A Simple and Efficient Tax Regime For The United Kingdom 2013 by Ronald W. Shaheen

A Simple and Efficient Tax Regime for the United Kingdom
2013
A Simple and Efficient Tax Regime For the United Kingdom 2013
Ronald W. Shaheen uktax@livingportugalproperty.com +(351) 917591950
The opinion in this report represents the view of the author and not HMRC or any other organisation.
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CONTENTS
EXECUTIVE SUMMARY 1. INTRODUCTION 2. THE NEW REGIME 2.1 The Annual Business License 2.2 Tax on Turnover 2.3 Tax on Income for the Financial Services Industry 2.4 Income Tax Inheritance Tax Capital Gains Tax Corporation Tax Tax Allowances and Reliefs Council Tax Stamp Duty Land Tax VAT VAT Fraud Tax Evasion Tax Avoidance and Planning Black Economy Excise Duty Imports Duty and Taxes Exports Wealthy Individuals and Entrepreneurs Foreign Investment Tourism 2.5 National Insurance Contributions Health, Education, Life and Pensions Health (NHSPlus) Education (EDUCare) Life Pensioners Examples Public Debt Conclusion
(ABLE) (TOT) (TOI)
(HELP)
2.6 2.7 2.8 References
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EXECUTIVE SUMMARY
The aim of this proposed UK tax regime is to enable HMRC to collect a fair tax from every business operating in the UK including those who currently pay no tax at all, either though non-declaration of profit due to deceitful accounting or fraud, tax planning or through black economy activities. It will also satisfy the UKs aim to offer the most competitive and straightforward tax regime in the G20 and become the best place to start, finance and grow a business.1 The cost associated with administration, filing and submitting accounts will also be significantly reduced and in many instances will negate the need for a large percentage of UK businesses to use the services of accountants, tax advisors or book keepers. Under the proposed regime, all taxes will be collected on a monthly basis, rather than annually in arrears, which will reduce the interest costs on our public debt, and enable HMRC to identify potential problems, almost immediately. It will also remove the opportunity for individuals and companies, to defer their tax liabilities, which will allow HMRC to collect the billions in taxes that are currently owed.2 The proposed regime will also remove the unfair burden that currently falls upon those law abiding citizens and companies who pay an increased amount of taxes due to the deliberate evasion of others, by effectively and efficiently collecting taxes from all individuals who earn income in the UK and on all UK registered businesses. A large proportion of the proposed regime will be based on a Tax on Turnover / Point of Sale Tax, which will produce a simplified accounting and collection system, and enable HMRC to charge a fairer tax on the total turnover, which currently stands at 3,100 billion3 for the current 4.8 million private sector businesses4 in the UK, and on every individual who purchase goods or services either in or from the UK. The cost of goods and services in some instances will increase by a few percentage points, however in the majority of cases, prices will in fact fall. Net company profits will remain the same, with gross profit only reduced in line with the tax savings gained under the proposed regime. The proposed alteration to, and charges of our National Insurance Contributions will provide sufficient funds to eradicate poverty in the UK, offer one million plus new employment positions, lessen the current burden on our National Health Service by building new hospitals for persons of state pension age and over, provide the Government with additional funding to embark upon their programme for the renovation and construction of existing and new schools, construct and therefore offer new, affordable and sustainable homes for 6 million families and eradicate short term unemployment for the 60,000 students who graduate each year.
1. HMRC: Making Tax Easier, Quicker and Simpler for Small Business, March 2012 Page Foreword 2. Missing Billions: Richard Murphy, Researched on behalf of the TUC, taxresearch.org.uk Page 22 and 26 th 3. 4. BIS: Population Estimates for the UK and Regions: 17 Oct 2012: Page Summary and Table 1
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INTRODUCTION
The proposed UK tax regime is based on the following four tax areas, which will replace Income Tax, Capital Gains Tax, Inheritance Tax, Corporation Tax, Value Added Tax and Employer National Insurance Contributions. The proposed regime will provide all UK businesses with a simplified form of accounting and the personal assistance of a newly appointed HMRC Tax Advisor. Under this proposed regime, the majority of SMEs will no longer require the services of an accountant. Where taxes or duties are not mentioned, they remain the same.
1. 2. 3. 4.
Annual Business License Tax on Turnover Tax on Income National Insurance Contributions
ABLE TOI TOT HELP (Health, Education, Life and Pensions)
ABLE: This annual business license is a registration of all UK business to file taxes under the simplified regime. This fee based license is annually renewable and will allow each business to consult with their own personal HMRC Tax Advisor, which will in many instances eradicate the need for small businesses to appoint the services of accountants or tax advisors. Under the proposed regime, compliance costs and tax returns with errors are expected to fall significantly. Tax on Turnover: This Tax on Turnover is a point of sale Tax which will replace the existing VAT and be charged at a standard rate across all goods and services. As the new tax will be charged on turnover and not on profit, Corporation Tax will also disappear. TOT is a non-deductable Sales Tax for both business and end-consumers on all transactions. TOT shall also be charged where nonrecoverable VAT is currently charged within the financial services sector. Tax on Income: Shall be the replacement tax for the Financial Services sector and will be a simplified flat rate tax charged on received income. National Insurance Contributions: The new NICs will be charged on ones total income, which includes savings and investment income, state and occupational pensions, and earnings-replacement benefits. UK residents and all others with income in the UK will be charged the proposed NICs, irrespective of age. The employer will no longer make employer contributions, but will continue to collect NICs on behalf of their employees. The modified NICs are charged on a rising scale on all income at a rate between 20 and 35 per cent.
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ANNUAL BUSINESS LICENSE
(ABLE)
The Government wishes to reduce the disproportionate costs of accounting and filing taxes for small businesses as well as removing the fear from 50 per cent of those who worry about making mistakes.5 The costs of tax collection in the UK are notoriously difficult to estimate, but drawing on recent research, are likely to be of the order of 15 20 billion. If we apply the percentage calculated by Sandford in 1986/87 for total administrative and compliance costs of 3.75 per cent, this would give a projected total (2011/12) of 17.79 billion costs, but given the increased complexity of the UK tax system since then we believe the final total is likely to be higher still.6 Taxes collected in the UK in 2011/2012 were Tax compliance and administration 2011/2012 (At 3.75 per cent) 474.26bn7 (billion) 17.79bn
The Proposed Annual Business License Fee Structure Employees Number of Businesses8 Annual Fee 0 1- 9 10 49 50 249 250 or more TOTAL 3,557,255 1,022,695 177,950 29,750 6,455 @ @ @ @ @ 600 1,200 2,400 4,800 9,600 = = = = = =
ABLE Contributions 2,134,353,000 1,227,234,000 4,270,880,000 0,142,800,000 0,061,968,000 7,837,235,000
Under the proposed regime each business will be given the following two options which will reduce their ABLE contribution as follows; 1. Annual ABLE upfront contributions will receive a 10 percent incentive discount 2. Filing taxes online (TOT and TOI) will receive a 10 per cent incentive discount
Therefore, if all businesses paid the annual fee upfront and filed their taxes online the total contributions to ABLE would be reduced to 6,269,788,000
5. HMRC: Making tax easier, quicker and simpler for small business: March 2012. Chapter 2.4 and 2.5 6.Taxation and Red Tape: The Cost to British Business of Complying with the UK Tax System: Francis Chittenden, Hilary Foster & Brian Sloan. Page Summary and 26. 7. http://www.hmrc.gov.uk/about/annual-report-accounts-1112.pdf Page 5 8. BIS: Business Population Estimates for the UK and Regions 2012 Table 1.
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ANNUAL BUSINESS LICENSE (ABLE)

There were an estimated 4.8 million UK businesses at the beginning of 20129 Of these 4.8 million businesses, 99.9 per cent were SMEs.10 A large proportion of UK businesses have difficulty in both understanding and filing their taxes with 70 per cent of SMEs using an agent to deal with some or all of their tax affairs.11
Under the proposed regime the majority of UK businesses will only need to make two simple calculations per month to identify their tax liability as follows;
For TOT, this simple formula will be:
Exclusive Price: Goods/Services + Profit x 1.15 Inclusive Price: Invoice Price 23/3
For TOI, this simple formula will be:
Exclusive Price: Income x 1.20 Inclusive Price: Income 1/6
TOT exclusive price TOT inclusive price TOI exclusive price TOI inclusive price
100 x 1.15 115 23 x 3 100 x 1.20 120 6
= = = =
115
with
15 paid to HMRC 15 paid to HMRC
120
with
20 paid to HMRC 20 paid to HMRC
As can be seen with the simple calculations above, it is not difficult to assume that the majority of businesses will no longer require the services of an accountant or tax advisor and if they do, one can suppose that the fees currently payable for these services will be significantly reduced.
9. 10. BIS: Business Population Estimates for the UK and Regions 2012 Page Summary 11. HMRC: Making tax easier, quicker and simpler for small business: March 2012 Chapter 2.5 and 4.1
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ANNUAL BUSINESS LICENSE (ABLE)

All of the estimated 4.8 million UK businesses will be required to register to file taxes under the proposed simplified accounting procedure. The registration will enable each business to consult with their personal HMRC Tax Advisor on a regular as need basis. Each UK business will be charged an annual fee based on the number of employees which may be paid annually or quarterly in advance or by monthly direct debit/transfer. Each business will be offered two financial incentives which will reduce the cost of ABLE by up to 20 per cent per year.
It is expected that Due to the simplified accounting procedure and with the assistance of the HMRC Tax Advisors, many businesses will no longer need the services of an accountant or tax consultant. ABLE will significantly reduce the estimated 17.79bn it currently costs UK businesses and HMRC to administer, account for and file their taxes. The total annual cost for the 120,000 HMRC Tax Advisors is estimated to be 4.8 billion. This represents 76 per cent of the fully discounted fees or 62 per cent of the non-discounted fees. ABLE will guarantee that each business is legally registered and has the opportunity of making a profit, either in or from the UK. ABLE will guarantee that 100 per cent of UK businesses will make some contribution towards the UKs annual budget.
Under the proposed regime;
The only mistake one can make when filing your taxes, is by not declaring the correct amount of turnover or income, which is nothing other than fraud.
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HMRC Tax Advisors

