generated by holdings within an ISA or a SIPP or by products like VCTs.
The annual tax free limit on dividends actually went from Ā£5k down to Ā£2k.
August 26, 2019
Sue
Absolutely , small business owners used to rely on paying their own wages via dividends at the end of a hard working year , that has now been stopped . It means that small investors are also much less likely to invest . It was an envy tax , a political fob off .
We need to start with reining in the state , it takes on responsibilities and interference that it needn’t have. Local taxes ought to be raised , managed and spent locally too so that we can assess value for money
August 26, 2019
You need to move your shares into an ISA. Of course this involves selling them and rebuying therefore incurring fees, CGT (if any profit above the limit) and stamp duty. Only 20k a year can be moved. Again a win win for the Treasury.
Clamping down on company bosses and contractors paying themselves in dividends has hit those living off their dividend income.
Of course the company bosses and contractors will find other loopholes but the pensioners trying to keep their savings income above inflation will probably be unaware of these changes.
August 26, 2019
Government is an institution that exists by theft. Nobody in their right mind would pay tax voluntarily because government is the most wasteful and corrupt vehicle possible to provide services. It does not provide decent services in any area it claims to. It enables big business and banks to continue the looting of the economy. It lies and cheats on a daily basis. It provokes and actively engages in illegal war. It exists to protect the elite and nothing more.
What we need is not lower tax, it is no tax at all.
August 26, 2019
Two points:
1 We need to stop this habit of creating new taxes every time we need to increase taxes. Just raise the basic rate of tax.
2 Taxes should be fair and at the moment Inheritance Tax, Stamp duty and landlord taxes arenāt. In particular the way that section 24 is calculated is bringing people with low incomes into the higher rate tax bracket. This should be the starting point for undoing the damage to the tax system.
August 26, 2019
Arnie . . .point 1) need to increase? – or reduce spend on frivolous subjects?
August 26, 2019
How about another topic.
Why does the govt throw billions away in Foreign Aid – that achieves nothing.
Why does the govt cut services while waving in a flood of unemployable freeloaders
Why does the govt house these freeloaders while we have our own homeless.
Why does the govt wave in those saying they want to “integrate” and when they get here DEMAND that WE change to THEIR ways – and want to force their culture by violence on us.
Why do those who come here to deliberately commit the worst crimes ( to ensure that they can claim they’ll be persecuted if deported ) get allowed to stay. They should be deported – no matter WHAT they face.
Why does our own govt treat us as second class citizens in our own country – and give preferential treatment to immigrants.
August 26, 2019
I gather some Ā£8bn is raised from CGT. Had we not already embarked upon proposals to spend every penny of the money we will no longer pay to the EU (largely where no-one will notice and where no credit will accrue) we could abolish it.
August 26, 2019
We very badly need a tax system that is simple and clear enough for all (including HMRC) to understand. I think simplification now comes in front of everything else after all the obfuscations of every Chancellor since Nigel Lawson, most of whom have been Conservatives, with Osborne and Hammond easily the worst, but probably with Clarke as a closing runner up.
However, like the Irishman in the story, to get where I want to, I would not start from here!
We need reform from first principles and we need a system that will stand the test of time without endless tinkering: people need to be able to plan ahead.
Pension saving is an excellent example of moving goalposts; when I started out there was a limit on what you could pay in to personal pensions, but no limit on what came out. For a time the limit became very high, then the lifetime allowance was introduced restricting what you could take out tax free, now there are limits at both ends. if there is to be a limit it is surely better to have it on what goes in: the impetus must be to be able make your savings grow to the maximum, cconsistent with risk.
A common failing has been the inability to think through likely unintended consequences, of which a current one is the impact of the combination of pension limits with the very high marginal rate when the Personal Allowance is lost. Doctors are the popular example of this but it applies to a great many others. Why did the Conservatives not oppose the restriction on the Personal Allowance?
The other big one has been Harold Wilson’s exclusion of the family home from Capital Gains Tax. Successive Chancellors have failed to face up to this one and instead have chosen to impose a complicated Stamp Duty regime. Because of tax free status and the impact of inflation on house prices, the home is seen as a prime investment rather than just somewhere to live. As an investment why should it not be brought into the CGT regime and Stamp Duty ended or greatly reduced, but certainly greatly simplified?
