How Would You Generate Revenue For the UK And Make Life Easier For UK SMEs?

[NickGrogan]

Money circulating in the UK is sterling. In order to give you sterling the other party would have had to obtain sterling from this country. The amount of sterling in circulation remains the same. The ownership of it has changed.

Nope, wrong again.

There is a lot of sterling held outside the UK, mainly by foreign governments and banks. The IMF puts the figure at $565,924M equivalent. So there is plenty of sterling available.

Also banks can and do create money as needed, its not a closed system.

 

[NickGrogan]

The tax code is deliberately complex as it affords the opportunity for the State to hide how much money it actually takes from people that are too dense or laissez-faire to work it out - for that reason it won't ever change.

£1 worth of profit... 25% taken as Corp Tax. The balance of after tax profit has to least go in part to settling our business rates bill (turnover tax), so further real deduction. Then the "remaining" after tax amount following Corp and Business taxes can be declared as a divi or income, where the gov will be taking as much as another 40%+ chunk if you earn even a reasonable amount of money (frozen tax bands mean no longer is this a lot). You then either spend it and give another 20% straight to the gov in VAT, put in your car, fuel duty etc. Or you "invest" it and if you are lucky enough to make an inflation adjusted loss (no indexation anymore) over 20 years you will now pay 24% capital gains tax on a real terms loss. Does anyone know how much of that £1 is actually left to sit in your bank account...beats me, but it ain't a lot. And if you die the gov will come and take as much as 40% of what has been leftover. Of course, you could choose to earn basically not a lot and these numbers don't apply but that is part of the problem, noone is motivated to earn if you are left with mere pennies in the £ after it filters through the myriad of taxes they take at every step.

Why are you paying your business rates on post tax profit? Also business rates are based on rateable (rental) value of the property, not turnover.

 

[SillyBill]

Why are you paying your business rates on post tax profit? Also business rates are based on rateable (rental) value of the property, not turnover.

By that I meant it was a tax that applies because you exist in most cases, immaterial of whether you make a profit. I gather most don't even pay business rates on here so as someone who pays a lot I should've got that right; long day and I accept not correct to say paid post tax. It should have put before the £1 profit, either way, its taken and we're massively taxed.

 

[DontAsk]

£1 worth of profit... 25% taken as Corp Tax. The balance of after tax profit has to least go in part to settling our business rates bill (turnover tax), so further real deduction. Then the "remaining" after tax amount following Corp and Business taxes can be declared as a divi or income, where the gov will be taking as much as another 40%+ chunk if you earn even a reasonable amount of money (frozen tax bands mean no longer is this a lot).

Similarly to the question about business rates, why are you saying income is taken after CT?

 

[HFE Signs]

In theory, yes, but what about the threat to the environment? You cannot have infinite growth, the planet cannot survive. And that would not be good for the government's primary purpose.

I think that is a separate argument and is based on population control. The idea that rinsing businesses to save the planet won't end well for anyone. There is a tipping point at which businesses can't or won't survive, this will then lead to less tax revenue, something the Labour Party struggle to grasp.

 

[Duke Fame]

By that I meant it was a tax that applies because you exist in most cases, immaterial of whether you make a profit. I gather most don't even pay business rates on here so as someone who pays a lot I should've got that right; long day and I accept not correct to say paid post tax. It should have put before the £1 profit, either way, its taken and we're massively taxed.

Labour have promiosed to get rid of business rates for about 3-4 years now. The problem is, for 3 years, they haven't indicated what will replace business rates and here in there first budget, we are still none the wiser.

It's policy by focus group. As they don't have business experience themselves, they have asked businesses what they don't like and businesses have rightly said "business rates" as it's a fixed cost with no reflection on revenue plus it's illogical (A square metre of my wife's shop is valued higher than a square metre in Harrods).

The problem is Labour have no clue as to what to replace them with. I'd say a LVT would be better, combined with a local VAT rate. At least that way, the local authority has an incentive to make their area 'business friendly'.