HMRC will employ 120,000 HMRC Tax Advisors who will each be responsible for providing tax advice and counseling to 48 businesses12 within their local area as defined by postcode. Companies with more than 50 employees shall have a higher allocation of the HMRC Tax Advisors time. HMRC Tax Advisors will offer face-to-face and telephone consultations and reply to online queries. HMRC Tax Advisors shall also be responsible for interviewing all 13 million13 UK residents that are considered to be living in poverty in order to eradicate this unacceptable position by providing or topping up their existing income with funds from the newly created 48 billion annual Life Grant which is funded from the proposed Social Fund.14 Within a short period of time, the HMRC Tax Advisors will be able to provide assistance to all UK tax payers.
Each HMRC TA will be employed under the following terms and conditions; 8 hours per day for 4 days per week (192 days per annum with 4 weeks paid holiday) at an annual salary of between 24,000 to 36,000 They shall Work from home, with HMRC providing a company car or mileage allowance, portable computer, telephone and internet/intranet connection up to a maximum annual expense of 10,000 It is anticipated, that a large proportion of these new HMRC vacancies will be filled by existing accountants, book keepers or tax consultants.
ABLE will enable HMRC and all UK businesses to work together rather than against each other. Accountants will no longer have to look for inventive ways to avoid or delay taxes, as all allowances and reliefs have been removed. Finally, all businesses and income earners in the UK will contribute a smaller but fairer tax that is paid by all, rather than only those compliant few, who up until now have carried an unfair tax burden.
12. 4.8 million UK Businesses 120,000 HMRC Tax Advisors = 48 per Businesses per Tax Advisor 13. The Institute for Fiscal Studies: Living Standards, Poverty and Inequality in the UK: 2012: Jonathan Cribb, Robert Joyce and David Phillips Page 4 14. The Life Grant information may be found on page 31 of this report
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TAX on TURNOVER (TOT)

In order to eradicate the present anomalies associated with the current UK tax regime and to maximize the effectiveness of both accounting for, and collection of, taxes, it is suggested that a radical solution be introduced that no longer relies on consumption, profit or manipulated accounting but on a simple formula of a Tax on Turnover, accounted for and collected by UK business. TOT will increase the size of the tax base and the amount of taxes collected by capturing many of those who currently fall outside of the system due to tax avoidance, evasion, or through Black Economy activities. The proposed Tax on Turnover provides a simplified accounting procedure, which will be difficult to manipulate, unless one decides not to declare real turnover or income, which will enable HMRC to focus on this one area of tax evasion, which is falsely declaring either turnover or income. The increased probability of detection together with a severe penalty will both act as a deterrent to tax evasion.15It is recommended that a large fine based on the amount of evaded taxes and a mandatory prison term will help further reduce this type of evasion. TOT will be charged at a standard rate of 15 per cent on all goods and services, whether purchased by a business or the end-consumer, including those which are imported to, or exported16 from, the UK. TOT will be calculated, with payment submitted at the end of each calendar month, either online or through the normal channels. This will lessen interest payments on public debt by delaying our borrowing and enable HMRC to address any issues earlier. Under the existing tax regime, tax return data indicates that a significant proportion of companies do not have a positive tax liability. Amongst the smallest companies, this proportion is around 60 per cent, medium 40 per cent, and largest companies 50 per cent.17 Under the new regime the proposed Tax on Turnover / Point of Sale Tax will enable HMRC to receive a fair contribution on all transactions from all UK businesses, rather than on only those who declare a profit.
15. The Theory of Tax Evasion: A Retrospective View: Agnar Sandmo, Norwegian School of Economics and Business Administration, December 2004, Discussion Paper 31/04 Page 9 16. Export companies will be given the opportunity of filing under TOT or TOI or both, Page 9, 11 and 19 of this report. 17. Said Business School, Oxford University Centre for Business Taxation: Corporation Tax in the United Kingdom, Michael P. Devereux and Simon Loretz Page 7.
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The simple calculation of the TOT will enable all businesses to immediately identify their tax liability, without the need to calculate complicated formula and reduce the cost of both accounting for and filing of taxes. For TOT, this simple formula will be: Exclusive Price: Cost of Goods/Services + Profit x 1.15 Inclusive Price: Invoice Price 23/3 Current UK businesses have an annual turnover of 3,100 billion18 (Excluding Financial Services), which would produce 465 billion in new tax revenues. By reducing, replacing or removing Capital Gains Tax, Corporation Tax, Income Tax, Inheritance Tax, Value Added Tax, Employers National Insurance contributions and the current expenditure required to file and submit accounts, the current price of goods and services in the majority of cases will remain the same or become less expensive, as will be shown in the examples on pages 37 to 39 within this report. Of course, the profits that each business makes will be entirely at their discretion, which will ultimately reflect in the final price to the buyer.
Additional ramifications under the proposed Tax on Turnover (Point of Sale Tax) Corporations may offer an easier point of tax collection. It may be easier to impose a tax on consumption using a tax on corporate cash flows rather than on personal consumption tax.19 A point of sale tax is easily identifiable, harder to manipulate, an effective place to tax from an administrative perspective and the most adequate place to tax any given income.20 A point of sale tax should not affect the location of investment or finance, and will nullify the incentive to transfer profits to a lower tax destination.21 For exports, countries of destination will still have substantive and enforcement jurisdiction22 to charge their consumption type VAT on top of the inclusive TOT, which is not a VAT but an inclusive trading tax, which is charged at all points of sale. For companies with intra-community trade, who wish to sell goods or services in the UK, or set up their business within the UK, this will alleviate the current problem of determining their liability to pay tax and in which member state23 as all companies will pay TOT or TOI on all goods and services sold within or from the UK.
18. BIS: Business Population Estimates for the UK and Regions 2012 Page Summary and Table 1 19. Taxing Corporate Income: Alan J. Auerbach, Michael P. Devereux, and Helen Simpson, Chapter 9 / 9.5 Optimal Properties of Corporation Taxes http://www.ifs.org.uk/mirrleesreview/dimensions/ch9.pdf 20. 21. 22. 23. Said Business School, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT vs. Direct Taxation: Rita de la Feria, Page 7, 8 and 16.
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For companies with intra-community trade, who wish to sell goods or services in the UK, or set up their business within the UK, this will also alleviate the problems of qualification when determining which rule applies to a specific supply of goods which considers location, taxable status of the recipient and supply conditions and supply of services which may have several rules dependent on the nature of the service24 as all companies operating in, or from the UK, will pay the same rate of TOT or TOI irrespective of the types of goods or services being sold. As all goods and services are charged at the same rate, the difficulty in determining the nature of the service and therefore the tax payment for composite and bundled services or for leasing, advertising, repair of services and forms of transport, 25 should no longer exist. The same should apply to intermediary services, immovable property, cultural and similar services, and consultancy and similar services.26 It may also encourage foreign companies to conduct business in the UK, as presently a large number of traders refrain from export activities in another Member State because of VAT compliance and associated costs.27 In relation to its classification, as source, residence, destination, supply, or consumption;28 for exports it may be considered a source based tax, as goods and services will be taxed prior to leaving the UK, but in all other cases it may be considered as a residence, or consumption (Applicable to both business and end-consumer), type tax. It may also simply be referred to as a Point of Sale Tax, with all taxes collected within the UK. TOT will enable the government to receive tax income, where currently there is avoidance as clearly indicated in bunching at the two kink points of the tax rate schedule, 29and from all UK businesses who pay not tax at all. The cost of goods and services supplied by the estimated 2,651,000 unregistered businesses30 (Not registered for VAT and/or PAYE), if profit is maintained at the same level are less expensive under the proposed regime.31 Current zero or lower rated goods, such as food would be more expensive under the new regime, with the exact difference, again being dependent on profits of each business. Applying the tax to food is recommended so that all funds that are generated via the black economy by individuals who reside in the UK, who then purchase food or similarly rated goods are forced to contribute towards the public purse. Taxing food, like taxing everything else equally would also ensure that compliance was simple, as everybody would be taxed at the same rate irrespective of the type of goods or services offered.
24. 25. 26. 27. 28. Said Business School, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT vs. Direct Taxation: Rita de la Feria, Page 16, 17, 20, 28 29. Said Business School: Oxford University Centre for Business Taxation: Corporation Tax in the United Kingdom, Michael P. Devereux and Simon Loretz, Page 42 and 43. 30. BIS: Business Population Estimates for the UK and Regions 2012 Table 4 31. See Example on Page 36 within this report.
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TAX ON INCOME (TOI) for the FINANCIAL SERVICES SECTOR

Under the existing regime the financial services sector as a whole in 2011 had32 Taxes borne Taxes collected Total Tax Contribution (Irrecoverable VAT in this sector was) The Total Tax Contribution was equivalent in size to 18.9% of revenues in 2011 27.6bn 35.4bn 63.0bn 5.9bn
Under the proposed regime Tax on Income at a standard rate of 20 percent will replace the existing tax regime and the proposed Tax on Turnover at 15 per cent will be charged where the current irrecoverable VAT occurs. Total Financial Services income/revenue was (63bn 18.9 x 100 = 333.33bn) Under the proposed regime, the following taxes would be collected. TOI 333bn x 20% TOT (Replaces the irrecoverable VAT reduced from 5.9bn to) (5.9 x 6 = 35.4 5.9 = 29.5 x 1.15 = 33.925 29.5 = 4.425) Total Taxes collected under the new regime 66.67bn 4.43bn 333bn
71.1bn
The Total Tax Contribution under the proposed regime would be 21.35% of revenues, against the current 18.9% based on revenues in 2011
For Tax on Income, this simple formula will be:
Exclusive Price: Income x 1.20 Inclusive Price: Income 1/6
32. The Total Tax Contribution of UK Financial Services: Report for the City of London Corporation by PWC: December 2011 Page Executive Summary
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INCOME TAX
Given that a large percentage of the UK population avoid, do not qualify or simply are outside of the realms of paying income tax, as in the case of those involved in the Black Economy or through evasion and avoidance schemes; a simpler and fairer way to avoid this scenario is to charge a tax (TOT), at point of sale, on all goods and services. Under the proposed regime, no one will be liable to pay income tax, but everyone who purchases goods and services within or from the UK, will make their contribution via this proposed tax which will apply to all businesses and consumers alike. Individuals will no longer be liable to pay Income Tax, but all income will be charged under the new National Insurance Contributions rising scale on income as described on page 22 of this report.
INHERITANCE TAX
Under the proposed regime, inheritance tax will no longer be an additional tax on inherited wealth. Instead, inheritance will be charged under the new National Insurance Contributions rising scale on income. The Inheritance Tax Allowance will no longer be available. In practice, this would mean that the value of the inheritance, in the month of receipt, would be added to the beneficiarys income and would be liable to pay NICs on the received amount, in accordance with their income and applicable rate.
CAPITAL GAINS TAX

