As soon as Alistair Darling announced his planned rises in road tax my nostrils twitched, sniffing a political disaster in the making. It's all very well going after a few thousand rich people - they don't have the collective voice to do much about it, and they wouldn't get much public sympathy anyway. But when you hit people on average earnings with a 30 per cent hike, you're affecting several million people - people like a friend of mine who drives a six year old VW Passat Estate to ferry his wife and three children about in. His wife doesn't work, he earns around £30k a year and really struggles to make ends meet. His car tax is £210 this year and will rise to £300 next year. His car is only worth about five times that amount. He won't be voting Labour next time, that's for sure.
A Labour MP describes this increase as Labour's poll tax on wheels. He may well be right, but can Darling climb down on this too, without looking like a political eunuch? After the 10p tax climbdown, the postponement of the planned rise in fuel duty and the forced changes to CGT this Chancellor is looking more accident prone than Norman Lamont.#end
55 comments:
Well if New Labour could only get one policy decision right the first time then they wouldn't have to keep U-Turning would they?
The army joke that: 'If at first you don't succeed, maybe bomb disposal is not for you'.
Labour need to learn the army's message about planning and preparation before committing to something. Otherwise they will just keep on blowing themselves up politically.
I'm in the same boat as your friend. I bought a beaten up estate car to ferry my brood around and now face £300 next year then £400 plus the next.
I've looked at alternative cars, but realistically need an estate. Even the smaller ones leave me penalised partly as we need an auto.
You have no confidence that having chosen with an eye on current envirotax orthodoxy, you won't be penalised retrospectively in a couple of years time.
Another example of Brown's extraordinary political ineptitude. Iain, you could see this was a time bomb as soon as you heard about it. Why couldn't he see it?
Who does he talk to?
Does he talk to anyone?
Another tax U-turn ahead! What a hopeless bunch of incompetents. John Hutton was on Radio 5 this AM telling people that if they didn't like the cost of motoring, they should sell their cars. Totally out of touch.
Or how about this: I am an above-knee amputee who is not in receipt of any form a Disabled Living Allowance since I am deemed not to be disabled enough. My amputation forces me to drive an automatic - I have no choice in the matter I cannot drive a manual. My car's tax band is F compared with the manual equivalant of D. Cheers a bunch guys for taxing my disability .....
Whereas your Passat driving friend voted Labour last time? Come on Iain, we don't believe you.
A serious essential use rebate for hauliers would make sense now - as agricultural users have their red diesel, and as general inflation is fuelled by diesel costs.
But motoring in general has actually got cheaper down the decades.
While the green credentials of the Tories may have been thrown to the four winds I wouldn't support a more general tax cut on this - though another symbolic pause on the all-party escalator would perhaps be wise at this point.
I agree with Iain that this is a disastrous policy for Labour. It will - rightly - be seen as unfair and arbitrary. It makes no sense to penalise owners of cars bought several years ago, even if they drive very few miles. After all, we already have very high fuel taxes.
And it is hardly 'green' to force people to scrap cars early, since a large proportion of the lifetime energy use of a car is accounted for by its construction.
As I commented on this site when the the Chancellor announced the £2.7bn electoral bribe on the 10p tax issue, they have wasted so much trying to fix that disaster that they haven't left themselves much room for fixing these other problems. It also won't look too good if they keep reversing policies introduced only a few months ago.
As is typical of everything they touch, the New Labour planned rise in Vehicle Excise Duty (VED) has not been thought through and will become a New Labour “Poll Tax”. For example people on low incomes such as pensioners who cannot afford to buy a new car every 3 years, and have a low mileage every year will be particularly badly penalised. By contrast the well-off (as is normal under New Labour), will hardly notice the increases on VED on their gas guzzlers. Thanks to New Labour's swinging tax on a litre of fuel which has given the UK the highest fuel costs in the EU, we already have a method of controlling the number of miles travelled and thus their emissions so why do we need this sledgehammer to crack a nut?
Surely seven-year-old vehicles will be worth the least and will therefore be consigned to the scrap heap (i.e. left to rot by the roadside and the local council will be left to clean them up)?