Ultimately, businesses do not vote and none of the main parties have a clue or care about businesses.

 

[Duke Fame]

I think that is a separate argument and is based on population control. The idea that rinsing businesses to save the planet won't end well for anyone. There is a tipping point at which businesses can't or won't survive, this will then lead to less tax revenue, something the Labour Party struggle to grasp.

You are so right. The population are all of a sudden panicking that we aren't having enough children because it will create a pension crisis because we insist on running our pension system as one giant Ponzi scheme.

Of course, it’s inevitable that we have a reducing population as it’s pretty clear that the best thing for the environment is to reduce the population and the country has become obsessed with saving the environment.



We can’t have it all ways.

 

[James]

You are so right. The population are all of a sudden panicking that we aren't having enough children because it will create a pension crisis because we insist on running our pension system as one giant Ponzi scheme.

Of course, it’s inevitable that we have a reducing population as it’s pretty clear that the best thing for the environment is to reduce the population and the country has become obsessed with saving the environment.



We can’t have it all ways.

I think most people care about the environment but its politicians that have become obsessed with the green agenda. They have created a false economy and narrative especially around electric cars.

 

[Duke Fame]

I think most people care about the environment but its politicians that have become obsessed with the green agenda. They have created a false economy and narrative especially around electric cars.

Absolutely, what the politicians have mistaken for an appetite for 'greenness' is actually an appetite for cheaper energy.

I really don't understand why Europe has obsessed toward Electric cars, yes, they have their place but they've literally killed the car industry in Europe.

The great irony that VW opened up two dedicated coal fired power stations two build electric cars surely can't be lost.

 

[Clinton]

I do not agree with some of the budget changes, however, does anyone else have ideas on how we could get out of the mess left by the last lot?

It's not "the last lot". As much damage as the last lot caused, let's not forget that politicians of both main parties have been ripping us off for decades! From selling off our gold to Brown's pension raid, to putting student debt on young people to selling off our national assets and leasing them back at exhorbitant costs, Labour have been just as bad if not worse.

A pox on both their houses.

What would I do with the nation's finances? I haven't given it detailed thought but here are some initial ideas that need to be fleshed out a bit when I have time to draw up a proper manifesto.

• Sack half the civil servants. Make the others attend the office for 5 days a week (8 preferable). Announce an immediate 90% cut to their gold plated pensions to make them as poor as everyone else;
• Make employing DEI staff illegal. That way government bodies will have to get rid of them but also councils, quangoes, charities, corporates. That'll save billions. Rule that anyone who worked in DEI should not be eligible for UC or JSA. That'll save billions more;
• Close the big black hole that is the NHS. It's a patient that desperately needs a Do Not Resuscitate. Give some drunken monkeys the job of creating a new health service; it'll be better than the existing one;
• Scrap almost all benefits. If you have a kid, you need to provide for that kid. Make people take some bloody responsibility for their lives. The government should get out of the business of compensating for every bad decision people make;
• Get the government out of the education business as well. They've ruined schools which are now just bastions of lefty brainwashing and
• Stop the Net Zero con. We know it's just a way of manipulating us. Put efforts into making China, India etc catch up to our current environmental standards first. NATO, do something about China's polluting the world!
  

Gotta rush off now, but mull it over. If I stand for election, I hope I can count on @Newchodge 's vote.

 

[peterrepair]

Make the others attend the office for 5 days a week

This is a bit of false economy. All it will do, it will wear them down and cripple their house budgets. If work can be done from home, there is no need to go to office.
This return to office thing is propaganda designed to help Landlords maintain the value of their portfolio.
Many government buildings are leased from private corporations and if they are idle, they drop in value.
Secondary reason is to give the economy a fake push. Those civil servants will be buying tickets, coffee, lunches and so on. But that money will be spend on things that are not desired and other businesses will suffer.
I mean it works, because people generally don't like anything government related, so making civil servants "suffer", gives a nice dopamine boost, but it is pointless. It will just ensure that the rich continue to line their pockets with no actual benefit to the public.