Under the proposed regime, Capital Gains Tax will no longer be an additional tax on gains. Instead, gains will be charged under the new National Insurance Contributions rising scale on income. Also, the Capital Gains Annual Allowance will no longer be available. In practice, this would mean that the value of any gain, in the month of receipt, would be added to the beneficiarys income and would be liable to pay NICs on the amount gained, in accordance with their income and applicable rate. A worthy note is that 28 per cent of all gains are made by those with insufficient income to pay income tax, or who only pay tax at 10 per cent, (Which was the income bracket of table income to 2,020 in the year in question).33 As the new rate under the proposed regime varies between 20 and 35 per cent on income and without annual exemptions, charges under the new regime may be more or less expensive depending up on income levels. What is encouraging is that every individual with a gain will make a tax contribution, which is not currently the case.
33. Missing Billions: Richard Murphy. Researched on behalf of the TUC, taxresearch.org.uk Page 21
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CORPORATION TAX
The current rate for Corporation Tax varies between 20 per cent and 24 per cent of profits, with the latter percentage being reduced to 23 per cent in 2013. Under the proposed regime, Corporation Tax will no longer exist. Therefore, companies will no longer be able to carry back, carry forward or surrender their losses.
TAX ALLOWANCES AND RELIEFS34

Under the proposed regime, none of the existing allowances will be available; Tax-free Personal Allowance Age allowances for National Insurance Contributions Allowances for Capital Gains Tax Inheritance Tax lower limits Corporation Tax-free Blind Person's Allowance Married Couple's Allowance (includes civil partnerships) Maintenance Payments relief Employees and directors expenses Self-employed expenses Company or public service pension schemes Personal pensions Gift Aid Payroll Giving Giving assets to charity
34. http://www.hmrc.gov.uk/incometax/intro-tax-allow.htm
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COUNCIL TAX
Under the proposed regime, no alterations will be made to the current Council Tax structure.
STAMP DUTY LAND TAX (SDLT)

Property Sales 201135 698,200 689,771 6,911 1,518 property sales in 2011 property sales below 1,000,000 property sales with a value of 1 million plus property sales with a value of 2 million plus
Under the proposed regime it is recommended that a freeze on SDLT for all properties under 999,999 is introduced for a period of five years. This would mean that 689,000 properties would be exempt from SDLT, which under normal circumstances would help to stimulate the current property market.
Under the proposed regime, the taxes collected would be as follows; Sales numbers from 2011/12 Up to 999,999 1,000,000 + 2,000,000 + 698,200 total sales 689,771 sales nothing payable up to 999,999 6,911 @ 5% 1,518 @ 7% = = 345.55 million 212.52 million
The government would continue to subsidise the Local Authorities.
35. http://www.dailymail.co.uk/news/article-2136005/Record-numbers-multimillion-pound-homes-sold-despite-slumprest-housing-market.html
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VAT
Under the proposed regime, VAT will no longer be charged on any goods or services. Instead, the standard TOT rate of 15 per cent shall be charged on all goods and services at point of sale. Neither TOT nor TOI are input/output taxes and therefore the complicated formulas which are currently used to calculate VAT payments or receipts, shall no longer be necessary. Given that many businesses refrain from conducting business in another country because of the complications of VAT compliance, by removing VAT in the UK, this complication will no longer exist, which therefore should encourage more businesses to set up in the UK. The financial services sector and similar will be charged under the proposed Tax on Income with their current non-reclaimable VAT charges now charged under TOT at 15 per cent.
VAT FRAUD
The following types of VAT Fraud may be eliminated under the proposed regime Under the proposed regime, acquisition, carousel and contra trading fraud36 of VAT will be eliminated. 1. The first fraud arises with the acquirer, whereby they simply disappear and do not pay their output VAT to the government 2. The second fraud arises when the exporter/broker who has paid VAT on the goods or services, then claims this back from the government when exporting. Under the proposed regime the following will occur. 1. Like with current purchases from outside of the EU, the new TOT is charged on all goods and services on entry in to the UK, prior to being received by the buyer. If these goods or services are then sold at a higher price, the difference or the increased TOT is paid at point of sale. 2. As there is no input or output calculation to the new TOT, the second problem is resolved, as no taxes are ever reclaimed. All imported goods are treated the same whether their source is the EU or not, the acquirer pays the TOT prior to receiving goods and when goods are sold at a higher price, the seller makes one calculation and pays the additional tax on the gain. As for export, as the TOT is not a VAT under the current definition, and as the cost of goods already bears its tax, the country of destination/consumption may still charge their consumption type VAT. Where the export company decided to be destination/consumption may still charge their VAT.
36. http://www.hmrc.gov.uk/manuals/vatfmanual/vatf23300.htm
charged
under
TOI,
the
country
of
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TAX EVASION
The only way to avoid the Tax on Turnover or Tax on Income is by non-declaration. This outright fraud should be penalised with severe penalties including a mandatory prison term and a sizable fine based on a percentage of the amount evaded.
TAX AVOIDANCE and PLANNING

As both Income Tax and Corporation Tax shall no longer exist, Individuals and companies will no longer have the ability to plan for or avoid these taxes and therefore the estimated 25 billion that was lost to tax avoidance in 200737 will no longer occur.
THE BLACK ECONOMY

Although actual figures are hard to come by, efforts to escape tax, whether by those not declaring income, or businesses exploiting tax loopholes, are contributing to a black economy that is estimated to be worth 160bn a year.38 Under the proposed regime, all income generated from the Black Economy that was then spent within the legal economy through the purchase of normal goods and services, would automatically contribute to the overall UK budget, via the Tax on Turnover, point of sale tax or TOI within the Financial Services sector. Under the proposed regime, it is also suggested that, for those who wish to make a contribution from illegal earnings, although we are not able to condone such activities, that a numbered account may be requested from HMRC. The account, in principal would be similar to some of those offered within some areas of the banking industry, where the account would be a nameless, numbered, bearer type account. The contributing holder would be entitled to benefits like everyone else based on the number of years of contributions. A real name can be added once, at any time in the future. It may also be suggested that in order to reduce the size of the Black Economy, that a referendum on legalising drugs is undertaken by the UK population. If passed in favour of legalisation, then an excise duty, like on alcohol or tobacco, plus the Tax on Turnover, at point of sale be introduced.
37. Missing Billions: Richard Murphy, Researched on behalf of the TUC, taxresearch.org.uk Page 3 Executive Summary. 38. http://www.independent.co.uk/news/uk/politics/war-waged-on-europes-2trn-black-economy-7944461.html
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EXCISE DUTY
Under the existing regime the amount of customs duty that is applied to goods varies substantially according to what those goods are and their value. HMRC has approximately 14,000 different classifications for goods subject to customs duty, with average charges of between 5% and 9% typically placed on the value of goods, but with the range of duty spanning between 0% and 85%.39 Under the proposed regime, excise duty charges including the following shall remain the same. Alcohol duties, UK Duty Stamps, Ingredients Relief, Air Passenger Duty, duties applying to gambling and betting activities, duties payable on oils (including road fuels), and Duties on Tobacco.
IMPORTS
Import tax is generally applied on top of standard VAT charges when goods are bought from non-EU countries and 'EU Special Territories'.40 Import VAT has to be paid by the recipient of the goods before they are supplied although the charges will not apply to goods bought online if the value of goods being delivered is below a certain level.41 Under the proposed regime, import duty will continue to be charged without any change made to the current tariffs. TOT will be charged on all goods entering the UK, which will replace the current VAT, with payment made prior to their receipt.
39. http://www.hmrc.gov.uk/customs/tax-and-duty.htm 40. http://www.out-law.com/en/articles/2011/november/buyers-must-factor-in-import-prices-on-online-sales-warnshmrc/ 41. http://www.out-law.com/en/articles/2011/november/buyers-must-factor-in-import-prices-on-online-sales-warnshmrc/
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DUTY AND TAXES

Importing or exporting a personal vehicle42 Under the proposed regime when you import a motor vehicle into the UK you will pay TOT on the value of the vehicle. This will reduce the cost of importing vehicles which are currently charged at the current standard VAT rate of 20 per cent down to the proposed TOT rate of 15%. When you export a motor vehicle from the UK, you cannot claim any relief. VAT refunds for visitors to the UK43 Under the new regime, as no VAT is charged on purchases, and irrespective of your domicile, you will not be able to claim any relief or VAT refund. The Retail Export Scheme shall no longer be available. Tax and duty on goods brought to the UK from the European Union 44 When arriving into the UK from an EU country you can bring in an unlimited amount of most goods for your own use without paying tax or duty, but certain rules apply. Under the proposed regime, no changes will be made to the current rules. Tax and duty on goods brought to the UK from outside the European Union 45 When arriving into the UK from outside the European Union (EU), you can bring in a certain amount of duty/tax free goods for your own use, known as an 'allowance'. Under the proposed regime, no alterations will be made to the current rules, with the exception of, that instead of paying VAT, you will now be charged TOT. This will reduce the cost of your goods which are currently charged at the current standard VAT rate of 20 per cent down to the proposed TOT rate of 15%.
42. http://www.hmrc.gov.uk/vat/sectors/consumers/personal-vehicles.htm 43. http://www.hmrc.gov.uk/vat/sectors/consumers/overseas-visitors.htm 44. http://www.hmrc.gov.uk/customs/arriving/arrivingeu.htm 45. http://www.hmrc.gov.uk/customs/arriving/arrivingnoneu.htm
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EXPORTS
Under the proposed regime export companies would be given the option of being charged under TOT or TOI or both. This would enable each company to decide which method would be more beneficial, in keeping our export markets competitive. Given that TOT and TOI are replacement taxes, again, the final price of exported goods or services would be entirely dependent on the profits sought by each company. Brokers and Agents would be charged under TOI.
WEALTHY INDIVIDUALS and ENTREPRENEURS