CGT because of its mostly voluntary nature, as you state, is a prime example of lower rates producing higher revenue. But why do we have to have both CGT and Inheritance Tax? Why not abolish the latter and make death a chargeable event for CGT? That would remove a few thousand pages of Tolley’s Tax Manual at a stroke. You could have a substantial lifetime exemption for CGT as they do in Canada. If the rate was at a sensible level it should be possible to remove rafts of complicated exemptions for business assets, EIS, farms, etc etc etc.
I could go on, but think I have said enough for you to see where I am coming from!
Reply No CGT on your home – if there were you would have to stay put, as the state would take a slug of the money you needed to switch homes.
August 26, 2019
lets look at the impact of your policy on wealth. First negative wealth, debt.
You have run up 13 trillion pounds of state debt. Most because you persist with socialist redistribution.
Ā£450,000 is the per tax payer share.
Next we can look at opportunity cost. What if your national insurance contributions hadn’t been taken, but invested?
Mr Average, at retirement, Ā£1,300,000, Ā£37,000 a year in income, at 65.
Since the current plans are to increase the retirement age to 75, that’s 10 years of income lost on top. 10 years of growth in the fund. You will force people to work longer, so 10 more years of payments into the ponzi, 10 years of lost growth.
That’s the core problem.
The solution is simple. Consent. We should have the right of consent. Not that MPs want others to be allowed consent.
August 26, 2019
It is amusing watching you all struggle with this.
The government does not impose taxes for taxes sake. It does it to pay for services.
Schools. Hospitals. Police officers. Housing. Roads and railways. The military.
And – the biggest expense of all – old people.
You are all outraged at my suggestion that spending on old people is stopped. You have had your whole lives to save for old age. If you have failed to do so – tough. Why should I subsidise you? And I do subsidise you. Very few, if any of you, have ever contributed as much as you now take out. This is unsustainable.
State pensions will not exist when I am old. I will be funding my own social care too. Like all the other benefits you have had throughout your lives which are denied to younger generations – free higher education, cheap houses, the benefits of the single market, child benefit, good plated pensions. All this you had. Much of my generation gets none of it.
Enough. Itās time to make the elderly pay their way.
August 26, 2019
I guess the same argument could work with the sick they should save why should they be subsidised by the healthy?
Do try to get some left wing party to adopt your policies. Especially the one about abolishing the military. Corbyn would like it, Give it a try: rejoin the EU with no referendum, abolish the military and cut all old age pensions etc. Iād be happy to support a knighthood for you if you manage to get them to take those up in time for the election.
August 26, 2019
The political parties entice votes by promising us loads if extra goodies.
They fail to explain these goodies need paying for by taxing us or by borrowing.
Many are foolish enough to vote fo these false promises.
We have gone from a State that spent Ā£350 billions in 2000 to one that will spend nearly Ā£900 billion in 2020.
Austerity you shout.
Blame just the old people many of whom are poor.
Hilarious but bordering on hate speech.
August 26, 2019
Andy, benefits for young mothers without partners and multiple children are far higher than they were when I was young. When my father was in hospital and there were no wages coming in my mother received a pittance. We were very poor. Its not like that now. Do stop going on about pensioners as if they were the only people receiving anything from the state. We have paid for our pensions. Are you too dense to see that? You have had this pointed out to you on several occasions. I truly wonder if you are the genius you think you are.
August 26, 2019
I don’t wonder that, Fedupsoutherner. I know he’s not. And I also know he’s never spoken to anyone outside rich home-owning southerners.
August 26, 2019
Q. Genius or argumentative fool?
A….answers on a postcard.
August 26, 2019
Dear Mr. Redwood,
@Andy,
Keep going Andy, I’m enjoying your posts today. Don’t hold back; let it all hang out!
It’s a terrible waste of one’s life though; going through your miserable little diatribe each and every day until they finally cart you off to your very own private nursing home with you still ranting on about ‘angry white old men’.
August 26, 2019
yawn
August 26, 2019
A good summary of the way governments cheat people by changing the rules when many taxes affect decisions that are made across the entirety of one’s lifetime.
Another example is the crass manner in which State pensions have been lumped into the ‘benefits’ budget. It is not a benefit: it is an entitlement, paid for by 35 years of graft. The fact is that every pensions provider invests the monies it receives as contributions in order to fund the retirement incomes of its clients… except the government. It takes the NI paid and squanders it then pays pensions from current receipts. It is this sleight of hand that demonises pensioners as benefits claimants when in fact they receive a rather poor return for the Ni they pay.