 

[Clinton]

All it will do, it will wear them down and cripple their house budgets. If work can be done from home, there is no need to go to office.

OK, good, we can send them to Rwanda, they can work from home there. We're running out of oxygen in the UK!

Also, that would free up a lot of housing.

 

[Duke Fame]

This is a bit of false economy. All it will do, it will wear them down and cripple their house budgets. If work can be done from home, there is no need to go to office.
This return to office thing is propaganda designed to help Landlords maintain the value of their portfolio.
Many government buildings are leased from private corporations and if they are idle, they drop in value.
Secondary reason is to give the economy a fake push. Those civil servants will be buying tickets, coffee, lunches and so on. But that money will be spend on things that are not desired and other businesses will suffer.
I mean it works, because people generally don't like anything government related, so making civil servants "suffer", gives a nice dopamine boost, but it is pointless. It will just ensure that the rich continue to line their pockets with no actual benefit to the public.

Interesting take, the leases are usually in place for a long time so if the govt departments are paying the rent, the portfolio stays the same, its a simple npv calculation.

This is a bit of false economy. All it will do, it will wear them down and cripple their house budgets. If work can be done from home, there is no need to go to office.
This return to office thing is propaganda designed to help Landlords maintain the value of their portfolio.
Many government buildings are leased from private corporations and if they are idle, they drop in value.
Secondary reason is to give the economy a fake push. Those civil servants will be buying tickets, coffee, lunches and so on. But that money will be spend on things that are not desired and other businesses will suffer.
I mean it works, because people generally don't like anything government related, so making civil servants "suffer", gives a nice dopamine boost, but it is pointless. It will just ensure that the rich continue to line their pockets with no actual benefit to the public.

However, i think the govt should take london waiting away if people don't need to he in the office.

 

[Newchodge]

However, i think the govt should take london waiting away if people don't need to he in the office.

London weighting was intended to cover the increased cost of living in London, not just commuting.

 

[Duke Fame]

London weighting was intended to cover the increased cost of living in London, not just commuting.

Quite but if you are WFH, you don't need to live in London, you can live in Sunderland and WFH. The fact a civil servant chooses to live in London is a lifestyle choice and not for the taxpayer to fund.

 

[peterrepair]

Interesting take, the leases are usually in place for a long time so if the govt departments are paying the rent, the portfolio stays the same, its a simple npv calculation.

Correct, but leases may not get renewal or tenants can look to invoke break clause and the properties that are on the market, may not be getting as much interest.

 

[Newchodge]

Quite but if you are WFH, you don't need to live in London, you can live in Sunderland and WFH. The fact a civil servant chooses to live in London is a lifestyle choice and not for the taxpayer to fund.

Ah, right. So thousands of civil servants who had to live in or near London because their job required it are now expected to incur the cost and upheaval of moving to a cheaper part of the country because the place they live is no longer a requirement for their job?

For those 100% working from home, base the weighting payment on their home address.

 

[Duke Fame]

Ah, right. So thousands of civil servants who had to live in or near London because their job required it are now expected to incur the cost and upheaval of moving to a cheaper part of the country because the place they live is no longer a requirement for their job?

For those 100% working from home, base the weighting payment on their home address.

No, No, No.

If civil servants want to work from home, they can't expect London weighting as it's not important that they live in London. If they are going into the office everyday, pay it.

Perhaps , replace london weighting with a London office attendance payment but they can't have it all ways.

We should be looking to save money, if people can WFH.

 

[Duke Fame]

Correct, but leases may not get renewal or tenants can look to invoke break clause and the properties that are on the market, may not be getting as much interest.

Which is the risk of having property.

If the govt have break clauses they should trigger them if they don't need the office space.

The landlords can convert offices to resi if they can't get a tenant, that's the way the property market should work or they simply tear down the building and erect something people want.

 

[peterrepair]

Which is the risk of having property.

If the govt have break clauses they should trigger them if they don't need the office space.

The landlords can convert offices to resi if they can't get a tenant, that's the way the property market should work or they simply tear down the building and erect something people want.