Yes, just as Polyclinics are Poll Tax on steroids ...
Where would noolabor be without Chris Paul?
Answers on the back of a postage stamp etc .......
It's all about perceptions, Mr Paul. If the electorate think they are being screwed, they won't be pacified by being told that things used to be even worse.
Chris Paul: the point is that this is RETROSPECTIVE (look it up). It is one thing to tax new large engined cars heavily and quite another to tax cars that people have already bought and suggest that they "downgrade". For many people that just isn't feasible.
I see that even the Labour grassroots are totally out of touch with reality (not to mention principle).
Iain, I do think the remarks of
'unixman' show this Government's 'care' to be a sham!
I know of a number of disabled people who have claimed the Disability Allowances to have them turned down. I was turned down as my being able to struggle to walk for a few yards was considered 'adequate'! But my problems are nothing to what unixman shared with us.
The Country is broke. Broken by the Clumping Fist! We are doomed!!
as it was pointed out elsewhere on your blog...we have $11,502,800,000
external debt according to the CIA (See blog, Ironies Too)!
The man has ruined this country in almost everyway.
The NHS has proved not to be safe in their hands.
Education has proved not to have improved in their hands.
Policing has certainly not improved in their hands.
Punishment is a joke!
Our Armed Services are at a very dangerous level in manpower and backup.
Local Councils are restrained by top down targets.
Is there any part of our National Life that has improved?
See, where you go wrong, Iain, is believing that Darling is the real Chancellor of the Exchequer. He isn't. But how long before even his decent sense of loyalty is tested to destruction?
Iain,
He is a political eunuch – that’s his main difficulty in not looking like one.
N
"....people on average earnings..." I wish, I'm a low income tax paying pensioner and I'm shafted evry which way by these thieves....I used to have a choice, eat or heat, now my choice is eat less or heat less. Bastards!! ALL politicians are bastards!!
The BBC routinely refers to these tax increases as applying to 'the-most-polluting-gas-guzzling-cars', rather than revealing that they will penalise many drivers of ordinary family cars, including (as you've pointed out) large numbers who can't afford to buy a replacement vehicle, and whose cars will be heavily devalued anyway if the new tax is implemented.
But motoring in general has actually got cheaper down the decades.
Down the decades? Why not “during the Millennium “.I have no idea what the “All Party Escalator “ is , we may assume it is some childish wish to involve someone else in Labour Policy . On the general point that Labour are predating on motorists to burnish their “Green “ credentials this is not of course the case .They are doing so because they have squandered our money as Denis Mac Shane obligingly points out in the Telegraph and they dare not touch income tax.
The hole that Labour are in is a deeper one with steeper sides than we yet know , unemployment is going up even disguised as incapacity benefit . It still come from the tax payer and claims are rising as revenue slumps .
I AGREE WITH CHRIS PAUL
Like Chris Paul I find hard to see why anyone earning a living would vote Labour unless they are in the public sector , so I share his cynicism about such a person actually voting to hand his money over to Labour to waste
I think you are being unfair to the memory of the poll tax, or as it was then called, the "community charge".
Darling, the Exchequer, the Labour Government, are doing something completely other. They are draining the lifeblood of the country by the simple conceit that they have a divine right to run every minute aspect of our lives. They are partly achieving this on the back of so called "green" taxes, that are merely taxes, called "green". They may as be called purple taxes for all the relevance that "green" has to their use.
See Denis McShane in the Telegraph today. He cannot be the only Labour MP who is clever enough and brave enough to admit they have been fleecing the country rotten.
People are saying the car taxes are a tax too far. How much more "too far" do you want to get? The imbeciles who voted for this tyrannical government have only themselves to blame, and if it means they can't visit their timeshare in Portugal this year it serves them right. I hope the reality bites, and bites hard. I hope we see businesses fail and houses reposessed while MPs feather their second nests.
I want a revolution, a real one. One to end this idea that we should be socially controlled by a political elite. Bring it on.
I think you're right, Iain.
John Hutton said on the "Today" programme this morning that "24 out of 30 people will pay less (car tax)" which is pretty hard to reconcile with the Daily Telegraph report of nearly 70% (18m out of 26m) motorists paying more. In addition the Treasury's own figures suggest that exhaust emissions will be reduced by less than 1% by this so-called "green" measure.
