Budget predictions and demands can be boring (read most of those in the Observer if you don’t believe me) but it is alegal not to make clear what you want knowing full well that you’ll be disappointed.
If that’s to be the case I’ve decided to go for maximum “I told you so” factor and show no restraint in what the Chancellor ought to say if he weren’t a neoliberal sophist.
1) Full county-by-county reporting, of course. It is an absolute necessity to make even more work for accountants.
2) Full automatic information exchange required with all our own tax havens now. And that they be required to offer the same to all countries without a record of serious human rights abuses. So that bit doesn’t apply to the UK.
3) All our tax havens be required to file limited liability entity accounts on public record. They’re ours so we can tell them what to do.
4) Reform of UK small business accounting so all had to file a full set of accounts as submitted to shareholders. And they should be required to be audited too. We can’t have something on public record that is potentially wrong.
5) Auditing for all businesses whilst I’m at it. And the term ‘business’ should be read loosely so as to include any investment activity or sale of goods. Yes, this includes car boot sales.
6) The beneficial ownership of all shares should be required on public record. To prevent sneaky accountants working around this, we require a public record of all securities such as loans, options, debentures, loan notes, IOUs, bank accounts, favours, ownership through pension schemes, intentions of reciprocation and so on.
8) Banks should be required to submit an annual report to Companies House and HMRC of all companies that have an open bank account to ensure that these companies cannot be struck off without filing accounts. Failure to file accounts automatically leads to right to access all bank records for HMRC and personal liability for tax due (of any sort) by directors.
7) Again, we need to extend this measure to all businesses. And probably non-business activities too.
9) A UK register of trusts should be created. Because trusts are just like paedophiles
10) Compulsory audits for trusts.
11) Compulsory audits for paedophiles.
12) The beneficial ownership of all companies be recorded on public record., which is point 6 again those who weren’t paying attention (a little humour, I’m sure you all are still reading avidly)
All these measures are intended to track the private sector tax base, make clear who is accountable for it and extend liability of those with obligation to pay it, all with the intention of defeating tax evasion once and for all.
1) Welcome the general anti-abuse rule and develop it;
2) Add a penalty regime for abuse of the GAAR. We should call it the PFAGAAR
3) Replace the double reasonableness test with an economic substance test. Introduce a definition of economic substance as outlined in my GRAPIST
4) Introduce a clearance procedure which imposes a punitive level of fees for anybody who is trying to gain certainty from the tax system. A minimum level should be introduced to stop small businesses wasting HMRC’s precious time.
5) Replace the name “General Anti Abuse Rule” with the name “General Rule Against Planning Intentionally Subverting Taxation”
6) Abolish the role of the advisory panel drawn from the tax profession who would have no role if the reasonableness test were removed.
7) Introduce an Authority Panel who will decide unequivocally when the GAAR applies. These people should come from the unions. It is not that HMRC are part of the tax profession (they are not), but that we cannot have anybody who might have any idea what the legislation might mean to do involved. Should the unions get confused, they will be able to consult independently as to what the law is supposed to do.
8) Abolish the GAAR.
9) Introduce a GRAPIST.
10) Specifically extend the GRAPIST to the abuse of double tax agreements, including those which the UK is not party to.
See also the section on transparency in case you missed it. Avoidance is the same thing as evasion, as is widely acknowledged now.
1) Increase the UK large company corporation tax rate to 30% with immediate effect. Today, not 1 April.
2) Legislate to prevent the reduction of corporation tax ever again. It may be increased but it cannot ever be reduced.
3) Introduce a minimum rate of corporation tax due on all UK resident companies. The rate should be based on the accounting profit (without adjustments dictated by tax law) drawn up under whichever set if accounting standards produce the greatest profit. The rate should be at least 30%.
4) Bring UK residence and permanent residence specifically within the scope of the UK GAAR.
5) When the GAAR is abolished bring UK residence and permanent residence specifically within the scope of the GRAPIST
6) Create the concept of permanent residence in UK law because we need it for the above points.
7) Specifically make the OECD profit split arrangement for attributing income to states within multinational corporations the UK’s preferred method for determining such issues in preference to the discredited arm’s length pricing method which is a loophole introduced by a secondee from the big four. Transactions conducted on an arms length basis are always avoidance.
8) Introduction of unitary formula apportionment taxation across the world with immediate effect. Ignore the whining of the OECD and EU on this particular matter.
9) Remove tax relief on all salary and benefit packages for any person within a group enjoying total salary and benefits (excluding pension contributions) exceeding £250,000 a year.
10) Introduce the concept of “enhanced disallowances” and give salary over £250,000 an enhanced disallowance of 200%.
11) Payments to accountants, tax advisers and lawyers should receive an enhanced disallowance of 500%.
