US & UK are poor societies with some very rich people.

Katie59

Germanshepherdsmum

Don’t know where you get 5% from Katie. Corporation tax is 19%.

No, the proportion of tax source, Income Tax is 25% Company tax is only 5%
There is a nice pie chart but it won’t upload
Google “Tax revenue source”

I think those figures are a little out of date. Income tax is around 25% but Corporation Tax is somewhere around 6.5%.

commonslibrary.parliament.uk/research-briefings/cbp-8513/

It’s just you hear about companies paying too much tax - but they don’t pay much at all.

Corporation tax needs to be as low as possible in order to attract business here.

Katie59

It’s just you hear about companies paying too much tax - but they don’t pay much at all.

As well as 19% corporation tax, VAT at 20%, Employer NI contributions for each employee on PAYE who pays NI along with business rates.

I think you are mistaken if you think SME’s do not pay much at all

Germanshepherdsmum

Corporation tax needs to be as low as possible in order to attract business here.

Agreed.

If corporate tax is too high, I believe the prices of the widgets go up (if they make widgets). Then everyone who is widget maker source out of the UK or raise prices on widgets and lose business.

Same idea for banking. If I understand correctly UK is second in banking worldwide. To pay the smartest best talent - wages and bonus are high and banking relies on a certain corporate tax rate. Otherwise banking moves elsewhere.

I'm ready to be wrong

Yup. All about having a competitive edge.

Putting figures on the tax collected
Income tax £226 billion
Company tax £66 billion

They are avoiding tax on a massive scale

Katie59

Putting figures on the tax collected
Income tax £226 billion
Company tax £66 billion

They are avoiding tax on a massive scale

By Company Tax do you mean Corporation Tax ?

If so that is not the only tax companies pay.

Which is why most successful countries in Europe have higher corporation taxes than us tradingeconomics.com/country-list/corporate-tax-rate?continent=europe

Low corporation tax levels seem more associated with less thriving economies.

M0nica

Which is why most successful countries in Europe have higher corporation taxes than us tradingeconomics.com/country-list/corporate-tax-rate?continent=europe

Low corporation tax levels seem more associated with less thriving economies.

You have your answer in your question.

GrannyGravy13

Katie59

It’s just you hear about companies paying too much tax - but they don’t pay much at all.

As well as 19% corporation tax, VAT at 20%, Employer NI contributions for each employee on PAYE who pays NI along with business rates.

I think you are mistaken if you think SME’s do not pay ^much at all^

A VAT registered business is merely collecting VAT on behalf of the govt. It is not actually their money. The output tax is a tax charged to the customer which is then paid over to HMRC, subject to a deduction for any input tax paid by the business. I'm sure that you know this.

Dinahmo

GrannyGravy13

Katie59

It’s just you hear about companies paying too much tax - but they don’t pay much at all.

As well as 19% corporation tax, VAT at 20%, Employer NI contributions for each employee on PAYE who pays NI along with business rates.

I think you are mistaken if you think SME’s do not pay ^much at all^

A VAT registered business is merely collecting VAT on behalf of the govt. It is not actually their money. The output tax is a tax charged to the customer which is then paid over to HMRC, subject to a deduction for any input tax paid by the business. I'm sure that you know this.

Yes Dinahmo

Yes the supplier of goods or services are acting as a tax collector , the money collected never belongs to that company, but of course they can offset some of the payment by vat incurred on their purchases associated with those supplies.

My point being that it is not a cost of the company and doesn't affect its profits. GG's post implies that it does and is therefore misleading.

Dinahmo

My point being that it is not a cost of the company and doesn't affect its profits. GG's post implies that it does and is therefore misleading.

My post pointed out all taxes paid by companies, I didn’t mention profit at all.

I know that you didn't mention profits. I'm just trying to point out in simple language that VAT is not a cost of the company.
by including VAT payments in your answer is misleading.
WM's answer is more comprehensive than mine and maybe more understandable.

^ There is a poster who has stated that income tax is not used for government spending. I don't understand this statement and would be most grateful for an explanation.^

That's me, Rosina.

There is one fact you have to take on board to start to find an answer to this question and that is that all our money is issued by the state. The article growstuff linked to tells you more about money, the UK's money, and how it is issued into the economy. The state is the only entity that can create UK £s sterling. There is no theoretical limit (though there are practical limits) on how much it can create. Anyone else who tried to create out money would be sent to prison for forgery.

You cannot buy anything in the UK with any other country's currency. If you bring back foreign currency from a holiday abroad you have to change it back into sterling before you can use it in the UK.

This leads to a very simple question. If the state is the sole creator'and issuer of our currency why does it need to get some back from us in order to pay for anything?

Perhaps people might like to think about that.

Hello all. New to Gransnet site and posting.

