Skip to main content

What are the compliance and administration costs of present taxes?

The costs of tax adminstration and compliance sometimes comes up. This report from the Mirlees Review (table 12.2, page 1128 ) gives figures http://www.ifs.org.uk/mirrlees… PAYE Income tax has an administration cost of 0.7% of revenue and a compliance cost of 1.3% of revenue. Non-compliance adds a further loss of 1.4%. Self-assessed income tax has an administrative cost of 4.5% of yield and...

Continue reading

Rents and property taxes – who gains from low property taxes?

During the 1980s, the government introduced what were called Enterprise Zones, where no property tax was payable. The scheme was carefully monitored by consultants Cambridge Econometrics. The conclusion was “that 100% of the benefits from NNDR relief are passed into rents and therefore accrue to landlords although the range of uncertainty surrounding this statistical estimate puts the boundary...

Continue reading

Tinkering with rates is not helping companies

Tinkering with rates is  not helping business. So says the Institute of Fiscal Studies, a reputable think tank, which argues for land value taxation as a replacement for the UBR. Here is a link to an article in the Daily Telegraph. The original IFS report is here. It contains a detailed analysis of the system of business rates, discusses their economic impact and comes up with proposals for improvement....

Continue reading

Help to buy – scramble to buy

Britain’s rapid housing market recovery has sparked a scramble for land, writes Gill Plimmer in the FT. Bidding wars between building groups are pushing prices up 10 per cent or more. As sales of new-build homes have surged, on the back of the government’s controversial Help to Buy scheme, land traders say they are seeing six to 10 buyers competing for some sites, compared with just...

Continue reading

Employers’ tax incidence 2013

The figures, prepared by our resident accountant from the latest tax tables, show the excess cost to the employer compared to the real purchasing power of net wages ie the zero figure represents wages net of sales taxes. Thus for someone to earn £10,000 of net purchasing power, the employer must pay a surcharge of 55% on top, down from 60% (see last year’s figures for comparison) Any figure...

Continue reading

VAT cut boosted eating out

It is unusual for economics experiments to be carried out, from which firm conclusions can be drawn. A recent one in Sweden involved the reduction of Value Added Tax for restaurants from 25% to 12% on 1 January 2012. Analysis of the results by the national statistical bureau SCB show that the monthly sales volumes for November 2012 were 7.2% higher than in November 2011. Café sales were up by 11.3%,...

Continue reading

Business rate revaluation deferred

A circular issued last month announced the government’s intention to put off the 2015 UBR revalution for two years. The circular says “The Government has announced its intention to postpone the next business rates revaluation in England to 2017. Primary legislation will be brought forward through the Growth and Infrastructure Bill which was laid before Parliament on 18 October 2012. “Business...

Continue reading

Croydon Russian Doll reality

Croydon town centre has thrived since Tramlink opened in 2000. But now the retailers there are asking for a “rates holiday” and the foolish council seems as if it is going to take notice. Evidently, they have no understanding of a fundamental principal in economics, Ricardo’s Law of Rent.

Continue reading