http://www.telegraph.co.uk/news/politic ... -rate.html


I said this would happen - people with this much money are much more mobile than the person on an average wage. If they don't like the tax rates they can simply up sticks and leave, which appears to have been the case.

To be honest, I'm somewhat sceptical that there are/were only 24,000 millionaires in the UK.

Have they left the country? Or have they simply had their accountants work harder and the money is no longer "visible"?

What's the point in earning shed loads of money if you're taxed half of it? IMO there should be a flat rate tax so everyone pays the same amount (percentage wise). Those at the lower end/poverty line would get refunded via tax credits.

I'm more concerned about how businesses can operate in the UK and pay minimal tax. That IMO is something much more important - closing tax loop holes would be important but then I imagine the tax rise would be passed on to the consumers.

£1m+ earners are presumably already using various tax avoidance schemes and the like anyway

You shouldn't really need tax credits if the tax-free allowance is high enough. It could be raised for couples and families, which would be much the same as a credit anyway.

Off Topic; I got £400 back off the tax man this month. If I was a millionaire I guess I wouldn't have noticed

Since the tax changes that would impact the rich were pre announced then the accountants could move income backwards or forwards into a lower tax year so that would explain a chunk of the change, and then don't forget that the financial sector has slashed bonuses.

^this

I'd be up for a raised threshold and a flat rate tax myself. You would get a lot of tax in from people who wouldn't bother with tax avoidance schemes.

The point where you start paying tax was recently raised to £10K buy the coalition (best thing they've done so far IMO). If you have individual tax allowances, any couple could earn 20K before they pay penny in tax. And they're only paying 20% on the first tranche above that.

The UK direct taxation system currently isn't anywhere near the most onorous around for the low paid. The problem is the amount of indirect taxation they pay as part of their daily lives. Indirect taxation is much more regressive than direct taxation.

Jon

You will still get loads of people who opt to pay less tax by moving to some offshore tax haven, rather than pay any tax.

It would depend what the flat rate is. I'm thinking 25% as that would make it not worth the hassle for a lot of people.

Of course, there would still be people trying to avoid it altogether, but some efforts could be made to try and close some of the loopholes.

When you get people reducing their tax rate to close to 3% why is even 25% acceptable. It might only benefit those that earn above say £40000 but not enough to emigrate and live abroad. Those above that will still live offshore. Even footballers who play here have substantial sums of their money paid offshore as image rights etc. so they might get a lot are also hiding a lot more.

Not true, the coalition intends to raise it to £10,000 eventually, but the current allowance is only 8105.

Raising the personal allowance also helps higher rate taxpayers* far more than basic rate taxpayers. It also stops helping people on a low income once the allowance exceeds their income. Raising it further wouldn't help those people at all, so it's a limited tool for people on a low income or part time workers.

*except when you earn over £100,000 and your allowances start to reduce.

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These are the loopholes I'm talking about trying to close. True, people in existing schemes wouldn't abandon them, but newcomers to higher rate pay might think, you know what? 25% isn't an awful lot.

Out of curiosity, why is this?

My beer reasoning would be it helps people on lower incomes more as a larger percentage of their income isn't taxed, whereas the more you earn the personal allowance becomes a smaller percentage...