This is not a green tax or a tax on gas guzzlers, but a typically NuLab badly thought out stealth tax. This indeed could be their "poll tax on wheels" or the last straw that broke the camel's back.
I'm not so sure this is Darling's doing Ian.
I suspect one Dr James Gordon Brown, Ferryhills Road, North Queensferry aka Prime Minister Brown, 10 Downing Street, Westminster. Is the real Chancellor of the Exchequer.
Alistair Darling probably spends all day idly plucking away at his eyebrows, while his civil sevants work fevorishly away rectifying Gordon's mistakes. The mistakes they had told Gordon he was making.
This follows a pattern. Labour proposes tax increases to fill the ever increasing void in public finances. They announce a tax increase (or in the case of the abolition of the 10% tax rate they don't announce it) and they hope it goes through unnoticed,but if there is a big enough fuss they back down because they know they have been grasping.
Remember a few years ago, when the government announce d a tinkering with the CFC rules for companies. They lied and said it was a minor revenue raising adjustment that will raise and extra £300 million or so. Then Shell or Vodafone, or perhaps both, responded saying that they didn't know who else the Revenue had in mind but it was going to cost them £500 million. Big fuss ensued, HMRC backed down.
Now we have another tinkering with the CFC rules that will hurt UK based multinationals who develop and license IP in their offsore operations. The Revenue wants to tax in the UK income come from intra group royalties paid to offshore CFC's, although there will be no relief for the paying group company. There is now a big fuss. Likely result: Revenue will back down.
Retrospective VED is just another try on. They can't change people's behaviour if they have already bought the car, and having higher VED doesn't discourage car use, it simply leaves the driver with less cash in his pocket and a car that is harder to sell. Which might reduce his fuel consumption, but probably won't.
How about a "fuel tax credit system", whereby you fill out a 42 page form together with all your fuel receipts for previous tax year, and the government then decides if you deserve to get back some of the tax you have already paid. Obviously single mums and the unemployed would be at the front of the queue for the biggest rebate.
This would also provide thousands of jobs for administators, call centre operators and IT consultants.
Alex
Not sure the two are comparable, although I am neither a motorist nor a lawyer.
The trend, post-Cadbury Schweppes is that the EU generally recognises the right to export capital in order to save tax, so long as the arrangements are not totally artificial, ie devoid of economic substance.
As I recall, the purpose of the IFSC companies in Cadbury was to raise finance which would then be available to the worldwide group and they therefore had genuine economic substance (even though there was a tax motive).
I don't see how the IP wheeze is compatible with Freedom of Establishment as so interpreted?
There was nothing wrong with the Poll tax.
Those that protested were those who had never paid anything in their lives to maintain the local infrastucture and intended to keep it that way. The community charge was far fairer than the property tax we now have.
Shame on those Conservative ministers who did NOT back MRS. Thatcher.
I work in a labour intensive business of 26 people, most of them part time.
They don't earn much. What they do earn is very much spent on daily living. The 10p tax rise went down them them like a ton of lead. From the remarks I hear at work this will go down even heavier.
Yep, it looks like a poll tax momenbt, but Poll Tax was a Good Thing - these VED hikes are a Bad Thing. I have three children just starting out on low pay and I live in the countryside. We buy 300 - 500 quid cars that last for two years or more if we are lucky and then throw them away. VED hikes will do tow things, give me more cheap cars and penalise low earners. How is this right?
Oh and it's got bugger all to do with global warming ( even if you believ it), it's got all to do with Labour running out of money, again. When, just when will all these socialist idiots realise that their policies always impoverish everybody? Eh? Just when?
Lord Howe's reply to a stomach turning article in this morning's Daily Telegraph, linked here, by former New Labour, Minister for Europe, Denis Macshane MP:
I'm rather dumbfounded, Denis, that you haven't proposed saving money by suggesting that the British Government withold the hard-earned tax revenue, kindly and generously donated by the British Taxpayer, which is wasted in the regular farce of transferring the EU from its Brussels offices to those of Strasbourg, simply and solely to assuage French vanity. (Unless, of course, you would contrive to suggest there is a genuine and pressing need to do so)...(no, I thought not....)
