Would re-introducing the POL TAX be a fairer way of collecting local taxes?

Ken H · 19 Feb 2019

gordonthemoron said:
VAT just replaced sales tax, different name, same thing

VAT covers far more items that Purchase tax ever did. And its creates a massive burden on business tracking input and output VAT. A sales tax would only happen at retail so a massive cut in admin.
VAT has crept into many areas, like domestic fuel since inception. And the EU wants us to put it on food and childrens clothes if we remain a member. Most EU27 countries charge VAT on everything.

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ac6000cw · 19 Feb 2019

gordonthemoron said:
VAT just replaced sales tax, different name, same thing

The old sales tax was called 'Purchase Tax', and there were different rates for different categories of goods. Also I think it was just a retail sales tax, whereas VAT is an all encompassing sales tax - it applies to business-to-business transactions as well as retail sales.

underbank · 19 Feb 2019

Bletchleyite said:
VAT is particularly bad, and I do hope that post-Brexit (as it's an EU baby) we move away from it.

Yep, have to agree. I'd far rather have a sales tax like they do in America. VAT is a massive burden to business (especially business to business transactions where VAT is mostly cancelled out so a waste of everyone's time), over-complicated, and lends itself open to vast loss through mistakes and fraud. The purely arbitrary threshold of £85k is also a real barrier to business growth and creates unfair price differentials for domestic customers.

Bletchleyite · 19 Feb 2019

gordonthemoron said:
VAT just replaced sales tax, different name, same thing

Not quite the same thing, but I don't like sales tax either. While easy to collect, it's a very blunt instrument that can be very regressive.

Bletchleyite · 19 Feb 2019

underbank said:
Yep, have to agree. I'd far rather have a sales tax like they do in America. VAT is a massive burden to business (especially business to business transactions where VAT is mostly cancelled out so a waste of everyone's time), over-complicated, and lends itself open to vast loss through mistakes and fraud. The purely arbitrary threshold of £85k is also a real barrier to business growth and creates unfair price differentials for domestic customers.

Just get rid. Taxes like VAT just exist because we can't be honest about the level of income tax (and related taxes) that is needed.

underbank · 19 Feb 2019

Bletchleyite said:
Just get rid. Taxes like VAT just exist because we can't be honest about the level of income tax (and related taxes) that is needed.

Yes, but only if income tax is reformed so that everyone pays it. At the moment, we have the NIC anomaly where only working age workers pay it, that needs scrapping too. Also, we'd need to scrap or drastically lower the personal allowance, again, so that everyone pays income tax. And while we are at it, apply income tax to all state benefits to create a level playing field.

VAT exists in the present system to "tax" the spending of people who are paying zero or tiny amounts of income tax.

But I do agree, we need to start being "honest" about income tax, including the fact that everyone should pay a fair rate on ALL of their income.

Bletchleyite · 19 Feb 2019

underbank said:
Yes, but only if income tax is reformed so that everyone pays it. At the moment, we have the NIC anomaly where only working age workers pay it, that needs scrapping too.

I'd go a different way with that - no tax relief on your earnings (keep it simple), but pensions treated as savings and therefore no tax at all on those up to a figure which would cover the vast majority of "non-filthy-rich" people. Same with stamp duty which was brought into being to tax very rich people and through house price rises and inflation ended up applying to near enough everyone.

Taxing benefits is pointless, it's a money go round. If appropriate, just reduce them.

AM9 · 19 Feb 2019

Bletchleyite said:
I'd go a different way with that - no tax relief on your earnings (keep it simple), but pensions treated as savings and therefore no tax at all on those up to a figure which would cover the vast majority of "non-filthy-rich" people. Same with stamp duty which was brought into being to tax very rich people and through house price rises and inflation ended up applying to near enough everyone.

Taxing benefits is pointless, it's a money go round. If appropriate, just reduce them.

That's the same as (directly) taxing state pensions (including NI). I pay tax at an enhanced 'K' rate on one of my company pensions but if I didn't get any there wouldn't be any tax. Just adjust the pension to fix it. Some might say that the NI rate is already accounted for.

