The Boiling Frog: Taxing

Tuesday 7 September 2010

Taxing

Some lather has been generated today regarding this Telegraph report (my emphasis throughout):

HM Revenue and Customs could take direct control of every worker’s monthly pay cheque under plans to overhaul the error-prone income tax system.

Outrageous! All wages in the country will be paid to the government and then we receive a net salary based on whatever the government decides we should be allowed? Rightly disgraceful if true, but...

...note the operative word; 'could'. That's not the same as will.

And:

Instead of employers deducting income tax then paying gross salaries to employees, the gross monthly payment would go to an HMRC-run tax “calculator”, which would then pass the net salary to the worker.

The reform would mean the end of traditional monthly payslips, because employers would no longer be able to tell workers how much tax they had paid each month.

Ah 'would' if true...

The tax authorities are consulting accountants, lawyers and businesses on the plans to reform the pay-as-you-earn (PAYE) system.

Ah consultation, so not yet law then...

The potential shake-up has emerged after HMRC confirmed that inaccurate data means millions of people will be made to pay back underpaid tax, and millions more will get rebates.

Ah 'potential'...

To make PAYE more accurate, Treasury ministers have suggested that employers should provide HMRC with monthly updates on workers’ salary payments and other financial details.

Ah 'suggested'...

Such “real time information” could then be used as the basis of a new “centralised deductions” system that would give HMRC an unprecedented role in workers’ monthly salary payments.

Ah 'could'...

Ministers have asked tax experts to give their responses on the proposed new system later this month.

Ah 'proposed'...

Treasury sources said ministers had made no decision on overhauling PAYE, but insisted the Coalition is determined to make the system more accurate.

Ah 'had made no decision'...

So in effect it's all could, might and maybes. How strange that such a controversial proposal, which would be political suicide if ever introduced, is released at the same time as HMRC admits a cock-up.

Spinning? Media manipulation? I've never suggested that for one minute.

2 comments:

Bucko7 September 2010 at 14:09
Maybe they are just testing the waters to see what the reaction is.
Im sure if theres not to much backlash, the "could"s soon turn into "will"s. And they are still free to deny the plans if the political fallout is to heavy.

We need to make that fallout heavy as we can.
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TheBoilingFrog7 September 2010 at 14:33
You're right maybe they are testing the water, but the reality of actually implementing such a scheme would destroy any government let alone a weak coalition.

IIRC Labour proposed this before the last election (I can't yet find a link) but it was never taken seriously.

Giving your whole salary to the government would be a green light to riots - no sensible (power hungry) government would be brave enough to try it.
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The British Government Knew The Consequences In 1971

Foreign and Commonwealth Office 30/1048 - 1971

...the transfer of major executive responsibilities to the bureaucratic Commission in Brussels will exacerbate popular feeling of alienation from government. To counter this feeling, strengthened local and regional democratic processes within the member states and effective Community regional economic and social policies will be essential.

Parliamentary sovereignty will be affected as we have seen. But the need for Parliament to play an increasing (if perhaps more specialised) role may develop. Firstly, although a European Parliament might in the longest term become an effective, directly elected democratic check upon the bureaucracy, this will not be for a long time, and certainly not in the decade to come. In the interval, to minimise the loss of democratic control it will be important that the British Parliamentarians should play an effective role both through the British membership in the European Parliament and through the processes of the British Parliament itself.

Test

Tuesday 7 September 2010

Taxing

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