Categorized | matt's blog

One Tax to rule them all and in the darkness bind them.

We have more categories of tax in the UK than we have world cups in football. I know that means we have at least two, but I can count about seven different taxes without even thinking too hard. Obviously, the real purpose of tax is to extract money from citizens and give it to H M Treasury. As there are so many taxes, it is difficult to tell how much tax you actually pay in a single year.

Let’s take the example of a basic rate tax payer living on their own, in a rental home and earning around £35k for the 2013/14 tax year.  This would give them a take home income of £26,618 and so they have personally paid £8,382 in tax and national insurance. (Keep a note of these figures as you go along)

Add on council tax, this is £1201 on average for the current year. (£9583 so far then)

Let’s assume they drive an average of 12,000 miles per annum and this is 400 gallons of fuel. At 64% overall take, you will pay £1595 in fuel duty and VAT. (£11,178 so far then)

According to the family expenditure survey by the national audit office, the average household spends £1700 on VAT every year, if you include the VAT on energy bills and household goods. (£12,878 so far)

Bear in mind, this simple example is for a basic rate tax payer and he/she has not purchased any luxury items yet or paid stamp duty on a house. They have however, spent 37% of their salary on different taxes, the vast majority of which they cannot directly control or reduce. Would it make more sense to just tax everyone 37% and scrap all of the other taxes? Even tax benefits and interest at 37% and the just get rid of all the other nonsense. Obviously, there are a few problems such as visitors to the country not paying VAT etc., but overall – the cost of administering VAT would be gone.

That way, if the Government wants to raise more taxes, there is a transparent level we are all paying and some dark necromancer can’t hide tax increases in the dark recess of an Acronym. Think this sounds mad? Go and have a look at the UKIP manifesto.

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