George Osborne, the Chancellor, announced in the Budget earlier this year (2012) that the 50p top rate will be reduced to 45p from next April. Since this announcement, the number of people declaring annual incomes of more than 1 million has risen to 10,000.46 Under the proposed regime and with Income Tax being abolished, the highest contribution one would make would be the 35 per cent of ones total income as part of the new NICs regime. This in turn, should have a positive effect of attracting those who are domiciled outside of the UK, and who are currently paying in excess of our proposed top rate of tax at 35 per cent. This assumption would be applicable to both wealthy individuals and entrepreneurs, either looking to operate from or reside within the UK.
FOREIGN INVESTMENT
The UK had an EATR of just over 26 per cent, and an EMTR of just under, 23 per cent, which ranked the UK 9th and 15th respectively, amongst the G20 countries.47 The measures of effective tax rates consider two different forms of investment decision. The first is a discrete choice, such as, a location. The measure of tax for this decision is the proportion of the present value of pre-tax profit, which is measured by an effective average rate tax (EATR).48 The second considers size of investment, conditional on location choice, where the marginal gain from an additional investment is equal to the cost of capital. The EMTR measures the proportionate increase in the cost of capital due to the tax.49 Under the proposed regime, more than 50 per cent50 of the estimated 4.8 million businesses who have no positive tax liability will now pay tax. As tax income does not double, the average payable rate will fall, which is expected to have a positive effect on both the EATR and EMTR.
46. http://www.telegraph.co.uk/news/politics/9707029/Two-thirds-of-millionaires-left-Britain-to-avoid-50p-tax-rate.html 47. 48. 49. Said Business School, Oxford University Centre for Business Taxation: CBTC Corporate Tax Ranking 2012 Katarzyna Bilicka and Michael P. Devereux. Page 6 and 8. 50. Said Business School, Oxford University Centre for Business Taxation: Corporation Tax in the United Kingdom, Michael P. Devereux and Simon Loretz Page 7.
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TOURISM51
The Travel & Tourism industry in the UK is nearly five times the size of automotive manufacturing and supports almost as many jobs as the financial sector with a total contribution to GDP in the UK of 101 billion in 2011, or 6.7% of total GDP. Travel & Tourism provides 2.3 million direct, indirect and induced sustained jobs in the UK, and directly supports nearly as many jobs as the financial service sector in the UK. Travel & Tourisms contribution to GDP will grow by 4.1% over the next ten years, a faster growth rate than the total economy. Visitor exports totaled 25 billion which was 13.2% of all service exports and 5.1% of all exports including goods and services. Every 640,000 of Travel & Tourism spending supports 18 jobs, compared to 13 jobs in the financial sector, 12 jobs in the communications sector and 11 jobs in automotive manufacturing. Air passenger duty and high rates of VAT on hotel stays are making tourism in the UK uncompetitive, and costing the economy jobs and GDP.
Under the proposed regime where VAT has been replaced by TOT at a reduced rate of 15 per cent, it is expected that an existing hotel room that is offered directly to the end user without any additional links in the chain, that the cost of accommodation will become less expensive. Where the accommodation is offered by a third party such as an agent or broker, their income will generally be charged under TOI, which as a replacement and not an additional tax, should also not have a negative effect on the cost of accommodation. VAT on Visitor exports will no longer be deductible, making items more expensive where deductions where previously used. As the average loss per visitor is relatively small, we do not expect this to have a significant impact on this type of export. It will however, further enhance the Governments purse substantially by keeping the VAT that is currently reclaimed. Recent visitor figures suggest that over 30 million people visited the UK between December 2011 and November 2012.
51. http://www.wttc.org/news-media/news-archive/2012/tourism-uk-contributes-more-gdp-automotive-manufacturing/ 52. http://www.visitbritain.org/Images/November%202012%20IPS%20Memo%20with%20charts_tcm29-35962.pdf
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NATIONAL INSURANCE CONTRIBUTIONS (NICs)

Current National Insurance benefits are funded by a system of compulsory contributions on earnings, paid by employees (12%), employers (13.8%) and the self-employed (9%).53 NICs raised 101.6 billion in 2011/12.54 Income Tax Rates and Taxable Bands 2012/1355 Personal allowance (Under 65 years of age) Starting rate for savings 10% Basic rate 20% Higher rate 40% Additional rate 50% From 6th April 2013 45% 8,105 0 - 2,710 0 - 34,370 34,371 - 150,000 150,000 Plus 150,000 Plus
Under the proposed regime, taxes collected from TOT and TOI will contribute towards the costs of the UKs National Budget, whilst all other contributions generated from the proposed NICs will be held in the proposed new Social Fund. This fund will contribute towards building more sustainable social services as outlined in the following sections under Health, Education, Life and Pensions, (HELP). The proposed NICs will replace the existing NICs and Income Tax and will be charged to UK residents and all others with income in the UK, on total income, including savings and investment income, state and occupational pensions, earnings-replacement benefits, inheritance and capital gains. Companies will continue to collect the NICs from their employees, but will no longer pay NICs for their employees. Those with additional income outside of employment and the self-employed will calculate and pay their contributions in the month of receiving income. Those currently earning over 29,500 who unfairly account for 72 per cent of all UK Income Tax receipts56 will be better off under the proposed regime, as will the 13 million UK residents who are considered to be living in poverty after housing costs, who will be entitled to receive a supplement to income from the proposed Annual Life Grant. See page 31 of this report. The proposed scale of National Insurance Contributions on total income 0 149,999 Total Income 150,000 999,999 Total Income 1,000,000 plus Total Income TOTAL CONTRIBUTIONS 937 billion57 @ 20% 83.7 billion57 @ 30% 18.4 billion57 @ 35% = = = 187.4bn 25.11bn 06.44bn 218.95 billion
53. House of Commons Library: NIC: An Introduction SN/BT/4517. Last updated: 6 February 2012 Author: Antony Seely 54. HMRC Annual Report and Accounts 2011-1, Page 5. 55. HMRC http://www.hmrc.gov.uk/rates/it.htm 56. http://news.efinancialcareers.com/15127/who-really-pays-all-the-income-tax-in-the-uk/ th 57. HMRC Income Tax Liabilities Statistics 2012-13 released 27 April 2012, Table 2.5 Page 27
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HEALTH, EDUCATION, LIFE and PENSIONS (HELP)

