6 One tax - can it work?

Well, we have a system in place that could be adapted and scrap everything else. National Insurance is already used to claim a fixed percentage from both businesses and individuals. Since I consider the health of the nation to be part of the responsibilities of society as a whole I don’t see why it has to be a separate claim on our pockets. The money goes into one big pot and is paid out on a need-to-be-done basis.

We all have individual National Insurance numbers. Use a P (Personal) prefix for an individual and an N (Non-personal) prefix for business, charities etc and X for everything else, eg foreign residents earning money in the UK. Banks and building society interest, stocks and shares sales – all can have tax taken before payout and passed to the government by the bank, building society, stockbroker etc; employment income, including basic salary and bonuses – tax can be taken and submitted to the Government by the employers; house sales – tax on the balance between original purchase price and sale price can be taken and submitted to the government by the solicitors. All accounts and transactions must have allocated ‘N.I.’ numbers and this number must be quoted by the payer to the Government for recording by the Tax Office.

Anyone submitting a tax return simply lists all income for the year and how much tax they’ve paid at source and submits payment for what has not already been paid. The figure already paid is compared to what is recorded under the ‘N.I.’ number and the new payment recorded. There’s no working out what tax band applies, no fiddling to bring the amount down to the lowest possible tax band – one percentage for everyone. Tax inspectors should find their work easier when investigating suspect returns and carrying out random checks.

The more tax is taken ‘at source’ the less chance for individuals to ‘fiddle’. One percentage means sources don’t need to know whether their employees pay a particular rate or are eligible for certain subsidies in order to calculate what they should pay; one percentage fits all, leaves no room for argument or misinterpretation and is easy to change annually when the ‘Budget’ is decided.

What percentage? I’ve no idea; one of those things better minds than mine would need to work out!

Oh, and in case anyone is wondering, no – if you make a loss instead of a profit you don’t get tax handed back. Tough!

I’d like to re-iterate here that income tax should be the only tax. If we need money to keep us going, we all contribute. Keep it separate from anything else so we always know where we stand.

If social engineering is required e.g. a company violates regulations and causes an environmental disaster, the company is prosecuted and not only has to pay to put the problem right but also has to pay a ‘social penalty’. Remedial work and penalties should both be paid from their profits i.e. after they have paid their income tax – which is a separate issue.

Policing and administration of prosecutions should be covered from the ‘N.I.’ pot as this comes under law-enforcement but the social penalty should be paid to a separate fund. That fund to be kept in case any firm does something so awful that it goes out of business without being able to pay for correcting the problem and does not have insurance to cover it.

As another example, if it was decided that a penalty on petrol use was needed as social engineering the money should also go the Penalty Pot. As petrol is so damaging, perhaps the pot could also be used to fund research into alternative fuel sources.