Furthermore, the decision to take ‘tax and NI’ from real benefits means that those who don’t contribute are having their entitlements paid up by the taxpayers’ charity. There is no material difference between giving someone Ā£70 and giving them Ā£100 and deducting Ā£30 tax/NI – except that they now have entitlements to more benefits and a pension.
It is a total disgrace that many who are paid under the NI threshold are not entitled to a pension when benefits claimants are effectively given a free pass.
August 26, 2019
What many fail to realise is that any years where they were contracted out means these years donāt donāt count towards the new state pension. Having got my 35 years in Iām told Iām only entitled to Ā£68 a week when I retire even though Iāve paid more NI into the system than most people. I have to claim the old lower amount.
On the other hand, I could be living in Europe in receipt of Tax Credits or Child Benefit for 35 years having never set foot in this country and Iād get a full state pension.
Millions will be affected by this new contracting out rule.
Yet again we see the Government taking from the hard working people in this country.
August 26, 2019
On the subject of allowances and what is taxed.
The annual allowance needs to go. This was originally set at a reasonably high level, but it has now been eroded by successive left-liberal governments (some of them claiming to be Conservative administrations) to the point where it is almost impossible to catch up in later life (which may, for many people, be the first/only time they have income they can save/invest). Bear in mind that they don’t have years of growth on monies invested late.
We have to ask ourselves this: do we prefer that people save for their retirement at some/any point in their lives, or do we want them to fall back on the State and be poor?
A simple question with an obvious answer. So why penalise it? Remove the annual allowance and let people catch up when they can.
The other rules around pensions are also questionable but to my mind this one stands out like a sore thumb. The 55% level of tax is also ludicrously punitive; it is difficult to see any justification for that.
August 26, 2019
BR…are you talking about ending personal allowance in the tax coding system? Or just other tax deductable allowances?
The former is madness, the latter probably overdue.
August 26, 2019
Let’s not forget council tax! It takes up say around 50% of the state pension, now there’s a nice fair progressive tax, not! Ā£2.5k a year to have the bins emptied, occasional road repairs, schools and not forgetting all those indexed linked pensions, CEOs on Ā£200k+ and mayoral cars some of which are still Bentleys. And it’s a tax that goes up ~5% England and ~10% Wales every year (twice/four times rate of inlfation), are you feeling good reading this, for me it beggars belief!
Wrexham Unitary asked their payers at the beginning of 2019 for ideas on how we would transform to reduce costs etc, neat little website and indicated what basic things they were considering, so I thought let’s write in, having been in industry 35 years and managed transformation and cost reduction programmes throughout my later years, I could have some tangible ideas to offer. Many ideas were listed with narrative, Performance Management, 3rd Party contract management, relocate to lower cost premises, sell council city centre buildings, share common services with adjacent councils; more outsourcing; but the only one acted on to date that I’ve seen is an advertisement for creation of a debt collection enforcement team with job adverts, why not outsource it and pay a % on collection? And is it really ALL bad debt….. or is it fraud? Very different things…
There are 408 principal (unitary, upper and second tier) councils in the UK ā 26 county councils, 192 district councils, and 190 unitary councils (source lgiu org uk) and I am damn sure they all do it markedly differently with different tools/processes and re-invent the wheel locally at enormous cost overall. It cries out for standardization (like NHS Digital perhaps) and a thorough check on every function/role to reduce the nanny state, Boris/Dominic hoping you can push this once the Brexit job is done and dusted š
August 26, 2019
I think the best way forward is to abolish CGT and Stamp duty.
The greater turnover of the Money Supply would raise a lot of VAT for the government, because people would feel freer with their spending on larger household items and more.
It would certainly feel fairer and the housing stock would be more fluid too.
Taxes that stop people doing what they want to do is not helpful for our economy and jobs.
August 26, 2019
EXACTLY.
Stamp duty should be zero to to say Ā£500k. Then at 5% to Ā£2m, thereafter say 6%.
IHT should be zero up to Ā£1m per person, thereafter 5% on above.
CGT flat rate 10%.
August 26, 2019
You have covered most of the tax iniquities, and one thing emerges. The tax system as it stands penalises the thrifty so that government can support the profligate while also indulging in a stream of vanity project that come nowhere near solving the needs of the country. The latter being weak in health, after care, education, policing, infrastructure and defence. The reason being, that the thrifty just like the motorist are seen as an easy target. The profligate are impossible to deal with because you cannot tax or fine those whose assets have been pissed againt the wall and have nothing.