Annual receipts from the proposed NICs are expected to be in excess of 200 billion per annum, which over the next five years will have created a Social Fund of 1 trillion plus. Under the proposed regime, this fund will be made available to capitalise the following HELP projects, annual benefit payments and employment opportunities for a period of five years.
1. Life Grant
48 billion shall be put aside on an annual basis to offer additional benefits
for those who are currently considered to be living in poverty in the UK or are in need of financial assistance. 2. NHSPlus As part of the 66 newly created sustainable retirement communities, 66 new hospitals will be built, which will focus on hospital and community health care for those of State Pension Age or over. 3. Employment 856,000 permanent full-time and 400,000 part-time jobs shall be created. These employment positions will mainly be offered to the unemployed and those in receipt of benefits, graduate students, retirees and single parents. (These employment figures do not include the 120,000 HMRC Tax Advisor jobs created via ABLE). 4. Housing 3.36 million affordable and sustainable homes shall be built within 84 new 264,000 affordable and sustainable student apartments shall be built across Social Communities spanning every city within the UK.
5. EDUCare
the UK, 60,000 two year contract, graduate jobs, will be created and 10 billion per annum in additional education funding for five years will be provided for the Priority School Building Programme (PSBP). Health Care Clinics and sports facilities will also be built within the 84 new communities which will focus on education and prevention of illnesses. 6. Pensioners 2.64 million affordable and sustainable homes shall be built across the UK, creating 66 new Retirement Communities for those of State Pension Age and above. 200,000 of the 400,000 new part-time jobs will be offered to retirees and under the LIFE GRANT, all pensioners will be lifted out of poverty.
After this first five year period, the capital costs of these proposed projects will have been paid in full, which will leave an annual liability for salaries, benefits (Life Grant), and hospital running costs of 82 billion per year. At the beginning of year six, 120 billion plus, per annum will become available for other purposes.
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HELP will create the following employment and construct the following over a five year period. 60,000 Graduate Employment Positions (2 year contracts) Salary 24,000 per annum58
396,000
Health Care Workers (Long-term employment) Salary 24,000 per annum (These positions include hospital staff, hospital support staff and community care workers). Professional Builders (Long-term employment) Apprenticeships (Long-term employment) (Sustainable construction) Social Care Workers (Part-time employment) (Single parents and retirees) New jobs with total annual salaries of Salary 24,000 per annum Salary 18,000 per annum
100,000 300,000
400,000
Salary 12,000 per annum
1,256,000
26.79 billion59
All full-time employment positions will be based on 8 hours per day for 4 days per week. Capital Costs over a 5 year period 66 6,000,000 264,000 Schools 84 New hospitals at a total cost60 New homes at a total cost61 Student homes at a total cost62 (Annual grant of 10 billion) Health Care Facilities63 16.5 346 15.2 50 9.68 billion billion billion billion billion
58. Salaries on 120,000 jobs at the beginning of year two of 2.88 bn, has been used to calculate total annual salaries in . 59. Average salaries for full-time employment are 24,000 per annum and part-time 12,000 per annum. 60. Hospital construction costs have been over calculated at 250 million per hospital, which per bed ratio is 4.5 times more expensive than the Royal Derbyshire Hospital, which cost 334 million to construct and has 1159 beds. 61. The average home size is 48m2, http://www.channel4.com/4homes/build-renovate/self-build/planning/a-z-of-selfbuild-guides/ self-build-costs-how-much-does-it-cost-to-build-a-house-10-05-13. 62. Construction costs have been calculated at 1,200 per person to provide sufficient health care facilities. 63. Based on 96,000 residents at 1,200 per resident x 84 communities
59
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All of the proposed developments will be constructed in partnership with the Local Authorities who will, where necessary provide the land. Current Government policies and schemes on new housing include NewBuy Guarantee, Right to Buy, FirstBuy, New Homes Bonus and loan guarantees for developers.64 The proposed sustainable communities will be self-sufficient in energy production, waste and water management and provide free public transport within each community. It is also recommended that additional land is allocated to each new community in order that local and sustainable agriculture production is sufficient to cater for the needs of each community. This would have a positive effect of reducing both production and transportation costs, as well as offering products of increased quality with a drive towards organic cultivation, with additional health benefits for consumers. There will be 66 Retirement Communities each with their own hospital and community health care facilities as well as an additional 84 Social Communities, comprising of 6 million new homes in total. Each new community shall consist of 40,000 homes which will create 150 new towns, with these homes being offered to those in the UK, who are most in need. Each home will also be offered at an affordable rent inclusive of energy, water and waste management. The average home measuring 48m2 will be offered at a weekly rental price of 92.31 which will generate an annual income of 28.8bn per annum, which shall be returned and managed by the proposed Social Fund. Currently, there are 5.05 million persons claiming housing benefits at an average weekly amount of 89.42.65 Each of the 66 UK cities will host a Retirement Community and a Social Community, with eighteen of the larger cities hosting, two Social Communities or more.66 An average, pre-agreed Council Tax payment of 11.54 shall be charged on each new property per week, included in the rental amount above, with these funds going directly to each Local Authority. Currently there are 5.98 million persons claiming Council Tax benefits at an average weekly amount of 15.72.67
64. Dept for Communities and Local Government: Topic Housing, https://www.gov.uk/government/topics/housing 65. Dept for Work & Pensions, 14 Nov 2012, First Release, Housing Benefit / Council Tax Benefit ISSN 1462 9798, Page 4 66. Size and number of towns will vary depending on the needs of each city.
th
67. Dept for Work & Pensions, 14th Nov 2012, First Release, Housing Benefit / Council Tax Benefit ISSN 1462 9798, Page 5
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HEALTH
NHSPlus Housing and Health Care for those of SPA and over Two thirds of NHS clients are aged 65 and over and account for two fifths of the total expenditure. 68 Many of the leading causes of death among adults over the age of 65 are treatable or reversible with prevention and lifestyle changes.69 In 2008, 32% of people aged 65 and over who were admitted to hospital were found to be malnourished at the time of admission.70 The UK has around 150,000.71 hospital beds with a total staff in the 2nd quarter of 2012 of 1,032,431.72 which represents a staff to bed ratio of 6.88 to 1. The aim of NHSPlus is to construct 66, 250 bed hospitals as an integral part of the sustainable retirement communities as well as offer health care and special housing within each community. Actual construction costs and number of beds at The Royal Derbyshire Hospital.73 Construction costs 329 million Number of beds 1159 Annual Budget 422 million74 Construction costs of each new hospital Number of hospital beds Staff ratio to hospital beds (Includes Community Care Workers) Hospital support staff ratio to hospital beds Annual running costs Total staff with an average salary of 24,000 per annum Due to the proposed design, a large proportion of the new homes built within each Retirement Community would facilitate the ease of providing health care at home or within care centres, which would reduce the numbers of hospital bed use and therefore costs. 250million75 250 16 to 1 8 to 1 100 million76
Total number of NHSPlus jobs 264,000 132,000 Hospital and Community Care Staff Support Staff (66 hospitals with 4,000 staff) (66 hospitals with 2,000 staff)
68. Later Life in the United Kingdom 2012, Page 7, National Health Service research@ageuk.org.uk 69. http://seniorhealth.about.com/od/deathanddying/tp/cause_death.htm 70. Later Life in the United Kingdom 2012, Page 7, Hospital Care research@ageuk.org.uk 71. http://www.statistics.gov.uk/hub/health-social-care/health-care-system/hospitals-and-health-care-facilities 72. NHS The Quarter 2 2012/13, David Flory Deputy NHS Chief Executive, Page 32. 73. http://seniorhealth.about.com/od/deathanddying/tp/cause_death.htm st 74. Derby Hospitals NHS Foundation Trust Annual Report and Accounts for the year ending 31 March 2012, Page 11 75. We have over estimated the cost of each hospital to allow for improved facilities specific to those of SPA and over 76. (422 million 1159 = 364,107) rounded up to 400,000 per bed for new 250 bed hospitals.
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EDUCATION
EDUCare Schools, Accommodation and Employment
Additional funding from the proposed NICs will contribute to the following projects and will assist the current Government, Priority School Building Programme (PSBP), whilst providing limited accommodation and employment for graduates.
SCHOOLS
The Government has stated that it requires 4 billion per annum to achieve their target for school renovation and construction, (PSBP).77 Therefore an annual grant of 10 billion will be allocated to help facilitate the Governments wish, which will offer this funding to refurbish and construct both Primary and Secondary schools in the UK over a period of five years. Given that there will be a rise in Primary School pupils of 20% by 202078 it is recommended that a number of these new Primary Schools be constructed within the proposed 84 Social Communities. Each community will consist of 40,000 homes of varying sizes with the average occupancy being 2.479 persons per home with a total number of 96,000 people in each community. The number of children under 16 out of a population of 67.2 million80 in 2010 was 11.6 million81 which equates to a 17.26 per cent of the total UK population. Therefore of the 96,000 residents residing within the new communities 16,570 will be under 16 years of age. By allocating this funding it may also be assumed that additional employment in construction and teaching will also have been created.
77. http://www.guardian.co.uk/education/2012/sep/30/new-schools-smaller-coalition-budget And Ministerial statement on education funding for 2012/13 Capital Funding 78. http://www.guardian.co.uk/education/2012/jul/21/primary-schools-cope-pupil-bulge 79. http://www.ons.gov.uk/ons/rel/family-demography/families-and-households/2012/stb-families-households.html#tabHousehold-size Page 9 80. http://www.ons.gov.uk/ons/rel/npp/national-population-projections/2010-based-projections/stb-2010-based-nppprincipal-and-key-variants.html#tab-Children--ageing-and-older-people 81. http://www.ons.gov.uk/ons/rel/npp/national-population-projections/2010-based-projections/stb-2010-based-nppprincipal-and-key-variants.html#tab-2010-based-principal-population-projections
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STUDENT ACCOMMODATION
There continues to be a demand / supply shortfall between student numbers and available beds in university and private sector accommodation. Private sector accommodation is only available to 28 per cent of students, whilst university provided accommodation has increased by only 1 per cent as a proportion of full time students since 2008.82 The average cost of student accommodation throughout the UK83 Outside London London 4,004 5,069 333.67 per month 422.42 per month
Under the proposed regime, it is recommended that a minimum of 264,000 new purpose built properties are constructed for students, which will be owned and managed by the proposed Social Fund. These properties will be built across the UK which will provide affordable and sustainable accommodation for students. It is recommended that each apartment is 36m2 at a construction cost of 43,200 each.84 Rent will be charged, inclusive of energy, water and waste disposal at a cost of 3,600 per annum or 300 per month. 50 out of the 300 shall go to the Local Authority where the apartments are located. Total construction costs Annual rental income (3,000) Annual return on capital investment (After deduction of 50 for Local Authority / excludes labour costs) 11.5 792 6.9 per cent billion million
This programme will be able to offer 264,000 students superior, sustainable and affordable accommodation, which will reduce their annual accommodation costs by a minimum of 1,000 per annum, excluding additional savings on water and energy costs. The net rental income will be returned to the proposed Social Fund, which will continue to look at additional ways where sustainable investment can help increase the budget for education over the long term.
82. King Sturge: Student Accommodation Autumn 2010 Page 7 and 8. 83. http://www.nus.org.uk/en/advice/money-and-funding/higher-education/average-costs-of-living-and-study/ 84. Construction costs calculated at 1,200 per m2 - http://www.channel4.com/4homes/build-renovate/selfbuild/planning/a-z-of-self-build-guides/self-build-costs-how-much-does-it-cost-to-build-a-house-10-05-13
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THE GRADUATE EMPLOYMENT PROGRAM