Perhaps that same Government might seek to see that throwing fifty billion pounds at a failing and badly-led Bank might actually be a poorer investment than the relatively paltry three hundred million to the Post Office, which provides a lifeline to tens of thousands of Britons who otherwise are bereft of choice locally. (Three hundred million pounds? How many failed ID Database schemes is that, I wonder? How many publically-funded Legal Aid scams to fund Terrorism and organised Crime...?)
Denis, if you want to see Government run better than it is now, then your choice is very simple indeed. With the aid of an experienced surgeon, remove your Cranium from your posterior, look at how the Government you gave support and loyalty to, have failed with such abject aplomb and campaign against it. It's Leader is a cowardly liar, unused to dealing with adversity through ten years of hiding from each and every instance of difficulty. This Government is entirely devoid of direction and integrity, vacant of conciousness and concience, divorced from reality and assimilation with those it laughingly was supposed to protect and assist. You yourself were central to this process. You yourself were an enthusiastic member of the most mendacious, dishonest and unprincipled British Governments in post-war history. A Government which now can only be supported by an ever dwindling and insignificant band of retarded nutters and sycophants. Even Polly Toynbee is beginning to stammer her rehearsed lines. If your singular ray of hope is to attempt to highlight that the Shadow Cabinet contains a number of high earners, then you hold no concept of the contempt the voter holds for your and the distant, corrupted cabal you provided membership to. Britons are not going to vote FOR Cameron. They are going to vote AGAINST Brown and his sinister clique of arrogant children. Your self-imposed delusional state of diffidence over matters such as the failed Constitreaty upon which you have withdrawn a promised Referendum are metaphorical vultures round the neck of a dying Party in precisely the same manner as Black Wednesday around the necks of John Major and his dreary, dreadful Cabinet.
Selective memory loss and self-justified failures of competence need to be addressed before you get to the plain and manifest failures of the current weak and luminously incompetent Prime Minister and his desperate panic policies.
As with the awful Major\Clarke Government, it's what you DO, and don't do that counts, not what you say and promise. Forget Policy and spending for now. They won't get you out of the hole you have helped to dig. Start with apologising for the things you have done wrong, and correct them. If you can't recognise that now, you have no business wasting your time writing articles in the Press. Instead you need to be compiling your entry for your one entitled paragraph in the next Longest Suicide note in History. Your only supporters on this thread will be the tragic supplicative cretins who regularly suspend reality to worship this woeful Government. When your only supporters are the Q-fool and his idiot amigos, you should be afraid, very afraid...
Posted by M.P. G. Lord Howe on May 27, 2008 3:42 AM
We seem to have forgotten the other Labour Stealth Tax that will hit everyone next year - National Insurance contributions will start from the first pound earned - there will be no exempt income.
It is another 10p tax fiasco in the making.
Perhaps someone can check the budget and confirm this?
This is another example of retrospective taxation. It's not the first time Greedy Grabbing Gordon has tried to change the tax rules retrospectively. Remember the rules on trusts and inheritance tax? Retrospective taxation - indeed, any form of retrospective legislation - is simply incompatible with democracy. The idea that what we do now is legal but can simply be made illegal in future is disgraceful. Similarly, it would be more honest to impose these additional charges in a year's time allowing people to avoid the tax if possible. But the reality is that this is not about changing behaviour but about grabbing as much money as possible from people. It will slowly dawn on them that this measure affects a large number of people and will be electoral suicide and then they'll make some ham-fisted attempt to correct it which will probably involve imposing some other half-thought out and equally damaging tax and so it will go on until we get the bastards out. Not soon enough, in my view.
£30k pa and a non-working wife AND three kids? Shouldn't your friend have thought this through years ago? And I am in complete agreement with the previous comment on the communuty charge.
Many people don't pay this tax.
The government have been spinning the data about these numbers. Figures this year have ranged between 1.5% to 5% evasion.
And you can bet that enforcement is skewed away from certain (Labour voting) areas and certain (Labour voting) communities.