There needs to be a radical review of what the state does to support the profligate. I ackowledge that IDS has made a good start. There needs to be an even more radical review of the UK tax system, based on at what level enterprise is not stiffled and just how much government should be involved in our lives.
My verdict on the UK is that on the roads and pavements you are close to running a surveillance state. PC prevents you tackling the very real problems in society or even admitting they exist. Tax is the greatest inhibitor of enterprise. If a sovereign UK is to thrive, those in government need the guts to start thinking outside the socialist box you mostly all have chosen to live in.
August 26, 2019
We need more politicians who are determined to do the right thing as opposed to doing whatever is the expedient thing
August 26, 2019
“Because so many people responded to these tax reducing ways of saving governments then cheated people by finding ways of taxing them after all.”
An egregious example is that Osborne gave investors (who are after all doing something more socially useful than merely squatting on land and waiting for its price to rise) a dividend allowance of Ā£5,000 per year, as an inducement to invest. But he also added any tax that would be paid on the surplus to the income tax bill, which would have taken me beyond the marginal rate, taxing other assets as well. So I worked out how much I could afford to invest at my normal annual dividend percentage – it was about Ā£100,000. I happily invested that sum from my savings, as well as the allowable ca. 20K in the tax-free ISA wrapper.
Then Hammond came along and almost immediately reduced the Ā£5,000 annual dividend allowance to Ā£2,000, also tinkering with tax on non-UK investments. I do not spend the dividends, I reinvest them, but HMRC is of course uninterested in any of that.
As a result, I am stuck with this annual extra tax liability I can only get rid of by siphoning holdings annually into my ISA and by selling the shares in my portfolio at a loss.
Is this the goal of Conservative economic policy? I anticipate many will say the tax is low – but I can see from HMRC’s calculations on my tax bill that Hammond’s move is clearly designed to nudge BR taxpayers into the higher rate, where they will pay a great deal more on assets.
August 26, 2019
It is clear that this Country requires a complete overhaul of our Taxation Laws and procedures and the “System” by which all are administered.
Perhaps you, SJ, can prepare a blueprint for such action and lay it in front of the New Chancellor who, like yourself, has a strong background in Banking. He might well adopt it for he is better qualified than was his predecessor..
Tolley’s Tax Guide – The ‘bible’ of the Inland Revenue is now over 17000 pages long which makes it the largest Tax Code in the world. What a terrible record for such a small, Conservative-governed country.
Surely there must be so much in there that no single individual actually knows what it contains. Of course such a massive log of detail requires a huge Government Department to run it and there lies the most probable reason why it has never ever been amended or cut down in size.
There is no time like the present to DO IT NOW! Make it easier for the British citizen and much easier for the SMEs et al, of this Great Country!
Less taxation means more disposable income, means more purchases means more productivity and more profits which ultimately means, more tax revenues.
August 26, 2019
Dear John,
we need clarity, about No Deal brexit. BBC running project fear, will you try to put something in media about how good no deal is, and stop the rubbish about EU blockade and blocking trade deals etc
Reply I have done sop many times and will do sop as and when invited on. I have published this many times here as well
August 26, 2019
For which we’re grateful.
But wasn’t Mr Gove’s department supposed to be doing something about refuting all the project fear stuff as and when it happened? Or have we misunderstood his role where all this false information in the MSM is concerned?
There should be much more refutation out there. Perhaps we don’t see it because the MSM is only (generally) printing the sensational stuff, and that’s due to flat-earth Remain’s hysteria, while the sensible Brexiteers continue with real life in the big, wide, waiting world.
August 26, 2019
https://www.dailymail.co.uk/news/article-7396707/Health-tourists-cost-NHS-150M-unpaid-bills.html
No wonder we are taxed so much.
August 27, 2019
[…] article was first published In sir John Redwood’s Diary and we re-publish with his kind permission. Ā ~~~ Ā *** Ā […]
August 27, 2019
Capital gains tax should be scrapped. It is one of the more expensive taxes to levy, being overly complicated, and with many exemptions. Inheritance tax captures most of the gains on private capital, to the extent that loopholes are not exploited. Gains on business assets are mostly exempted through roll over reliefs. It is a pointless tax, originally levied as a response to greed and envy from Marxists.