More than 300,000 students graduate each year in the UK85 18.9% of graduates are unemployed from 0 to 2 years after graduation86 6.7% of graduates are still unemployed between 2 and 4 years after graduation.87 The average graduate starting salary is 20,000 per annum.88 The average graduate starting salary from the top 100 companies is 29,000.89 The best paying jobs for graduates are in London, which creates a Brain Drain, from other UK cities.90
Under the proposed regime, it is recommended that 60,000 full-time, 2 year contract jobs are offered to graduates each year. This employment is to be offered for the management and additional employment opportunities that are to be created within each of the new 150 sustainable towns. Offering employment to our graduates will eradicate the short term (0 2 years), unemployment rate amongst them and also keep a fair share of our Brightest Minds, within our cities other than London. The annual salary for each graduate is to be 24,000 per annum, which is 20 per cent above the national average starting salary. The annual salary liability at the start of the second year will be 2.88 billion
There are no negative sides to offering employment and experience to our graduates who may otherwise be claiming benefits and perhaps falling behind with their student loan payments.
85. http://news.bbc.co.uk/2/hi/uk_news/education/7828279.stm 86. ONS: Graduates in the Labour Market: 6 March 2012: Page 4 87. ONS: Graduates in the Labour Market: 6 March 2012: Page 4 88. http://graduatefog.co.uk/2012/2187/average-graduate-salary-10000/ 89. http://www.localgov.co.uk/index.cfm?method=news.detail&id=107133 90. http://www.highfliers.co.uk/download/GMReport12.pdf
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LIFE
Financial Assistance, Housing and Employment for those in the UK who are Most in Need There are currently 13 million people (After housing costs - AHC) living in poverty in the UK.91 The current unemployment rate in the UK is 7.8 per cent92 and there are 4.5 million people on the local authority waiting list for homes.93 Current government policies on housing includes building more affordable homes, improving the quality and quantity of rented housing, helping more people buy their home and provide housing support for the vulnerable.94
Under the proposed regime, it is recommended that the following projects are implemented and that employment is offered to those in the UK who are most in need.
The Annual Life Grant of 48 billion will Eradicate poverty in the UK and provide every citizen with a minimum standard of living. The construction of new homes will Reduce the current burden on the Local Authority waiting lists for housing and create affordable and sustainable housing and towns by constructing 3.36 million new homes. The employment opportunities will Significantly reduce the unemployment rate and those currently on benefits and offer training, skills and qualifications as well as help develop the sustainable industry and health sectors, by creating 856,000 full-time and 400,000 part-time employment opportunities. The Health Care Facilities will Provide illness prevention education and sports facilities for each of the 84 new towns, with the focus being on prevention rather than cure.
91. Living Standards, Poverty and Income inequality in the UK 2012, IFS Commentary C124, Jonathan Cribb, Robert Joyce, and David Phillip, JRF Joseph Rowntree Foundation 92. http://www.hrmguide.co.uk/jobmarket/unemployment.htm 93. https://www.gov.uk/government/news/new-scheme-will-offer-hope-to-millions-on-housing-waiting-lists 94. Department for communities and Local Government: Topic Housing: https://www.gov.uk/government/topics/housing
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LIFE GRANT
Under the proposed regime, 48 billion will be made available annually to offer financial assistance to those who in the UK who are most in need. This annual grant will be offered to The estimated 13 million people living in poverty in the UK who will be made up from some of the people in the following income and tax brackets; In 2009-10, an estimated95 3.7m taxpayers had total income between 12.0m taxpayers had total income between And to some of those who currently receive the following benefits Total number of people claiming96 Housing Benefit Council Tax Benefit Housing Benefit or Council Tax Benefit Claiming both 06,475 and 10,000 10,000 and 20,000
5.05 million 5.92 million 6.52 million 4.45 million
3.98 million Housing Benefit recipients were single. Almost 1.2 million of the 1.77 million recipients with at least one child dependant were single. 3.73m of the 5.92 million recipients of Council Tax Benefit were aged under, 65.97 67% of Housing Benefit recipients were tenants of Social Sector. 65% of Housing Benefit recipients and 66% of Council Tax Benefit recipients were also in receipt of Income Support, income-based Jobseekers Allowance, income-based Employment and Support Allowance or Pension Credit. The average weekly amount of Housing Benefit was The average weekly amount of Council Tax Benefit was 89.4298 15.7298
Under the proposed regime, poverty as measured by 60 per cent of median income after housing costs (AHC) will be eradicated. 48 billion will be made available annually for the 13 million people considered to be living in poverty, by offering them additional income benefits. Although, not all claimants will receive an equal amount of additional benefit, and without taking into consideration the 1.256 million jobs created which are aimed primarily at our most in need, the average additional benefit would equate to 3,692 per annum or 71 per week for 13 million UK residents.
95. HMRC Income Tax Liabilities Statistics 2009-10 to 2012-13, The Economy 27 April 2012, Table 5, Page 14 th 96. 97. 98. DWP Statistical Summary 14 Nov 2012 ISSN 1462-9798 Housing Benefit / Council Tax Benefit Page 1, 4 and 5
th
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SOCIAL HOUSING
Current government policies on housing includes building more affordable homes, improving the quality and quantity of rented housing, helping more people buy their home and provide housing support for the vulnerable.99 Current Government policies and schemes on new housing include NewBuy Guarantee, Right to Buy, FirstBuy, New Homes Bonus and loan guarantees for developers.100
Under the proposed regime, 3.64 million affordable and sustainable homes will be built over the next five years. These small towns of 40,000 homes will be built in every UK city with the larger cities having two or more towns. These homes will be offered to those who are most in need, including a large number of the current 5 million people who are on the Local Authority waiting list for housing. Many of these homes will also be offered to single parent families. The average home will be offered at an affordable weekly rent of 92.00 inclusive of energy, water and waste management. Where necessary and under the same regulations as current Government programmes, tenants will be encouraged to purchase their new home. The new homes shall include 1, 2, 3 and 4 bedroom homes, with the average size of each home being 48m2, and shall cost 1,200 per m2 to construct.
The average home will cost Total construction costs Annual rental income Annual return on capital invested excluding labour charges
57,600.101 210 17.4 8.3%
billion billion
Under the current Affordable Housing Programme, the budget for 150,000 new homes is 4.5 billion, which would mean the average home would cost 30,000 and not 57,600 as in our estimation.102
99. Dept for Communities and Local Government: Topic Housing. https://www.gov.uk/government/topics/housing
100. Dept for Communities and Local Government: https://www.gov.uk/government/policies/increasing-the-number-ofavailable-homes 101. http://www.channel4.com/4homes/build-renovate/self-build/planning/a-z-of-self-build-guides/self-build-costs-howmuch-does-it-cost-to-build-a-house-10-05-13 TH 102. House of Commons Library Stimulating Housing Supply SN/SP/6416 7 Sept 2012 Wendy Wilson Page 3
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EMPLOYMENT
Employment will also be offered to some of those who receive the following benefits Thousands of people are receiving more on benefits than many hard working families.103
100,000 households were entitled to benefits/tax credits above 670,000 households were entitled to benefits above 175,000 households were entitled to benefits between 50,000 households were entitled to benefits above The current unemployment rate in the UK is 7.8 per cent.104
23,244 p.a. 15,600 p.a. 20,800 and 26,000 26,000 p.a.
Under the proposed regime, with the exception of the apprenticeship positions, all salaries will average at 24,000 per annum per person. This would mean that many of the new employment opportunities would be made available to those who are currently in receipt of benefits, which would therefore significantly reduce the current costs of benefit payments. Over 856,000 full-time employment positions would be created and 400,000 part-time employment positions. Many of the part-time employment opportunities would be offered to single parents. It will also enable many individuals and families to have a better standard of living by earning more money than they currently receive on benefits. It would also, lessen, benefit fraud, simply because the less people on benefits would automatically reduce the number of benefit fraud, even if the percentage of fraud stayed the same.
103. http://www.telegraph.co.uk/news/politics/7931214/Thousands-earning-more-in-benefits-than-average-wage.html 104. http://www.hrmguide.co.uk/jobmarket/unemployment.htm
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PENSIONS
The UKs public and private pension liabilities for people who are retired or currently working is 7.1 trillion.105 1.2 3.8 5.0 2.1 trillion Government employee pensions: (unfunded 0.9 trillion; funded 0.3 trillion) trillion State pensions: (all unfunded) trillion Total government liabilities trillion private sector liabilities which are all funded
Funded liabilities are pension schemes where contributions are invested. Unfunded liabilities are where contributions are immediately paid out, with any difference between incomings and outgoings being met through general taxation.
The unfunded Basic State Pension has a very weak relationship between the amount of money an individual has paid in through their National Insurance contributions and the benefits they are eligible to receive. The Government spends more than 100 billion a year on pension-age benefits, which is around one seventh of all public spending. The core problem is that our society is not saving enough for its old age and so we will have to work longer or save more, or both. 106
Under the proposed regime, apart from creating wealth through employment and equity from construction, the proposed new NICs will have total contributions of 200 billion plus which is currently twice as much than that is currently being received under the existing NICs. As an example, at the beginning of the sixth year, the projected surplus of over 120 billion would pay for the current Government pension liabilities, without the need to receive additional funds from the taxes collected under TOT or TOI.
105. http://www.if.org.uk/archives/2031/ons-reveals-full-uk-pension-liabilities 106. http://www.telegraph.co.uk/finance/personalfinance/pensions/9231696/State-pension-will-cost-146000-perhousehold.html
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RETIREMENT COMMUNITIES
The following 15 points were taken from AGEUK.ORG.UK107 1. There are currently 12 million plus older persons in the UK of State Pension Age (SPA) or older. 2. 1.7 million, pensioners live below the poverty line, with 1 million of these living in severe poverty and an additional 1.1 million others on povertys edge. 3. About 3.8 million older people live alone, of which 2 million are over 75. 4. An estimated 4 million older people in the UK have a limiting longstanding illness. 5. Two thirds of NHS clients are aged 65 and over but they receive only two fifths of total expenditure. 6. 19 per cent find it very difficult to get to their local hospital 7. Over 1 million older people living in the community were found to be malnourished. 8. Dementia is one of the main causes of disability in later life, costing the UK approximately 23 billion per year. Up to 25% of all hospital beds are occupied with older patients with dementia, who stay in hospital for longer periods than others with similar conditions. 9. There are an estimated 3,836 nursing homes and 10, 445 residential homes for people aged 65+ in the UK. The UK average annual fee for a single room in a private residential home is 502 per week and 698 per week for a nursing home. 10. Approx 342,000 older people living in private households in the UK are abused each year. 11. Nearly one in three of the oldest households in England (where the oldest person is aged 75+) live in housing which has failed the official decent homes standard. 12. Over 700,000 of people aged 65+ say they are always or often feel lonely with 5 million stating that the television is their main form of company. 13. 12% of older people feel trapped in their home. 14. 500,000 older persons aged 65+ spend Christmas Day alone. 15. There is a strong relationship between poor insulation and heating of houses, low indoor temperature and excess winter deaths of older people. There were 23,380 excess winter deaths of people aged 65 or over during the winter of 2011/12.
Under the proposed regime, 66 retirement communities will be built throughout the UK, which will cater for those of State Pension Age and over and will consist of 2.64 million, affordable, sustainable and in many cases adapted retirement properties which would include community care homes, and 1 and 2 bedroom properties. 250 bed hospital within each community which would cater for their specific needs and reduce our current reliance on the existing NHS facilities for older care and treatment. Community Care facilities providing both community and home health care. With funds from the annual Life Grant, poverty would also be eradicated amongst our oldest citizens.
107. Later Life in the United Kingdom 2012, The Whole Document research@ageuk.org.uk
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PART-TIME EMPLOYMENT for those of State Pension Age and over

