The problem is Brexit but the solution cannot be to rejoin because Farage would win the next election. So it’s down to subtle changes in existing taxes. Where do we start? The most obvious is the tax relief on pensions. This is 20% for most of us and 40% for those paying 40% tax and above. Why should a rich person get twice the tax relief as the majority of taxpayers? At one time they were able to put over a £1 million into their pensions. Make 20% the maximum tax relief on pension savings. Second anomaly is that much of the wealth of the Upper Echelons of our class system is held in land. As it never changes hands, it is not included in the Land Registry so changes in value are not taxed. This should be changed by requiring all land ownership to be registered with the Land Registry and taxed on change of ownership as part of inheritance tax. Yes, I know it is all held as Trust Funds but it is time that increases in the value of Trust Funds was taxed as capital gains. This would resolve the issue of a Wealth Tax. Yes, I know that the Royal Family would insist on being excluded but they could do as the previous Prince of Wales did and pay a voluntary tax calculated by their staff specialists. Third, is the existence of tax accountants. There are a reputed 90,000 of these people whose sole purpose is the avoidance of tax on the people who employ them. That Brown and Balls added over 4000 pages to the tax regulations was a boom to them, making it impossible for non specialists to master the allowances that are tax free. There is only one way to deal with this problem and that is by fixing a maximum allowance for each tax bracket. Those paying Standard Rate get the Standard Allowance, including any pension contributions, and no more; those on the 40% Rate get a maximum allowance of 10% of their salary taxed at 40%, which includes their pension contributions; those on 45% get a maximum allowance of 15% of their salary taxed at 45%, which includes their pension contribution. Allowances for investments, which currently swallow up a considerable proportion of their tax liabilities, will be treated separately and outside the tax system.
The problem is Brexit but the solution cannot be to rejoin because Farage would win the next election. So it’s down to subtle changes in existing taxes. Where do we start? The most obvious is the tax relief on pensions. This is 20% for most of us and 40% for those paying 40% tax and above. Why should a rich person get twice the tax relief as the majority of taxpayers? At one time they were able to put over a £1 million into their pensions. Make 20% the maximum tax relief on pension savings. Second anomaly is that much of the wealth of the Upper Echelons of our class system is held in land. As it never changes hands, it is not included in the Land Registry so changes in value are not taxed. This should be changed by requiring all land ownership to be registered with the Land Registry and taxed on change of ownership as part of inheritance tax. Yes, I know it is all held as Trust Funds but it is time that increases in the value of Trust Funds was taxed as capital gains. This would resolve the issue of a Wealth Tax. Yes, I know that the Royal Family would insist on being excluded but they could do as the previous Prince of Wales did and pay a voluntary tax calculated by their staff specialists. Third, is the existence of tax accountants. There are a reputed 90,000 of these people whose sole purpose is the avoidance of tax on the people who employ them. That Brown and Balls added over 4000 pages to the tax regulations was a boom to them, making it impossible for non specialists to master the allowances that are tax free. There is only one way to deal with this problem and that is by fixing a maximum allowance for each tax bracket. Those paying Standard Rate get the Standard Allowance, including any pension contributions, and no more; those on the 40% Rate get a maximum allowance of 10% of their salary taxed at 40%, which includes their pension contributions; those on 45% get a maximum allowance of 15% of their salary taxed at 45%, which includes their pension contribution. Allowances for investments, which currently swallow up a considerable proportion of their tax liabilities, will be treated separately and outside the tax system.