R G NOW. · 19 Feb 2019

I would scrap k rates, my mum was on that once and they later changed it.

Mojo · 19 Feb 2019

whhistle said:
Because it rips me off every time I visit?
Everything is more expensive in London than elsewhere. Why should tax be any different?
(Playing a little devils advocate here)

Everything? Not sure where you’ve been going! Aside from certain pubs, day to day activities are cheaper or cost no more than anywhere else in the UK.

If I discounted the cost of my accommodation then my cost of living would be significantly lower than living anywhere else in the country.

whhistle · 20 Feb 2019

underbank said:
I'd far rather have a sales tax like they do in America.

I wouldn't!
I like to see the price I am going to pay, rather than have to work out what an additional 20% will be.
Different areas charging different rates? No thanks. Means I'd have to find out what that shire's rate is before I visited, impacting on whether I would visit or not.

That's what puts me off about Scotland.
There's now so many different laws to the rest of the UK that I'd never consider living there now.

Bletchleyite · 20 Feb 2019

whhistle said:
I wouldn't!
I like to see the price I am going to pay, rather than have to work out what an additional 20% will be.
Different areas charging different rates? No thanks. Means I'd have to find out what that shire's rate is before I visited, impacting on whether I would visit or not.

I don't think it is being suggested that it shouldn't be shown as inclusive, more that the simpler approach to tax is used. (Do some reading on the difference between VAT and a sales tax).

I don't personally like either. People who we have deemed to be non-taxpayers pay them.

That's what puts me off about Scotland.
There's now so many different laws to the rest of the UK that I'd never consider living there now.

There always have been - it has a completely different basis to its legal system.

underbank · 20 Feb 2019

whhistle said:
I wouldn't!
I like to see the price I am going to pay, rather than have to work out what an additional 20% will be.
Different areas charging different rates? No thanks. Means I'd have to find out what that shire's rate is before I visited, impacting on whether I would visit or not.

No reason why prices can't be shown as inclusive of sales tax (or have labels showing inc and exc pricing). It's a very minor point that's easily solvable.

Re different rates, we already have that within the EU where VAT rates can be very different across borders and also very different between different types of goods/services. Hence why people nip across the channel to bulk buy booze and fags. People do the same across land borders too, i.e. between Spain, Portugal, France, Italy, Germany, etc. where the difference is big enough to warrant the effort. But regardless of VAT, here in the UK, we have different pricing between different towns/regions - even the chains have different pricing in different outlets according to local market conditions.

R G NOW. · 20 Feb 2019

In the UK, has anyone noticed, that if you buy from a retail shop, prices include vat if charged, and if you buy from the likes of Jewson's or Travis Perkins you will see both prices on the labels, ex vat and including vat prices.

Bletchleyite · 20 Feb 2019

R G NOW. said:
In the UK, has anyone noticed, that if you buy from a retail shop, prices include vat if charged, and if you buy from the likes of Jewson's or Travis Perkins you will see both prices on the labels, ex vat and including vat prices.

That's just to make it easier for business customers (who if they're VAT registered don't have to pay the VAT in establishments intended primarily for trade sales - the likes of Makro is the same).

The law has changed a few times, but it used to be the case that they didn't show including VAT at all. As our family had a Makro card I got quite used to adding the then 15% on in my head (drop a zero and add half that again).

R G NOW. · 20 Feb 2019

Bletchleyite said:
That's just to make it easier for business customers (who if they're VAT registered don't have to pay the VAT in establishments intended primarily for trade sales - the likes of Makro is the same).

The law has changed a few times, but it used to be the case that they didn't show including VAT at all. As our family had a Makro card I got quite used to adding the then 15% on in my head (drop a zero and add half that again).

Thanks for highlighting that?. But I noticed that electrical wholesalers seem to only have ex vat on their items though.

underbank · 20 Feb 2019

Business to business sales only need to show ex-vat prices. Lots of suppliers/wholesalers also show inc-vat prices through voluntarily to help customers who aren't VAT registered (or non business customers who use someone else's card!).