The following points were taken from AGEUK.ORG.UK108 76% of older people believe the country fails to make good use of their skills and talents. Nearly 4.9 million people aged 65 and over in England take part in volunteering or civic engagement People aged 65+ say that the top benefits of volunteering are Meeting people and making friends (91%) Gets me out of myself (82%) Makes me feel needed (76%) Gives me more confidence (68%) Other benefits of volunteering are: Gives a role in life and a sense of being needed and respected Decreases mortality and improves self-rated health Increases mental health and decreases depression Reduces stress and increases life satisfaction Provides social support and interaction Healthy behaviour and the ability to cope with ones own illness Provides a positive transition from work to retirement Under the proposed regime, 200,000 part-time paying jobs will be offered to those of SPA or above. These employment opportunities would be offered as a mixture of the following 200,000 jobs 400,000 jobs 800,000 jobs 16 hours per week 8 hours per week 4 hours per week annual salary of 12,000 annual salary of 6,000 annual salary of 3,000 230.76 per week 115.38 per week 57.69 per week
These part-time employment opportunities would mainly be care positions within ones community and would primarily be offered to those of SPA, who are capable of working and who are currently considered to be living in poverty or on the edge. This would have the effect of providing work for those who are currently in receipt of benefits, and therefore, reduce the total amount of benefits which are currently being claimed. In many instances this would also alleviate the common phenomena of being alone or feeling lonely, with employment offering social interaction as well as work. This socially motivated care employment would also ensure that none of the current 500,000 UK citizens of State Pension age, who currently spend Christmas Day alone, ever do again, by being able to offer them companionship through social care. in many cases, by not relying entirely on benefits may help hundreds of thousands of our most senior citizens, gain dignity and self-worth, and potentially lessen the current rate of depression amongst our most senior and respected citizens.
108. Later Life in the United Kingdom 2012, The Whole Document research@ageuk.org.uk
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EXAMPLES
Non VAT registered business maintaining exact gross profit without deducting tax savings Links Cost of Goods Gross Profit TOT 100 60 VAT 100 60 TOT VAT TOT VAT 184 192 344.08 368.64 115.20 115.20 221.18 221.18 VAT/TOT Payable (24) (32) (44.88) (61.44) (84.79) (117.96) RP 184 192 344.08 368.64 650.05 707.78 % of TOT Price 104.35
107.14
108.88
The final price of goods or services under the proposed regime is always less expensive. Gross profit is the same, but with no further tax payable under the proposed regime, net profit would be more.
VAT registered business maintaining exact gross profit without deducting tax savings LINKS COG TOT 100 VAT 100 TOT VAT TOT VAT 184 192 321 307 GP 60 60 95.83 95.83 227.50 227.50 VAT/TOT (24) (32) (41.98) (51.17 - 32.00 = 19.17) (82.28) (96.67 51.17 = 45.50) RP 184 192 321.81 307 630.78 580 % of TOT Price 104.35
95.40
91.95
The final price under the existing tax regime is more expensive, if there is only one business link in the chain. The final price under the existing tax regime is less expensive, if there are two or more business links in the chain.
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EXAMPLES VAT business with a 15% deduction in gross profits under the new regime for tax savings LINKS COG TOT 100 VAT 100 TOT VAT TOT VAT 173 192 292 307 GP 51 60 81.46 95.83 193.38 227.50 VAT/TOT (22.65) (32) (38.17) (51.17 - 32.00 = 19.17) (72.81) (96.67 51.17 = 45.50) RP 173.65 192 292.63 307 558.19 580 % of TOT Price 110.57
104.91
103.91
Final prices of goods or services under the proposed regime are always less expensive. Gross profit is higher under the existing regime, without taking into consideration any further tax liabilities.
VAT registered businesses where retail price is equal LINKS COG TOT 100 VAT 100 TOT VAT TOT VAT 192 192 307 307 GP 66.96 60 74.96 95.83 197.35 227.50 VAT/TOT (25.04) (32) (40.04) (51.17 - 32.00 = 19.17) (75.65) (96.67 51.17 = 45.50) RP 192 192 307 307 580 580 % of TOT Profit 89.61%
127.84%
115.28%
The final price under the existing tax regime is less expensive, if there is only one business link in the chain. The final price under the existing tax regime is more expensive, if there are two or more business links in the chain. Gross profit is more under the proposed regime, if there is only one link in the chain, but less where there are two or more. Gross profits have not taken into consideration the tax savings under the proposed regime.
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EXAMPLES Non-VAT Goods and Services where 24% difference on profits LINKS COG TOT 100 VAT 100 TOT VAT TOT VAT 172 162 296 268 GP 50 62 86.25 106.95 148 183.52 VAT/TOT (22.50) (0) (38.74) (0) (75.65) (0) RP 172.50 162 296.99 268.95 510.60 451.52 % of TOT Price 93.91%
90.56%
88.43%
The final price of goods or services under the existing tax regime are always less expensive. The gross profits are larger under the existing tax regime, without taking into consideration any further tax liability. The main items that would be affected under the proposed regime would be foods, as in most cases, food is zero rated for VAT. Therefore, if there were three business links, the average weekly spend on food and nonalcoholic drinks would increase from 53.20109 to 60.16 and from 27.84110 to 31.49 for those at the bottom of the income scale. As the proposed regime will financially assist those at the bottom of the income scale under the LIFE GRANT, in real terms, they would not be affected by the increase of 3.65 per week on food and non-alcoholic drinks.
In comparison with the HMRC 17.5% Flat-Rate VAT Scheme where profits are equal LINKS COG TOT 100 VAT 100 TOT VAT TOT VAT 172 176 296 308 GP 50 50 86.25 86.25 148 148 VAT/TOT (22.50) (26.25) (38.74) (45.89) (75.65) (79.80) RP 172.50 176.25 296.99 308.14 510.60 535.80 % of TOT Price 102.17%
103.75%
104.94%
The final price is always less expensive under the proposed regime.
109. Family Spending: A report on the 2010 Living Costs & Food Survey Edition No 2011: 13/Nov/12: Page 2. 110. Family Spending: A report on the 2010 Living Costs & Food Survey Edition No 2011: 13/Nov/12: Page 4.
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PUBLIC DEBT111
Public sector net debt was 1,068 billion at the end of October 2012, at 67.9% of GDP. Public sector net borrowing (PSNB Annual Deficit) forecast for 2012/13 is 120 billion. In 2011/12, the debt interest payments on UK debt are anticipated to be 48.6 bn. Gross government national debt could rise close to 100% of GDP by 2015, way above the governments sustainable investment rule of 40% maximum.
Under the proposed regime, it is recommended that all taxes collected under TOT and TOI are used to fund public expenditure and that all National Insurance Contributions are used to fund the proposed Social Fund. Even though under current circumstances where tax receipts are not sufficient to cover public expenditure it is recommended that any shortfall is borrowed. Given that our current public sector net debt is 1,068 billion with interest payments in the region of 48.6 billion, the average interest rate payable to date would be in the region of 4.6 per cent per annum. Due to the financial and social benefits gained through the implementation of the HELP programme, it is recommended that this be allowed to run its course, as the actual financial and social benefits would seem to far outweigh the modest 4.6 per cent rate of interest we currently pay on borrowing. As an example, if 670,000 of the 856,000 full-time jobs were offered to the bread winner of the households who currently receive over 15,600 per annum in benefit payments, the benefit payment saving alone would be 10.452 billion per annum. After the initial 5 year phase of the HELP programme, and at the beginning of year 6, 120 billion plus will be available to contribute towards reducing and eventually paying off our public sector debt. It is recommended that the multiple billions that are currently owed by UK business in the form of deferred tax liabilities112 are collected over a five year period.
111. http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/ 112. Missing Billions: Richard Murphy, Researched on behalf of the TUC, taxresearch.org.uk Page 26 Table 2
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CONCLUSION
For the tax year 2011/12, Tax on Turnover and Tax on Income would produce total tax receipts of 536 billion in comparison with 474 billion under the current regime, which would leave the additional 218 billion collected under the proposed National Insurance Contributions to fund all of the social programmes under HELP. It will be far more beneficial to the country as a whole to have 120,000 HMRC Tax Agents working together with our 4.8 million businesses which will enable them to be effectively tax compliant, without the current difficulties associated with the existing regime, and to do this at a reduced cost both to business and HMRC. TOT and TOI will offer UK business a simplified and efficient form of accounting and enable HMRC to collect taxes from every UK business. This will reduce the unfair amount of taxes currently being paid by compliant businesses. This simplified regime will enable HMRC to focus on one area of evasion; that of false declaration and will have removed the necessity for tax avoidance and planning schemes. The proposed regime will enable those who generate income from the black economy to participate both with contributions and in the receipt of benefits and generate tax income on all black economy income which is spent within the normal economy. The complications of VAT compliance will be removed, which should encourage more businesses to set up in the UK, and all forms of VAT fraud will have been eradicated. Lower average tax rates will have a positive effect on both the EATR and EMTR, which will encourage profitable companies, wealthy individuals and entrepreneurs to set up or reside in the UK. Current tax payers who earn in excess of 29,500 per annum, who currently pay an unfair proportion of UK income Tax, and the 13 million of our poorest citizens will better off under the new regime, either by paying less taxes in total, or by receiving an annual subsidy to income. As TOT or TOI are paid by all UK businesses, the end result will be a fairer and lower average tax rate. In the majority of cases the price paid by business for goods and services and the final price to the end-consumer will be less expensive. The proposed NICs will contribute an additional 200 billion per annum to the UK economy as well as offering both financial and social benefits, such as long-term employment, sustainable homes, assist in improving our health and education services and eradicate poverty in the UK. Foot Note: Consideration should be given to the patent pending Insulated Steelbale Integral Super Structure, in complying with our nations need to build affordable and sustainable homes and buildings.113
113. http://www.ipo.gov.uk/p-find-publication-getPDF.pdf?PatentNo=GB2471336&DocType=A&JournalNumber=6345
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REFERENCES
1. HMRC, Making Tax Easier, Quicker and Simpler for Small Business, March 2012. Page Foreword 2. Missing Billions: Richard Murphy. Researched on behalf of the TUC, taxresearch.org.uk Page 22 and 26 3. BIS: Business Population Estimates for the UK and Regions: 17th Oct 2012: Table 1. 4. BIS: Business Population Estimates for the UK and Regions: 17th Oct 2012: Table 1.