I've gone the other way - 2 weeks ago I ordered up a new Citroen C4 diesel 92hp.
It gets 50mpg to 70mpg and has a 120 co2 rating.
The VED road tax is therefore £35 a year yet its still a good sized familly car.
Apparently even Greenpeace opposes this one, saying that it won't do anything to change people's behaviour and will bring other green taxes (ugh) into disrepute. I look forward to the inevitable U-turn, and feel slightly smug on considering that my car is 16 years old.
Anon 11.56 said
"I work in a labour intensive business of 26 people, most of them part time.
They don't earn much. What they do earn is very much spent on daily living. The 10p tax rise went down them them like a ton of lead. From the remarks I hear at work this will go down even heavier."
As I said, this has to hurt ordinary people. Until it does, they won't give a toss who is running the country.
It is interesting to see a consensus emerging on this, with the exception of Chris Paul (who seems to have left the planet and is now in a parallel universe all of his own making). The consensus is, "I have no fag money. I have no beer money. I can't afford a car." That's a fairly crucial consensus there.
Me? I shall be spending four figures on essential dental treatment in the next month. This is because my last (National Health) dentist would not do the necessary work last year, and what they did do made my teeth worse.
I sadly said goodbye to my prized 17 year-old Volvo 940 because I can no longer justify the fuel costs.
I wont be going on holiday abroad in the Autumn because my pounds are worth 20% less than they were last year.
Fortunately I am not crippled by increasing mortgages or intimidated by street crime. Nor do I have to (any longer) educate my children privately to give them a decent chance in life, despite paying for a moribund public system.
But I am still paying for an illegal war, and God knows what in foreign aid, when there are people starving in this country.
What I don't understand is why people, the masses, aren't angry about this?
The 10p tax decision was a terrible mistake, and the 10p tax u-turn was a terrible mistake too. Who can take a govt seriously that throws away 2.7 billion quid yet spends most of the rest of its time pennypinching?
How can this retrospective tax be dressed up as good for the environment.
These cars already exist and are in use. Next year people will be paying around £200 more to use them on the road but how does this help the environment?
If they decide to replace them then new cars will have to be made (bad for the environment) and the old cars perfectly servicable cars scrapped(bad for the environment).
It's just another poxy greenwashed New Labour tax innit!!
The "breaking point" on this latest "green tax"(which it patently isn't - and even Greenpeace have said it will do little) is that this greedy Government could not resist back-dating it to apply to vehicles registered 2001 onwards which negates the whole idea really if you pause to think about it(another case of the "sheep" on the backbenches missing Gordon's "smoke and mirrors" yet again(when will they ever learn - apparently never).
A lot of people(including 'natural' Labour supporters(few on the ground now and dwindling) will see a significant increase in VED from 2009/2010(just in time for the General Election) and will find the trade-in/re-sale value of their cars falling,
By all means bring in a tax targetted against so called "gas-guzzlers" but NOT retrospectively(that's the BIG mistake)or against vehicles that are regarded as popular with middle income families(or dare I say it the apochryphal 'Worcester Woman' that won Blair his landslide in 1997).
Labour have not just lost the plot" they're digging a deeper and deeper pit on this. Expect a week of bluster from No10 and then abandonment of the retrospective element of this tax together with a pledge to look at a fuel rebate for Hauliers in the Pre-Budget Statement.
People are, at last, waking up to the real injustice of being the most heavily taxed people in the 'free' world!
WHY? do we have to bear the brunt of all these 'green' issue's on a science that I, personally, do not agree with. Why are we now the conscence of the world? Why do our poliicians believe that we will make a difference compared to the USA, South America, India and China??
All the green nonsense is, is a licence by this rotten, shoddy incompetent government to tax us!
What do they want? Riots in the streets. I believe they will be acoming!
I don't understand how the British public so meekly accepts the levels of taxation there now and why no political party has the guts to stand on a platform of lower taxation - not just pennies, but LOWER.
Four hundred quid for a tax disc ? Are they insane ? Look at the cost of a TV licence (let alone the fact you have no choice) and so on.
Is everyone so thouroughly "bought off" by the purportedly generous(?) state ?
