If you could start from scratch, what philosophical principles would you want to underpin our taxation system?

So many complex taxes now. Years ago, you had a tax allowance when you were married. Then another tax allowance when you had children. If you hadn't paid any NI 'stamps', you weren't eligable for some benefits, but you had healthcare, dentist, medicine and glasses free. Then you had Child Benefit for the first two children paid to the wife/mother. Now, those are gone/changed and you pay your taxes and then get some back with Credits. Half the time, they get these wrong and you end up having to pay back overpayments that aren't even your fault. I won't even start about the unfairness of Council Tax and Business Rates. VAT at 20% on all sorts of essential things, not just luxuries. Who remembers the different rates of Purchase tax?

It is time to have a really simple approach - something that doesn't take armies of tax officials to administer and is difficult for people to avoid paying. Tax rates that are not so high that higher earners look for ways to avoid paying and a starting rate so that lower earners don't lose the will to work. Just explaining to my grandchildren how much money they will end up with when they start work after college/uni was a real eye opener.

Now, as a working pensioner, I ask my accountant to sort out my personal taxation and pay for the priviledge so I don't spend hours filling in the dreaded tax return.

Keep it simple is my suggestion for a better taxation model.

That's what Labour are suggesting, Flickety. I think they took the idea from Richard Murphy of www.taxresearch.org.uk

I am no defender of Non Dom status. I suggested in a post further back that it be granted for only 5 years. This would mean only those passing through on a career path would get it.

Well Dj is right in so far as their assets are sheltered from UK tax in places where they pay little or no tax. I find it hard to accept that because we get some money from them, we should therefore just accept the situation. Going back to basic principles, as in the op, that is a pragmatic not princiipled approach. We are one of the few or maybe only countries in the world that offer this. At the very least we should abolish the hereditary aspect

durhamjen You are beginning to confuse me. Non Doms use their status to protect their offshore UK assets from UK tax. They pay tax on the offshore asset in another low tax country.

How can they at the same time be using our laws to shelter their off shore assets from tax. They pay tax either in the UK or elsewhere. But as the article I linked to showed, the total amount of tax they pay in the UK is substantial.

I find it outrageous that an MP should be a Non Dom, although I understand Zac Goldsmith has now given up this status, but he is one of a very small minority in his situation. Most Non Doms are foreign born and came here for business reasons. Many of those on the rich list and, indeed many wealthy foreigners with homes here are not actually domiciled in this country. They move around constantly and I do not think are liable either for taxation, or to receive benefits.

If they are non dom, that is to do with someone else's country?

I think I am happy to take their money to help our own finances!

"While homegrown fortunes are faring well, the Rich List remains dominated by entrepreneurs from outside the UK – just five of the top 20 fortunes are in the hands of British-born individuals. Attracted by ever increasing property prices and the non-dom laws which allow UK residents with foreign passports to shelter their offshore assets from tax, the world’s super-rich are still flocking to London. Of the 117 billionaires who feature in the list, only 62 are British, and the Queen herself has now dropped out of the richest 300 for the first time."

Non-doms use our laws to shelter their offshore assets from tax.

"The richest 1,000 families have more money than the poorest 40% of British households combined, according to the Equality Trust. Last year they saw their wealth increase by £28bn, the equivalent of £77m a day.

The annual increase is enough to foot the nation’s council tax bills for a year, provide nearly 2m living-wage jobs for a year or 1m jobs paid at the average full-time wage of £27,195, said the trust."

Or to fill the NHS gap.

It would be intersting to see how many of the 300 are non-doms.

I imagine all the other parties would take money from non-doms if they were offered it. However, when Labour stops it, it will be interesting to see how many of these donors leave the UK.
Ashcroft might. Lord Noon gave up non-dom when he was made a lord, as did Ashcroft. Some of them say they are keeping non-dom status for tax purposes, so it must save them some money.

What's it got to do with the OP though?

It was on the news, though, so some people think it's newsworthy.

Isn't it funny all 3 main parties are happy to take donations from Non Dom donors.

I don't see why that's newsworthy. The Queen's position isn't dependent upon how much money she's worth.

Just heard that there are 300 people in this country who are richer than the Queen.

You are right white wave- Zac Goldsmith was one until he stood for Parliament

I understood that they can be British and claim don-dom status through their parent - but only the male!!!

A British citizen living in Britain must pay tax on all income earned in the UK and abroad. A non dom living in Britain - maybe having done so for most of his/her life - is only obliged to pay tax on income earned in the UK. How can it possibly be justified that out of two people who have lived in this country all their lives and had the benefit of a relatively stable society with reasonably good infrastructure, only one (the non dom) benefits from a preferential tax regime

Because the non dom is not a British citizen? Apples and pears? The two are just not the same.

www.taxresearch.org.uk/Blog/2015/04/08/labours-non-dom-press-release/

Sorry, thousands, not millions.

www.theguardian.com/politics/2015/apr/08/non-dom-donors-who-has-given-money-to-which-parties

Zac Goldsmith was a non-dom for years despite being born in London. Before he became a Tory MP he gave millions to the Tory party.

I think the proportion of those with Non Dom status that were actually born in the UK is very, very small. The majority are foreign nationals who have come to this country as adults and who come to take high salary posts. Some may stay for the rest of their lives, but most eventually move to work elsewhere or return to their home countries.

The idea that thousands of non-doms were born here and have lived here all their lives, makes good publicity and attracts interest in the same way that the story of the unemployed man with 40 something children collected it. But no-one in their right mind would suggest that he was typical of all benefit recipients.

I am not defending non dom status but I think we should base any change of policy on the circumstances of the majority and not get too worked up over the particular circumstances of a small handful.

POGS You suggest that "media interviewers" do not have the knowledge or intelligence to ask the right questions regarding non dom status. My feeling is that "the right questions" have been asked and have revealed that:

A British citizen living in Britain must pay tax on all income earned in the UK and abroad. A non dom living in Britain - maybe having done so for most of his/her life - is only obliged to pay tax on income earned in the UK. How can it possibly be justified that out of two people who have lived in this country all their lives and had the benefit of a relatively stable society with reasonably good infrastructure, only one (the non dom) benefits from a preferential tax regime?

On the proposal of abolition of non-dom status for anyone who chooses to reside in the UK after a 5 year period has elapsed, the Economist says:

"Some non-doms would doubtless leave, but probably only a small number—London has many attractions other than low taxes—and it’s not clear that non-doms generate much investment anyway (other than in high-end residential property). As Richard Murphy, a tax expert, points out, they may feel there is nowhere else to go, as no other rich country has a non-dom scheme."

And POGS if non-dom status is not a way of avoiding tax, why else would a person who was born and educated here and who lives here permanently (but because of some archaic rule is able to opt for non-dom status because his/her father was born abroad) decide to retain such status?

Good posts Flickety B.

The Non Dom status is believed by some to be a way of avoiding paying tax. Thank the politics of 'spin' for that and so few media interviewers knowing their remit or having the intelligence to ask the right questions and give people informed understanding of matters.

I agree too with your 5 year policy and the fact that far from being tax avoiders they actually contribute to the tax intake of the country. The Grosvenor of the Bank of England would be a good case to think of.

Socialism seems to be equated with communism in some posts. The socialist gov at the end of the 2nd WW made massive changes in all areas to give all British people as equal opportunities as possible. I would like to see that kind of government return. I understood Orwell to be attacking capitalists. My philosophical approach would be equal opportunities for all.Good forum GT !