That's not how the real world works.

 

[japancool]

Obviously, bring back slavery. Why should employers have to pay their workers anything? Don't you know how many businesses aren't viable because they have to pay wages?

Money is far too good for the masses to have.

 

[Duke Fame]

That's not how the real world works.

It is, the landlord rents out the building as long as the lease is in place and thereafter, the tenant wants to stay.

If its a civil service dept. Its fairly risk free for the landlord but the department can move out at the end of the lease.

That's ok, especially as wfh means less demand for office space.

 

[NickGrogan]

Simpler way. The Government buys the building, no more lease to worry about. Multiple departments are merged into less buildings are many civil servants are either not needed or work from home.

The government then redevelops the buildings into residential, retail, hospitals, prisons, data centres, etc. Whatever is needed.

Money is not an issue as buying will be cheaper than renting, compulsory purchase can be used to ensure "fair" prices and planning permission is not an issues as the government has ultimate approval.

 

[Duke Fame]

Simpler way. The Government buys the building, no more lease to worry about. Multiple departments are merged into less buildings are many civil servants are either not needed or work from home.

The government then redevelops the buildings into residential, retail, hospitals, prisons, data centres, etc. Whatever is needed.

Money is not an issue as buying will be cheaper than renting, compulsory purchase can be used to ensure "fair" prices and planning permission is not an issues as the government has ultimate approval.

A lot of buildings were sold and leased back, I'm not sure if that applies to the civil service etc but our local VAT office went through that and it's laid empty since the mid 2000s. The local council did it as well, it believed that businesses would be desperate for office space.....they are not.

 

[NickGrogan]

A lot of buildings were sold and leased back, I'm not sure if that applies to the civil service etc but our local VAT office went through that and it's laid empty since the mid 2000s. The local council did it as well, it believed that businesses would be desperate for office space.....they are not.

See thats the problem, government and councils have vast amounts of empty offices/warehouses/etc that is sitting doing nothing.

If no one wants to rent it, that's fine. Convert it to retail or housing. Make it into a hotel or a prison.

Knock it down and build a park with tennis courts and a children's play area.

Upgrade the energy connection and put a large battery in place to balance the grid and make net zero more possible.

Anything is an improvement on simply letting it stand, decaying, wasting space and money.

 

[gabrielakurtz]

The tax code is deliberately complex as it affords the opportunity for the State to hide how much money it actually takes from people that are too dense or laissez-faire to work it out - for that reason it won't ever change.

£1 worth of profit... 25% taken as Corp Tax. The balance of after tax profit has to least go in part to settling our business rates bill (turnover tax), so further real deduction. Then the "remaining" after tax amount following Corp and Business taxes can be declared as a divi or income, where the gov will be taking as much as another 40%+ chunk if you earn even a reasonable amount of money (frozen tax bands mean no longer is this a lot). You then either spend it and give another 20% straight to the gov in VAT, put in your car, fuel duty etc. Or you "invest" it and if you are lucky enough to make an inflation adjusted loss (no indexation anymore) over 20 years you will now pay 24% capital gains tax on a real terms loss. Does anyone know how much of that £1 is actually left to sit in your bank account...beats me, but it ain't a lot. And if you die the gov will come and take as much as 40% of what has been leftover. Of course, you could choose to earn basically not a lot and these numbers don't apply but that is part of the problem, noone is motivated to earn if you are left with mere pennies in the £ after it filters through the myriad of taxes they take at every step.

How much of a £1 profit actually ends up in your bank account after all the taxes, like Corporation Tax, Business Rates, Income Tax, VAT, and Capital Gains Tax, and why is it so hard to keep track of?

 

[DontAsk]

How much of a £1 profit actually ends up in your bank account after all the taxes, like Corporation Tax, Business Rates, Income Tax, VAT, and Capital Gains Tax, and why is it so hard to keep track of?

Simple business accounting software does all of that (apart from maybe CGT, which doesn't apply to business profit in any case) and VAT is not a cost to the business.