Mutant Lemming · 21 Feb 2019

Mojo said:
Everything? Not sure where you’ve been going! Aside from certain pubs, day to day activities are cheaper or cost no more than anywhere else in the UK.

If I discounted the cost of my accommodation then my cost of living would be significantly lower than living anywhere else in the country.

and er… that relates to just you -

Mojo said:
Everything? Not sure where you’ve been going! Aside from certain pubs, day to day activities are cheaper or cost no more than anywhere else in the UK.

If I discounted the cost of my accommodation then my cost of living would be significantly lower than living anywhere else in the country.

There are cheaper and more expensive places in and around most towns and cities but overall London IS more expensive - that is a reality.

DynamicSpirit · 21 Feb 2019

Mutant Lemming said:
There are cheaper and more expensive places in and around most towns and cities but overall London IS more expensive - that is a reality.

It does depend a bit on what you're looking for, though I'd agree most things are more expensive in London.

My own observation would be:

Much more expensive in London; Accommodation
Somewhat more expensive in London: Eating out, cinema, restaurants, pubs, etc.
Similar price: Museums, tourist attractions like stately homes etc. Food in shops. In fact, most things in normal shops, as long as you avoid the expensive designer stores
Cheaper: Most public transport (although rail fares in some cities are cheap too).

whhistle · 21 Feb 2019

DynamicSpirit said:
Somewhat more expensive in London: Eating out, cinema, restaurants, pubs, etc.

Another good example is a 500ml bottle of cola/sprite/whatever from the likes of Costa (or similar).
Costs sometimes a quarter more in London than if I bought it elsewhere.

Not entirely sure but even something as basic as a McDonalds Meal I'm sure costs more in London than elsewhere, where the price seems to stay the same.

AM9 · 21 Feb 2019

DynamicSpirit said:
It does depend a bit on what you're looking for, though I'd agree most things are more expensive in London.

My own observation would be:

Much more expensive in London; Accommodation

Somewhat more expensive in London: Eating out, cinema, restaurants, pubs, etc.

Similar price: Museums, tourist attractions like stately homes etc. Food in shops. In fact, most things in normal shops, as long as you avoid the expensive designer stores

Cheaper: Most public transport (although rail fares in some cities are cheap too).

I agree with those observations. What drives higher prices in London is land and property demand, (accommodation, both residential and visitor) and labour costs, (most things where labour is a significant proportion, - cafe's, restaurants, building/decorating, cleaners, medical services etc.). Transport in the capital is priced low deliberately because a reversion to widespread private motoring is neither viable or acceptable.
In comparison, online supply services are located in low land and labour cost areas as the geographical location only affects deliveries to and from warehouses.

underbank · 21 Feb 2019

DynamicSpirit said:
Similar price: Museums, tourist attractions like stately homes etc. Food in shops. In fact, most things in normal shops, as long as you avoid the expensive designer stores

The commercial tourist attractions are certainly not similar. Eg the London Dungeon is almost twice as expensive as the ones at York and Blackpool. The open top buses are also ridiculously expensive. Supermarket prices are also a lot higher - my OH has a very good working knowledge of prices as she goes into 2 or 3 or the main chains every week - whenever we've been in the London area, she's always remarking about the higher prices.

Bletchleyite · 21 Feb 2019

whhistle said:
Not entirely sure but even something as basic as a McDonalds Meal I'm sure costs more in London than elsewhere, where the price seems to stay the same.

So far as I've observed Maccy's operates a policy of standardised prices throughout the UK (including, perhaps surprisingly, motorway service areas). Subway seems to now, too. Burger King doesn't, though, which is why you tend to see that at stations and not the other two.

(I know they're really SSP, but the main reason SSP would likely not be interested in franchising Maccy's is that the agreements require the standardised pricing).

Tetchytyke · 22 Feb 2019

Mojo said:
Yes, and I know Labour councils by and large are not usually as good as other councils.

The people of Northampton say hi.

What a ridiculous thing to say. Some Labour councils are good, some are bad, most are in the middle. Some Tory councils are good, some are bad, most are in the middle. It's more about local personalities and politicians than anything else.