12) Announce review on replacement of the small limited company by a new corporate entity that taxes all UK resident owners at their marginal income tax rate on all profits earned if not reinvested in the business to remove the use of limited companies as tax avoidance arrangements.
13) Immediately introduce a replacement of the small limited company by a new corporate entity that taxes all UK resident owners at their marginal income tax rate on all profits earned if not reinvested in the business to remove the use of limited companies as tax avoidance arrangements.
15) Remove the patent box loophole which was introduced by a big four secondee
16) Introduce a UK corporation tax charge on all dividends received with credit for underlying tax paid to put an end to territorial taxation. Automatically and unilaterally abolish all double tax agreements with other countries.
17) Specifically extend the GRAPIST to the abuse of there not being any double tax agreements, including those which the UK is party to and not party to despite having abolished them.
18) End the new exemption of offshore in-group financing companies. They are inherently unexempt.
19) Specifically extend the GRAPIST to the unexempt offshore in-group financing companies
20) Announce immediate review of CFC rules and enforce OECD and EU cooperation.
21) Remove all exemptions from CFC rules with immediate effect. Specifically remove the exemption that the controlling company needs to be UK resident in any way.
1) Cancel abolition of the 50p tax rate.
2) Increase personal allowance in line with inflation, preferring a VAT cut instead.
3) Prefer a VAT cut instead. Increase personal allowance in line with inflation.
4) Scrap new system of limiting tax reliefs and in its place limit tax reliefs with a new system.
5) Cap the rate of tax relief on gifts to charities under the control of the donor. With the GRAPIST in force and TAARs already in place this isn’t about curbing avoidance. It’s just to stop rich people giving money to charities of their choice rather than The State’s.
6) Announce a review on the integration of income tax and national insurance to be associated with introduction of a new, universal, family benefit to all available for work and all pensioners.
7) Integrate income tax and national insurance immediately. Abolish the universal credit and introduce a new, universal, family benefit to all available for work and all pensioners.
8) I can’t be bothered to think of something for those unavailable for work due to illness or disability.
1) Cut employer contribution rate to 10% for a year.
2) Keep employee contributions the same
3) Ignore class 2, 3 and 4 NICs altogether
4) Introduce an investment income surcharge on all unearned income over £5,000 a year excluding pensions (with a £25,000 limit for pensioners) to help pay for cut in employer NI contributions; to create a level playing field for those with earned and unearned income and to discourage the payment of dividends in lieu of salaries by small companies (which won’t exist any more due to point 14 under corporation tax). This is basically NICs for unearned income and will represent a significantly simpler solution than simply amending the income tax rates on savings and dividends.
3) See reference under income tax to review of future arrangements.
4) See reference under income tax to integrate income tax and national insurance.
1) Immediate cut in main rate to 17.5% to encourage poor people to take up cheap credit to buy crap again.
This is actually an income tax measure I’ve discussed above, but I don’t really do VAT. I’ve always considered it more of a “checkout girl’s tax”.
1) Align rates with income tax. Like they used to be before entrepreneurs’ relief.
2) Reduce entrepreneur’s relief over three years to £1 million pounds. £1 million is the only morally acceptable amount for entrepreneurs’ relief, which is why it was brought in at this level.
3) Make everything like entrepreneurs relief was originally.
4) Reduce annual allowance over 3 years to £5,000. I say 3 years to make it seem like there’s some thought gone into this. It hasn’t.
5) Deem all disposals by one spouse of an asset gifted from the other within three years of the date of the gift the gain of the original owner.
6) Introduce spouse-by-spouse reporting for all married couples. Marriage is the most common means of avoiding tax and we must increase its transparency.
Inheritance and wealth taxation
1) Announce a radical review of the tax to be replaced with a gifts receipt tax.
2) Introduce a radical set of wealth taxes including:
a) Land value taxation
b) Reform of Council Tax
c) Wealth taxation.
Wealth taxes are inherently easy to impose and administer so I don’t really need to say much more here. It’s all pretty straightforward.
Financial Transaction Tax
1) The time for the UK to cooperate with other nation states in Europe on the introduction of a Robin Hood Tax has arrived. But we need to ensure that we get a Robin Hood who doesn’t steal The State’s taxes like he does in Robin Hood Prince of Thieves or the neoliberal Disney cartoon version.
2) Conduct some historical research into Robin Hood, but call the Financial Transaction Tax something a bit snappier in the meantime. How about the Tracy Cullen Tax?
1) Announce that all banks will be required to wholly separate their investment banking operations from their Mainstream operations. The option of ring-fencing is to be removed and separation is to be mandatory.
2) Nationalise Royal Bank of Scotland and announce intention to be an active investor in Lloyds TSB. Just nationalise the loss-making mainstream operations though because it’d be against EU rules to do the investment bit.