 

[peterrepair]

VAT is not a cost to the business.

In some circumstances it sort of is, temporarily. Like when you need to make large investments into stock that exceed sales, then it can take few months to recover the monies.

 

[DontAsk]

In some circumstances it sort of is, temporarily. Like when you need to make large investments into stock that exceed sales, then it can take few months to recover the monies.

That's just basic cashflow management.

VAT is not a cost to the business. It does not come off profit.

 

[peterrepair]

Semantics

 

[SillyBill]

Similarly to the question about business rates, why are you saying income is taken after CT?

I said divi or income. Divi would be. Yawn.

 

[SillyBill]

Labour have promiosed to get rid of business rates for about 3-4 years now. The problem is, for 3 years, they haven't indicated what will replace business rates and here in there first budget, we are still none the wiser.

It's policy by focus group. As they don't have business experience themselves, they have asked businesses what they don't like and businesses have rightly said "business rates" as it's a fixed cost with no reflection on revenue plus it's illogical (A square metre of my wife's shop is valued higher than a square metre in Harrods).

The problem is Labour have no clue as to what to replace them with. I'd say a LVT would be better, combined with a local VAT rate. At least that way, the local authority has an incentive to make their area 'business friendly'.

Ultimately, businesses do not vote and none of the main parties have a clue or care about businesses.

I take almost no interest in that noise TBH, as if replacing rates is going to decrease the tax take the gov wants from business. It is just a "distribution" debate, like everything the government does. I usually expect that whatever the outcome I will end up paying more and I am rarely disappointed that way. My cumulative tax bill is £50k higher per year across CT and Business rates inside 2 years since the business rates value revision and CT going up over 30%; I despise giving them more to waste; and I already felt overtaxed 2 years ago.

 

[Gill Courage]

How much of a £1 profit actually ends up in your bank account after all the taxes, like Corporation Tax, Business Rates, Income Tax, VAT, and Capital Gains Tax, and why is it so hard to keep track of?

It's not. Business rates, VAT and CGT are not relevant to "profit". Just CT and then income tax, if you take it as a dividend. Or you could payroll it before that and pay NICS and income tax rather than CT. Either way, you are likely to pay a LOT of tax. Too much to be qorth the effort and risk? That's your call.
A more pertinent question is how much of your Gross Profit ends up in the taxman's pocket? That is very difficult to calculate because there are so many ways to do it. You could just take costs of raw materials from the sale price, or you could add in wages (which then involves NICS),
The raw figure is that the government expects to take, in some form, around 41% of everything that the country earns in the next financial year. They intend to spend slightly more than 45%. Anyone who runs a business understands that this is not "sustainable" in any way but governments have magic money trees, don't they?

 

[Newchodge]

It's not. Business rates, VAT and CGT are not relevant to "profit". Just CT and then income tax, if you take it as a dividend. Or you could payroll it before that and pay NICS and income tax rather than CT. Either way, you are likely to pay a LOT of tax. Too much to be qorth the effort and risk? That's your call.
A more pertinent question is how much of your Gross Profit ends up in the taxman's pocket? That is very difficult to calculate because there are so many ways to do it. You could just take costs of raw materials from the sale price, or you could add in wages (which then involves NICS),
The raw figure is that the government expects to take, in some form, around 41% of everything that the country earns in the next financial year. They intend to spend slightly more than 45%. Anyone who runs a business understands that this is not "sustainable" in any way but governments have magic money trees, don't they?

Well, they have the Bank of England.

 

[Duke Fame]

I take almost no interest in that noise TBH, as if replacing rates is going to decrease the tax take the gov wants from business. It is just a "distribution" debate, like everything the government does. I usually expect that whatever the outcome I will end up paying more and I am rarely disappointed that way. My cumulative tax bill is £50k higher per year across CT and Business rates inside 2 years since the business rates value revision and CT going up over 30%; I despise giving them more to waste; and I already felt overtaxed 2 years ago.

Whichever way we vote, the government always gets in and they are always crap