Autumn Statement – right or wrong?

Whatever happens today – who is right or wrong?

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If you are following George Osborne, you will say that he has doing the right things and Ed Balls is talking rubbish, as he was part of the Government that got us into this position. Alternatively, George Osborne has created this mess (or made it worst) and that Ed Balls and Labour are speaking the truth and will solve the current problems.

Well the answer could possibly be Yes/No, No/Yes or as most people we have spoken to, have said, both are wrong! Why? Well simple, they both are so far away and ill advised that they do not know what is happening and here is why:-

  • The majority of the UK business market is the Micro/SME/SMB business market
  • These businesses above, in the high majority  are employing below 10 people
  • Both George Osborne and Ed Balls know nothing of this arena as they have never had to work or run a business in this market arena
  • The same can be said for all other MP’s and officials who work around them
  • Their advisors are big corporations and membership groups who whilst they say they know what is going on this sector, they are paid wages and don’t have the knowledge of experiencing the issues and worries of this sector
  • The people that make these decisions are being taken by people that are high earners and work for companies or organisations who both don’t pay the taxes or have to worry about paying taxes like this arena has too
  • Whilst we are not saying they are avoiding paying tax, the perception is that they are – using accountants to reduce their tax bills and helping companies to mitigate their tax payments

So, what is the solution? Most self-employed people and the business owners of this sector want fair taxes right across the board and that every person and company should pay all taxes and not be able use loopholes to take advantage of a very complicated situation, thus creating a level playing field.

The easiest way is a straight forward taxation situation but we all know why this will never happen – the financial companies will lose so much revenue as they are paid to advise Government, the Political Parties and provide ways and services to help major businesses to reduce their tax payments and to wealthy individuals too. Furthermore, the Inland Revenue and HM Customs together with accountants will see virtually all work disappear and thus their positions become redundant.

Yet, wouldn’t this be the best way ahead as it would put everyone on complete level playing field by saying:-

  • Personal
  • Introduce proper tax bands and that everyone pays tax at the tax percentages set
  • Payment of tax is based on all income whether wages, shares or payments into your pension fund
  • No way that taxes are avoided because if you get wages, pension contributions and shares all worth say £100,000 per year together, then tax is paid on every part not just the wages element which may be worth say £60,000 only – thus meaning they are getting benefits tax free!
  • Business
  • If who have business premises you are liable for rates, whilst home based or mobile based businesses are virtually exempt. Introducing a method, where every business pays rates based on the income to your business. So, say for example X pence in each pound is paid by every business as a business rate tax. That way every business pays rates and no business can find a way to avoid it. This is controversial as there are two sides to this, as businesses in premises feel that they pay when people running businesses from home don’t have to pay rates. Thus, by getting every business to pay, it means all are paying and for example,  it could be say 1 or 2 pence in the pound and that way, no business in the UK can avoid paying rates
  • The same could be said with tax and VAT, thus every business can’t avoid tax. Companies say they are based overseas so they don’t have to tax but if they are selling any service or product in the UK, they every sale has to pay tax on this. As another example, say 4 to 5 pence in the pound in tax and then the say 7 to 8 pence in the pound for VAT, there would be no avoidance
  • In summary, 1 plus 4 plus 7 means that using this example, 12 pence in every pound is paid in taxes and VAT.

This would mean that all businesses would be on the same level playing field and people would see that everyone is paying the same and companies aren’t avoiding tax. It could be seen that this is wrong or couldn’t work, yet to the ordinary man in the street wants to see a level position not evasion or avoidance!

Someone working in a shop, factory, office whose earnings are low yet have to pay tax feel that they are seeing people earning huge salaries pay less tax. Now you think they are wrong by saying this, but for them, it is simple as they seem to these people using accountants to avoid and evade paying tax. If, as they see it, you take this as a percentage of taxes paid as pence in the pound they feel they are paying a lot more than higher earners.

In summary, the people at the top making the decisions are wrong as they are out of touch and don’t know what is happening, whilst the people at the bottom running the businesses that keep the country working are right with their views…..

Who is right?

The choice is your’s…….

 

Note:-

This blog post is based on many conversations that have taken place over the last few years at various meetings and networking event’s but all seem to come back to the point that businesses at the top, Government and their advisors do not know or understand what is happening on the ground to the person in the street and the Micro/SME/SMB market sectors

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