Sunday, April 06, 2008

On this day

in 1944 Pay As You Earn (PAYE) income tax was introduced into Britain. It was devised by Cornelius Gregg.

A simple measure that tidies things up nicely for bureaucrats* but which breaks the link between the taxed and those spending the money. Its surprising how many people only consider their take home pay and don't give a second though to how much they have been taxed and, more importantly, where that money goes and how efficiently it is used. I know it anecdotal but I would say, as a former employer and now senior manager dealing with pay and rations, that 90% of our workforce don't consider the tax element as part of their salary.

I suppose with our innumerate society a return to everyone filling out tax returns and sending a cheque once a year will never happen; but if it did I am sure there would be more holding MP's to account over Govt expenditure.

*I'm being generous and assuming it wasn't a deliberate step to separate tax and spend

1 comment:

Roger Pearse said...

PAYE (22%) should be abolished. Everyone should see what the government takes from them.

NI (11%), of course, is just a fiddle to disguise the same -- it should be merged with income tax.

But the biggest fiddle is so-called 'employers' NI. This isn't even shown on our payslips, and is a whopping 13% on everything we earn. They pretend that employers pay it. But of course this is nonsense.

Consider: if I want to pay you to do a job, and I have £100, how much of it will you get, and how much will be taken as tax? The answer is that you will get around £54, and the rest (13% + 11% + 22%) will be taken by Gordon.

Employer's NI should appear on payslips, and should either be merged with income tax too, or else with corporation tax.

No-one earning less than £10,000 should pay tax on their meagre earnings. That includes the evil 'council tax'.