Verification word "amero"; bad omen ?
By way of comparison, here in my state in the US my tax disc is fifty dollars/year on a 2007 model. MOT equiv is about forty-five dollars/year.
according to the Tax Payers Alliance website, they have an excel spreadsheet with all the cars and changes to the VED
for the next year:-
from 3528 models listed
2929 - 83% will pay more than this year
210 - 6% will pay the same
389 - 11% will pay less than this year
the year after that
3137 - 89% will pay more
88 - 2% will pay the same
303 - 9% will pay the same
Interesting as you look down the list of cars that will pay more there are such vehicles as Vauxhall Astra, Zafira, VW Beetle, VW Touran, Renault Eapase and Peufeot 807, Citroen C8 - all due to go up by £90. These 7 seaters are usually for family people - not hot rods or petrol heads cars!!.
Chris Paul -"motoring has got cheaper" - of course it has you berk. That's what Anglo Saxon Libertarian Democratic Free Market Economies with Compassion, Resposibility and Thrift do. It's what Socialsim doesn't do. All G Brown and his junta have done is make everything more expensive, more difficult and less efficient. Gordon taking the credit for low inflation is cobblers. That was free market economics and globalisation. But he is also wrong to blame other countries for the current inflation spikes in energy and food. A lot of that has to do with failed Third Way policies with profligate spending and money supply.
But going back to VED etc - yes it probably is Nuliebours Poll Tax moment. It certainly isn't in any way 'green'.
Soemhting else - can anyone tell me or explain to me how supposedly sane and professional civil servants can go along with all this tax and policy nonsense? Surely when Gordon turned up saying that 'we've run out of money but I just thought of a new way of raising shed loads that we can pass off as green' one of them must have said "Erm, looks like bollocks to me Gordo" and got him to think again? Or are they complicit? Or far less smart than I give them credit for? Or just totally imbued with the writ of implementing governemnt policy no-matter how risible?
Some normally law abiding but cash strapped drivers of heavy CO2 emitters may be tempted to reason thus: "why not declare the car off road with a SORN and drive it anyway? Your insurance is still valid, the police are far too busy filling in forms to patrol the streets, and even if you are caught the fine is most likely going to be not much more than a couple of years' VED. After all, burglars, car thieves and even violent thugs often walk away from court with a small fine and a community order."
Those caught falling victim to such temptation (CCTV/APNR making this a doddle) may find that the British justice system is both farcical and capricious. You can receive up to 2 years and a £5000 fine for the above offence, even though it harms nobody.
The moral is that if you want to profit by breaking the law, you're far safer and better rewarded by burglary/car theft/robbery i.e. stealing from private individuals rather than the Treasury.
Gordon Brown, a perfect example of a 21st century robber baron, has his priorities. All his carefully worked out schemes, which no doubt make perfect sense to dear Chris Paul, don't come cheap.
Agree, it's madness, but I now have a very valuable car, also a Passat Estate but because it is '99 and only 2.8 litres ( and is a four-wheel drive as it happens) it attracts no penalty on road tax or congestion charge whilst polluting like mad.
look Its perfectly simple.
The new VED will not hit the poorest people, families, labour voters or the people we clobbered with the 10p disaster.
Then, when it looks unpopular, we will claim it raises £700,000,000 pounds, and there are always winners and losers in tax changes.
Then, when we get some really really bad polling data and FF and 50 Mp's threaten us, we will have a new scheme whereby VED is abolished for any vehicle pre 1999.
All others will pay a new lower rate except for 'espace and zafira' type cars and the disabled, who inexplicably, will be left on the new highest rate.
This will only cost 2.7 billion pounds to achieve.
Then comes the new lottery ticket tax.
These will not hit the poorest people, families, labour voters or the people......
The telegraph piece is at
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/05/27/do2701.xml
One thing Labour is likely to do, knowing that a general election defeat is looming, is to force through road-pricing. This is something that out-of-touch Labour MPs are committed to, and which will hammer hard-working people.
"Anonymous Anonymous said...