I am British and moved back to the UK a few months ago from Europe. I had been away for 15 yrs, with intermittent visits back to see family and friends, which is very different from living in a place. Since moving back, I have been shocked by how ‘poor’ the UK seems to have become in its daily standard of living compared with life in Europe. The gap there between rich/poor felt much smaller, headline tax levels were higher but in return we all felt bought into the fabulous levels of public services and general attractiveness of everything, low uni fees for students to train up our next generation of doctors, engineers and so on. Everything here in the UK just looks and feels on its last legs, uncared for, and shabby to be frank. I can only comment having experienced both places. One situation encapsulates it for me and that’s the terrible situation in the UK regards finding a dentist (basically DH and I cannot). In Europe, we paid roughly EUR 100 every year for family of four (medical insurance) and for that went to any doctor or dentist we wanted, providing levels of service that would be considered private standard here, we paid eg EUR20 for a doctor appointment and were then reimbursed 80% of the costs. I found it a great system and received wonderful medical care. Here, I cannot even find a dentist accepting new patients!! In Europe we could pick and choose whoever we wanted and in fact had one 100m from where we lived.

I’m shocked at the poor quality of life here and angered by how it’s got like this. I feel the British people should demand better. I feel the UK is a nice place if you are v moneyed but hard if not, whereas in Europe it feels better for more people. Don’t get me wrong there are some wonderful aspects to the UK and we moved back for some positive reasons that we are glad of. But having been fortunate to travel and live overseas extensively, I now believe there are countries out there that have overtaken Britain in the quality of life stakes and it is slipping behind. We advise our DC to get out and see the world and share our views on what’s better/worse about different countries and systems. I don’t see the next few years being easy for Britain and I think past policy decisions are going to come
back with a bite.

I fully recognise the points made in the FT article the OP linked to regarding how UK and US societies seem poor overall but with some v rich people in. From my experience it feels better living in more equal societies.

A VAT registered business is merely collecting VAT on behalf of the govt. It is not actually their money. The output tax is a tax charged to the customer which is then paid over to HMRC, subject to a deduction for any input tax paid by the business.

Best explanation. The businesses do the work of collection.

I’m not trying to run the UK down but we are not good.
NoblesseOblige May have been living in one of the Scandinavian countries that are certainly better, however we travelled through France, Germany, Austria and Poland last year, UK does not compare well we are falling behind

Tax, GrannyGravy

I'm glad we live in a country with a rich tradition of charity: however there is no bout that the rich are getting richer, and the poor, poorer, and that at least apparently, "levelling up" has been quietly dropped for "trickling down" (which I believe has been proven not to work, shall be pleasantly surprised it it does.

So for me its not an either/or charity or proper distribution of income and meeting basic needs. The bits can sit aside one another.

but I'll give you a clear and real local example of the charity/meeting needs bit.

there was a truly lovely big charity venture for anyone who felt or was marginalised or simply lonely. A drop in cafe long opening hours and cheap. Free groups of various activities run. 9 workers paid, many unpaid volunteers, inner city striation.

The have had to turn themselves into an extended food and advice space. They have lost 7 workers. there can be no groups, as its a food bank, and tho the cafe is open, its by referral only, and it now has a CAB also referral only. Its not for the lonely/isolated/marginalised/ a happy place anymore, its plugging the gaps in social services.

Can you say why this has happened?

I'd say that the majority of people have a decent living standard in UK. Some are hard up, some are on the bones of their ar**s.others are very comfortable and a few stinking rich. In UK it appears to be a case of what you choose to do with your resources for the majority.lots live a lifestyle way beyond their means and have a dillusional insistence that they 'deserve' to 'have it all' even if they haven't worked hard for 'it' . A great many work so hard just to tread water,but we have shops full of food, free at source medical care and a social fund available (albeit a confusing one to access!) Should the worst happen.anyone who's lived in a country where there's no healthcare for the less well off/shops almost devoid of any decent food/housing akin to post-blitz conditions with no access to materials to address repairs, will think that the term 'poor' is redundant in UK.its all relative. I've been in real dire straits where we very nearly lost our home and all else too in the80s when everyone else was singing "loadsamoney" yet now we have a comfortable retirement not rich, not poor by any means, but we choose carefully what we 'blow' our funds on and it ain't foreign holidays, meals out, designer gear, £1000 phones or chuck away outfits from Primuck!! There will always be those needing social and state help and we must ALWAYS provide that at all costs, but to say we're generally poor is utter bilge.

Katie59

I’m not trying to run the UK down but we are not good.
NoblesseOblige May have been living in one of the Scandinavian countries that are certainly better, however we travelled through France, Germany, Austria and Poland last year, UK does not compare well we are falling behind

How are we "falling behind"? What areas are you travelling through in UK to decide so?

Gabrielle56 I agree with your post 09.05.10