Mutant Lemming said:
Wouldn't it be fairer to charge those who use the services more

If you get cancer should your tax bill go up to cover the cost of all those expensive drugs?

Tetchytyke · 22 Feb 2019

underbank said:
VAT exists in the present system to "tax" the spending of people who are paying zero or tiny amounts of income tax.

No, it exists to reduce income tax for the highest earners. It is extremely regressive as it affects low earners far more than high earners.

Say you pay £20 per week for gas. About £1 of that is tax. If your income is £50 a week that's a bigger chunk of your income than if your income is £500 a week. Multiply that across everything VAT is charged on- many food and drink items, clothes, shoes, fuel- and it is hugely regressive.

That was the problem with the poll tax. Flat rate charges are onerous on the poor and easy on the rich. It wasn't fair. It's also becoming a big but hidden problem with council tax now, with council tax benefit only covering a maximum of 75% of the flat rate council tax in many areas. Those changes by the Tories are also hugely regressive.

Bletchleyite · 22 Feb 2019

Arctic Troll said:
No, it exists to reduce income tax for the highest earners. It is extremely regressive as it affects low earners far more than high earners.

Say you pay £20 per week for gas. About £1 of that is tax. If your income is £50 a week that's a bigger chunk of your income than if your income is £500 a week. Multiply that across everything VAT is charged on- many food and drink items, clothes, shoes, fuel- and it is hugely regressive.

Completely agreed. What I find bizarre about it is how the EU, which is typically to the left of us, seems to push it on everyone despite it not being a left-wing thing.

underbank · 22 Feb 2019

Arctic Troll said:
No, it exists to reduce income tax for the highest earners. .

Even if you increased income tax on "the rich" to 100%, it wouldn't bring in anywhere near as much revenue as VAT. (And that's assuming "the rich" stay in the UK and pay it - in reality, they'd just beggar off and we'd have zero income tax revenue and far fewer workers!).

Butts · 24 Feb 2019

Arctic Troll said:
No, it exists to reduce income tax for the highest earners. It is extremely regressive as it affects low earners far more than high earners.

Say you pay £20 per week for gas. About £1 of that is tax. If your income is £50 a week that's a bigger chunk of your income than if your income is £500 a week. Multiply that across everything VAT is charged on- many food and drink items, clothes, shoes, fuel- and it is hugely regressive.

That was the problem with the poll tax. Flat rate charges are onerous on the poor and easy on the rich. It wasn't fair. It's also becoming a big but hidden problem with council tax now, with council tax benefit only covering a maximum of 75% of the flat rate council tax in many areas. Those changes by the Tories are also hugely regressive.

If you are against regressive taxation in principle does that extend to the excise duty on tobacco products ?

Poor people who represent the greatest number of smokers are effectively "coughing up" a lot more than the wealthy for a pack of tabs.

Surely the TV Licence is a "flat rate charge" regardless of income - are you against that ?

PeterC · 24 Feb 2019

Bletchleyite said:
I don't think it is being suggested that it shouldn't be shown as inclusive, more that the simpler approach to tax is used. (Do some reading on the difference between VAT and a sales tax).

Showing inclusive prices would require a separate price file for each county to distribute to your point of sale systems. Doable but it is an additional admin that costs money and that will end up on prices. Then you get to mail order and on-line. Where is the sales tax paid? The warehouse location, the office location that takes the order, the delivery address or the billing address? (why should I pay a different sales tax if my order delivered to the office?) It is rather a bar to entry by small businesses if you need to keep up with every local authority's tax rates.

JamesT · 24 Feb 2019

VAT is a consumption tax. It allows government to grab a piece of most economic activity, which income taxes may not capture. It’s also pretty efficient, lots of revenue raised without too much effort.
It’s generally only regressive as richer people tend to be able to save more of their income.
This is normally the point where Wealth Taxes get suggested, to capture some of the riches locked away. But they tend to be extremely unpopular as they’re taking away something you had, whereas income taxes merely reduce the amount you’re gaining.

Would re-introducing the POL TAX be a fairer way of collecting local taxes?

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