5. 6. 7. 8.
9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. HMRC: Making tax easier, quicker and simpler for small business: March 2012. Chapter 2.4 and 2.5 Taxation and Red Tape: The Cost to British Business of Complying with the UK Tax System: Francis Chittenden, Hilary Foster & Brian Sloan. Page Summary and 26 http://www.hmrc.gov.uk/about/annual-report-accounts-1112.pdf Page 5 BIS: Business Population Estimates for the UK and Regions 2012 Table 1 BIS: Business Population Estimates for the UK and Regions 2012 Page Summary BIS: Business Population Estimates for the UK and Regions 2012 Page Summary HMRC: Making tax easier, quicker and simpler for small business: March 2012 Chapter 2.5 and 4.1 4.8 million UK Businesses 120,000 HMRC Tax Advisors = 48 per Businesses per Tax Advisor The Institute for Fiscal Studies: Living Standards, Poverty and Inequality in the UK: 2012: Jonathan Cribb, Robert Joyce and David Phillips. Page 4 The Life Grant information may be found on page 31 of this report. The Theory of Tax Evasion: A Retrospective View: Agnar Sandmo, Norwegian School of Economics and Business Administration, December 2004, Discussion Paper 31/04 Page 9 Export companies will be given the opportunity of filing under TOT or TOI or both, Page 9, 11 and 19 of this report. Said Business School, Oxford University Centre for Business Taxation: Corporation Tax in the United Kingdom, Michael P. Devereux and Simon Loretz, Page 7. BIS: Business Population Estimates for the UK and Regions 2012 Page Summary and Table 1 Taxing Corporate Income: Alan J. Auerbach, Michael P. Devereux, and Helen Simpson, Chapter 9 / 9.5 http://www.ifs.org.uk/mirrleesreview/dimensions/ch9.pdf SBS, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT versus Direct Taxation: Rita de la Feria. Page 7. SBS, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT versus Direct Taxation: Rita de la Feria. Page 7, 8. SBS, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT versus Direct Taxation: Rita de la Feria. Page 8. SBS, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT versus Direct Taxation: Rita de la Feria. Page 16. SBS, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT versus Direct Taxation: Rita de la Feria. Page 20. SBS, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT versus Direct Taxation: Rita de la Feria. Page 20. SBS, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT vs, Direct Taxation: Rita de la Feria. Page 20. SBS, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT vs, Direct Taxation: Rita de la Feria. Page 28. SBS, Oxford University Centre for Business Taxation: WP 09/06 Place Where the Supply/Activity is Effectively Carried Out as an Allocation Rule: VAT vs, Direct Taxation: Rita de la Feria. Page 16 and 17. Said Business School: Oxford University Centre for Business Taxation: Corporation Tax in the United Kingdom, Michael P. Devereux and Simon Loretz, Page 42 and 43. BIS: Business Population Estimates for the UK and Regions 2012 Table 4. See example on pages 36 within this report. The Total Tax Contribution of UK Financial Services: Report for the City of London Corporation by PWC: December 2011. Page Executive Summary Missing Billions: Richard Murphy. Researched on behalf of the TUC, taxresearch.org.uk Page 21 http://www.hmrc.gov.uk/incometax/intro-tax-allow.htm
31. 32.
33. 34.
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35. http://www.dailymail.co.uk/news/article-2136005/Record-numbers-multimillion-pound-homes-sold-despiteslump-rest-housing-market.html 36. http://www.hmrc.gov.uk/manuals/vatfmanual/vatf23300.htm 37. Missing Billions: Richard Murphy, Researched on behalf of the TUC, taxresearch.org.uk Page 3 Executive Summary. 38. http://www.independent.co.uk/news/uk/politics/war-waged-on-europes-2trn-black-economy-7944461.html 39. http://www.hmrc.gov.uk/customs/tax-and-duty.htm 40. http://www.out-law.com/en/articles/2011/november/buyers-must-factor-in-import-prices-on-online-saleswarns-hmrc/ 41. http://www.out-law.com/en/articles/2011/november/buyers-must-factor-in-import-prices-on-online-saleswarns-hmrc/ 42. http://www.hmrc.gov.uk/vat/sectors/consumers/personal-vehicles.htm 43. http://www.hmrc.gov.uk/vat/sectors/consumers/overseas-visitors.htm 44. http://www.hmrc.gov.uk/customs/arriving/arrivingeu.htm 45. http://www.hmrc.gov.uk/customs/arriving/arrivingnoneu.htm 46. http://www.telegraph.co.uk/news/politics/9707029/Two-thirds-of-millionaires-left-Britain-to-avoid-50p-taxrate.html 47. Said Business School, Oxford University Centre for Business Taxation: CBTC Corporate Tax Ranking 2012, Katarzyna Bilicka and Michael P. Devereux. Page 6. 48. Said Business School, Oxford University Centre for Business Taxation: CBTC Corporate Tax Ranking 2012, Katarzyna Bilicka and Michael P. Devereux. Page 8. 49. Said Business School, Oxford University Centre for Business Taxation: CBTC Corporate Tax Ranking 2012, Katarzyna Bilicka and Michael P. Devereux. Page 8. 50. Said Business School, Oxford University Centre for Business Taxation: Corporation Tax in the United Kingdom, Michael P. Devereux and Simon Loretz Page 7. 51. http://www.wttc.org/news-media/news-archive/2012/tourism-uk-contributes-more-gdp-automotivemanufacturing/ 52. http://www.visitbritain.org/Images/November%202012%20IPS%20Memo%20with%20charts_tcm29-35962.pdf 53. House of Commons Library: NIC: An Introduction SN/BT/4517. Last updated: 6 February 2012 Author: Antony Seely 54. HMRC Annual Report and Accounts 2011-1, Page 5. 55. HMRC http://www.hmrc.gov.uk/rates/it.htm 56. http://news.efinancialcareers.com/15127/who-really-pays-all-the-income-tax-in-the-uk/ th 57. HMRC Income Tax Liabilities Statistics 2012-13 released 27 April 2012, Table 2.5 Page 27 58. Salaries on 120,000 jobs at the beginning of year two of 2.88 bn, has been used to calculate total annual salaries 59 in . 59. Average salaries for full-time employment are 24,000 per annum and part-time 12,000 per annum. 60. Hospital construction costs have been over calculated at 250 million per hospital, which per bed ratio is 4.5 times more expensive than the Royal Derbyshire Hospital, which cost 334 million to construct and has 1159 beds. 61. The average home size is 48m2, (2 bedrooms), http://www.channel4.com/4homes/build-renovate/selfbuild/planning/a-z-of-self-build-guides/ self-build-costs-how-much-does-it-cost-to-build-a-house-10-05-13. 62. Construction costs have been calculated at 1,200 per person to provide sufficient health care facilities.
63. Based on 96,000 residents at 1,200 per resident x 84 communities 64. Dept for Communities and Local Government: Topic Housing, https://www.gov.uk/government/topics/housing 65. Dept for Work & Pensions, 14th Nov 2012, First Release, Housing Benefit / Council Tax Benefit ISSN 1462 9798,
Page 4
66. Size and number of towns will vary depending on the needs of each city. 67. Dept for Work & Pensions, 14th Nov 2012, First Release, Housing Benefit / Council Tax Benefit ISSN 1462 9798,
Page 5
68. Later Life in the United Kingdom 2012, Page 7, National Health Service research@ageuk.org.uk
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69. http://seniorhealth.about.com/od/deathanddying/tp/cause_death.htm 70. Later Life in the United Kingdom 2012, Page 7, Hospital Care research@ageuk.org.uk
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71. http://www.statistics.gov.uk/hub/health-social-care/health-care-system/hospitals-and-health-care-facilities 72. NHS The Quarter 2 2012/13, David Flory Deputy NHS Chief Executive, Page 32 73. http://seniorhealth.about.com/od/deathanddying/tp/cause_death.htm 74. Derby Hospitals NHS Foundation Trust Annual Report and Accounts for the year ending 31 March 2012, Page 11 75. We have over estimated the cost of each hospital to allow for improved facilities specific to those of SPA and over 76. (422 million 1159 = 364,107) rounded up to 400,000 per bed for new 250 bed hospitals. 77. http://www.guardian.co.uk/education/2012/sep/30/new-schools-smaller-coalition-budget And Ministerial statement on education funding for 2012/13 Capital Funding. 78. http://www.guardian.co.uk/education/2012/jul/21/primary-schools-cope-pupil-bulge 79. http://www.ons.gov.uk/ons/rel/family-demography/families-and-households/2012/stb-familieshouseholds.html#tab-Household-size Page 9. 80. http://www.ons.gov.uk/ons/rel/npp/national-population-projections/2010-based-projections/stb-2010-basednpp-principal-and-key-variants.html#tab-Children--ageing-and-older-people 81. http://www.ons.gov.uk/ons/rel/npp/national-population-projections/2010-based-projections/stb-2010-basednpp-principal-and-key-variants.html#tab-2010-based-principal-population-projections 82. King Sturge Student Accommodation Autumn 2010 Page 7 and 8. 83. http://www.nus.org.uk/en/advice/money-and-funding/higher-education/average-costs-of-living-and-study/ 84. Construction costs calculated at 1,200 per m2 - http://www.channel4.com/4homes/build-renovate/selfbuild/planning/a-z-of-self-build-guides/self-build-costs-how-much-does-it-cost-to-build-a-house-10-05-13 85. http://news.bbc.co.uk/2/hi/uk_news/education/7828279.stm 86. ONS: Graduates in the Labour Market: 6 March 2012: Page 4 87. ONS: Graduates in the Labour Market: 6 March 2012: Page 4 88. http://graduatefog.co.uk/2012/2187/average-graduate-salary-10000/ 89. http://www.localgov.co.uk/index.cfm?method=news.detail&id=107133 90. http://www.highfliers.co.uk/download/GMReport12.pdf 91. Living Standards, Poverty and Income inequality in the UK 2012, IFS Commentary C124, Jonathan Cribb, Robert Joyce, and David Phillip, JRF Joseph Rowntree Foundation 92. http://www.hrmguide.co.uk/jobmarket/unemployment.htm 93. https://www.gov.uk/government/news/new-scheme-will-offer-hope-to-millions-on-housing-waiting-lists 94. Department for communities and Local Government: Topic Housing: https://www.gov.uk/government/topics/housing 95. HMRC Income Tax Liabilities Statistics 2009-10 to 2012-13, The Economy 27 April 2012, Table 5, Page 14 96. DWP Statistical Summary 14 Nov 2012 ISSN 1462-9798 Housing Benefit / Council Tax Benefit Page 1, 4 and 5 97. DWP Statistical Summary 14 Nov 2012 ISSN 1462-9798 Housing Benefit / Council Tax Benefit Page 1, 4 and 5 98. DWP Statistical Summary 14 Nov 2012 ISSN 1462-9798 Housing Benefit / Council Tax Benefit Page 1, 4 and 5 99. Dept for Communities and Local Government: Topic Housing. https://www.gov.uk/government/topics/housing 100. Dept for Communities and Local Government: https://www.gov.uk/government/policies/increasing-the-numberof-available-homes. 101. http://www.channel4.com/4homes/build-renovate/self-build/planning/a-z-of-self-build-guides/self-build-costshow-much-does-it-cost-to-build-a-house-10-05-13 102. House of Commons Library Stimulating Housing Supply SN/SP/6416 7 Sept 2012 Wendy Wilson Page 3
TH th th th th st
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103. http://www.telegraph.co.uk/news/politics/7931214/Thousands-earning-more-in-benefits-than-averagewage.html 104. http://www.hrmguide.co.uk/jobmarket/unemployment.htm 105. http://www.if.org.uk/archives/2031/ons-reveals-full-uk-pension-liabilities 106. http://www.telegraph.co.uk/finance/personalfinance/pensions/9231696/State-pension-will-cost-146000-perhousehold.html 107. Later Life in the United Kingdom 2012, The Whole Document research@ageuk.org.uk 108. Later Life in the United Kingdom 2012, The Whole Document research@ageuk.org.uk 109. Family Spending: A report on the 2010 Living Costs & Food Survey Edition No 2011: 13/Nov/12: Page 2. 110. Family Spending: A report on the 2010 Living Costs & Food Survey Edition No 2011: 13/Nov/12: Page 4. 111. http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/ 112. Missing Billions: Richard Murphy, Researched on behalf of the TUC, taxresearch.org.uk Page 26 Table 2 113. http://www.ipo.gov.uk/p-find-publication-getPDF.pdf?PatentNo=GB2471336&DocType=A&JournalNumber=6345
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