Agree, it's madness, but I now have a very valuable car, also a Passat Estate but because it is '99 and only 2.8 litres"
Just make sure you are using fancy oil and changing it religiously, those oil intakes are notorious.
The money has to come from somewhere.
They can't keep selling of English Hospitals to the middle East (never Scottish ones you note) and running up debt.
Although none wants to make it there is also a case for taxing petrol, to ensure the state benefits as well as those in the middle east.
Perhaps a self-styled 'Green' government should stop dropping Depleted Uranium and the most toxic munitions known to man all over Iraq and Afghanistan.
People seem to be under the impression Labour have made a foolish mistake, that needs to be pointed out.
They haven't.
They intend to shaft you
That's what they do.
You see, they think you only have any money at all courtesy of the state letting you keep some. Your poverty is of no interest to them at all. The only solution is the mussolini cure.
Alberich,
The point I was making was that HMRC seems to be trying it on with legislation toe see wether they can pluck feathers from the goose without it squawking.
The current "IP wheeze" is simply an attempt by HMRC to tax more arrangements overseas structures. The basic principles of taxation of UK based multinational groups is that no tax is paid on the income of foreign subs unless it is divied up. The exceptions arise where the legislation decides that some overseas activities or companies are simply operations to divert money to keep it out of the hands of the UK tax man, which led to the CFC rules in the legislation. Where these apply the income of a foreign sub is effectively brought within the UK tax net. Under the proposed rules a company which primarily received royalties on its IP from other group companies could fall inside the net and thus its income would be taxed currently in the UK, whereas the paying company is simply reducing its profits which is not likely to give rise to an immediate tax saving - hence an increae in overall taxation. There will no doubt be a big fuss, and the NewLab economic duffers will back down again.
Something else has occured to me that needs testing.
Road transport suffers tax of £50Bn / year yet is still the best way to get around, if not between major route centres with good rail links but certainly between not directly rail connected centres, locally and certainly for 90% (?) of freight. It must therefore be very efficient. It can suffer this huge cost and still be the most useful way for many (most?) people to do many things.
Railways need huge subsidy to keep going. It's network snd service frequency is not all convenient for the vast majority of travellers and freight uses (can't go to Tesco's on the train). Plus I suspect the cost of providing and maintaining the infrastructure is hugely costly. Rail is therefore very inefficient. There is simply a transfer payment from efficient road transport to inefficient rail transport.
On the green issue (if you believe such things - which I do not) I have read somewhere a professor of something did some analysis that showed that to travel from say London to Newcastle it is more green to use a diesel car than the railway. One of the reasons given being that locomotices and train fuel consumption has deteriorated over recent years.
So maybe it is just the Internal Combustion Engine that is the problem? It's not cars as such, it's traffic and how the road transport is powered.
Well, the average fuel consumption of all cars has improved hugely in the last twenty years (a diesel X Type does 40+ mpg on a run and still whacks along at 70 + mph). And this increase in efficiency has been stolen by the government with taxation to pay ever bigger subsidies to ineffient rail transport.
What's the flaw in this reasoning?
wrinkled weasel said...
"What I don't understand is why people, the masses, aren't angry about this?"
They are.
You need to understand that the masses, and especially the white working class, have been on the receiving end of decades of Tory contempt and attacks. It is no light thing for them to change their entirely justified perceptions. You only have, for example, to read comments on this thread to see tory nutters still saying how great the poll tax was.
Nulab are effecting a vast change. It is a mistake to think that nulab merely ignored its base. Nulab declared war on the white working class. For a long time people didn't really understand, didn't really want to believe. They do now. The Labour Party, what remains of it, will be destroyed by this war it started.
You won't find any of that on the Marxist BBC, but its true.
lola said...
"civil servants...are they complicit? Or far less smart than I give them credit for?"
Consider this. On the first interview given by John Prescott (to the Today prog) after the 1997 election he told us his first bright idea: Don't boil too much water when you make a cup of tea, it will save the planet. This line had been used time after time by previous (tory) Ministers. By and large nulab have no ideas except get more foreigners, raise more taxes and give the money to foreigners. Apart from that, say and do whatever the civil service come up with. And no, the civil service are not very smart, just full of the slimy arrogance imparted by private education.
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