3) Provide a combination of a national investment bank and regional banks (created from Royal Bank of Scotland if need be) with a minimum of £20 billion pounds of capital from quantitative easing for direct investment in capital infrastructure and smaller business investment creating jobs in the UK.
4) Plan for nationalisation of the bank clearing system and inter-bank trading systems with banks being granted licences to use such infrastructure in exchange for a fee in future. Nationalisation to be paid for in gilts with restricted trading rights until certain economic performance criteria (less than 1 million unemployed, for example, are met). This will make them highly attractive investments with a low cost of borrowing.
5) Nationalise the bank clearing system and inter-bank trading systems with banks being granted licences to use such infrastructure in exchange for a fee in future. We should pay for it in gilts with restricted trading rights until certain economic performance criteria (less than 1 million unemployed, for example, are met). This will make them highly attractive investments with a low cost of borrowing.
1) All pension funds to be required to invest not less than 1/4 of all new funds invested each year for the next five years in projects resulting in the creation of new employment in the UK in exchange for continued tax relief on contributions made. Pension schemes currently invest in cash stuffed in bed mattresses and trunks buried on desert islands and this must stop.
2) By default new pension scheme contributions to be invested in low risk infrastructure based projects unless the pension contributor opts for anther arrangement. Low risk infrastructure always provides fantastic levels of return because it is so low risk. That means that pensioners will be well-provided for.
Green New Deal
1) Announce a national programme of the sort now being promoted to insulate homes and business premises in Birmingham. I mean, of course, that the entire country should pull together to ensure that Birmingham is the most insulated place on Earth. Provide specific support needed to local authorities to create such programmes by removing current legal roadblocks. This includes just ignoring any and/or all the laws that we currently have.
2) Specifically permit and encourage local authorities to raise borrowed funds (including from pension funds) to invest in new social housing. Specifically permit and encourage with extreme prejudice.
Investing in regulation
No reform package can be delivered if the resources to ensure it is effective are not available. This programme is backed by a commitment to:
1) Provide Companies House with a significant staff increase to ensure that the UK corporate sector is properly regulated from top to bottom and those transgressing are brought to account. Companies House must receive an armed enforcement division.
2) To provide HMRC with the resources needed to collect the taxes due in the UK and to comprehensively tackle the tax gap. This will be mostly achieved by letting them have the GRAPIST that they have been crying out for. But we should consider my conscription programme. They could also have an armed enforcement division.
Both commitments will absolutely certainly deliver revenue yields many times in excess of their cost whilst creating new employment opportunities throughout the UK.
Whenever you just chuck money and people at problems they get sorted. Always.
HM Revenue & Customs has developed a corporate culture inappropriate for a national tax authority. It is, in particular, dominated by the opinions of accountants, lawyers and business personnel. These people are sociopaths and are simply there to insert loopholes into the tax law so that their buddies can fill their boots.
We need to get people who know absolutely nothing about the current tax system to run it.
This is a radical programme.
It includes current tax cuts, most especially by reducing VAT, but it also includes strong measures to reinforce investment in the most pressing areas of need. These are the creation of new jobs in the UK economy by telling people pension schemes how to invest their money, in energy conservation (sorry, I forgot to mention this much) and in new housing (again, I forgot to talk about this above).
To achieve this goal many of the reforms, for example in banking, pension reform and local authority borrowing are related as part of an integrated and innovative package designed by the world’s greatest tax expert, even if he does say so himself.
The problems of tax avoidance are tackled in a number of ways:
- by improving the general anti-abuse rule and extending its scope until it is a GRAPIST,
- by reducing the opportunity to abuse income tax and capital gains tax rules because the GRAPIST cannot deal with abuse because it isn’t a GAAR,
- by beginning a package of small company reforms which will see the universally recognised concept of a company turned into something new and exciting and uncertain and unrecognised in every other jurisdiction on Earth;and
- by radically transforming corporate and trust transparency within the UK and its tax havens through with a Bureacratic Renaissance where every single entity on the planet will require an audit
None of this can be achieved without increased borrowing and sources of this are indicated. Also, we should expect that our standard of living and life expectancy will diminish.
The economic activity the package of measures that is proposed will create will generate (I couldn’t decide between those two terms and my delete button is broken) a capacity to repay that borrowing in excess of the original sum borrowed. It is stressed, this is a debt reducing budget in a way that no austerity programme can be.
Finally, the Bureacratic Renaissance will introduce administrative reforms to ensure that the culture of our civil service and the agencies responsible for collecting tax and regulating business are essential and all such issues are addressed.
This is not the budget George Osborne will announce. I’ve already told you what he will announce. But this is the budget The State needs.
It is the Vision of Courage required to give us The State of Courage.