The UK over complicated personal taxation system.....

It’s not personal
As in a previous post, me too, my mum got it, my dad got it, my wife got it.
It’s got nothing to do with subsidising business.
I’m happy to discuss UC and tax credits too, but they’re a different issue. The issue in the OP is Child Benefit.

You’re failing to recognise the very important distinction.

 

Ah! I see. Whilst the first paragraph on my long OP was related to an article on the BBC raising issues about Child benefits, it was merely a catalyst that led to me thinking about the whole tax/ Welfare budget system and how the wealth generated by the country could be more equitably distributed. If you did not get much further than the first paragraph I can see why, given it's vagueness you would have focussed on it in your posts.
I would be grateful if you could read the whole post again, disregarding the f irst paragraph and see if you agree or disagree with the main thrust of my comments and opinioni that all businesses should pay living wages thus reducing the reliance of working people on benefits (UC and anything else) to make ends meet.

 

I got sidetracked responding to Donny-Red's multiple comments but you make a valid point.
In these days of super computers and the fact that things like motor and other insurance policy premiums can be tailor made for each individual circumstance the technology Is available to calculate tax and benefits in the same way. It would mean people submitting annual returns re income and liabilities online much as they do in many other countries but an army of the revenue agency could be re deployed to fraud and tax evasion duties. The key would in designing a user friendly form that is not too onerous and yet captures all the relevant informazion for the system to calculate the liability on each one.
That said, given Govts track records on IT projects it won't, and almost certainly should not, ever happen

 

Of course in an ideal world all employers would pay a ‘living wage’*.

So what happens to all the businesses for whom that’s not economically viable? It’s a simple truth of economics that it is better for the economy for those businesses to exist and employ people (cheaper for the govt to help than to let them fail). That doesn’t mean all businesses should be allowed to pay little to maximise profits, I’d be interested in any ideas to police that.

so, let’s design a ‘simple’ tax and benefits system.

How about if the government set a rule eg. A couple with one child need £1800 a month. If their employer pays them £1500, the inland revenue could automatically let DWP know that, which would release a £300 benefit ‘top up’. You’d then have complications:
People out of work - they’d be mandated to look for work and have a fortnightly meeting with a work coach until their earnings hit a certain level.
People with caring responsibilities will need relaxation of some rules and poss help w childcare costs.
Sick and disabled people may need that too plus extra money for their health problems.
All automated, how’s that sound?

It’s exactly how it works in the ‘over complicated’ U.K.

*as per the above, a ‘living wage’ isn’t the same amount for everyone, a parent or carer might need more money to ‘live’.

 

If she studies for 16 hours or more she is still classified as a dependent and excluded. If she studies less than that she may well move into being a Non Dependent and would be counted and expected to contribute.

 

A Wage Price spiral would only occur when people have too much surplus money. So in events where prices are increasing out of the norm (say energy and housing costs at the moment) there’s nothing an individual can do to stop that. Increasing wages to match the increase in these elements balances the system rather than creating a spiral. If you fail to do so you create a gap where people either cannot pay their bills or have no surplus to spend. This then creates two principle impacts. Firstly recession. Secondly a knock on impact on businesses that rely on surplus money so pubs / restaurants etc. A decent example of this is junior doctors. Over the last 12 years they have seen pay decrease in real terms by 26%. They have much less spending power to invest in secondary businesses. To bridge that gap would not create a spiral it would merely rebalance the economy.

 

This is a clear example of policy and enforcement focusing on the wrong people. The vast majority of middle and lower income people are the most stringently policed and get away with nothing, whilst lying scum bags like him get away with millions. Meanwhile our public services go down the toilet.

 

So @Tekkytyke it appears you didn’t want me to respond to your post (not for the first time).

You just wanted to pretend you were open to a discussion that was based on your incorrect preconceptions.

 

I trust Mr Zahawi will not do as Lester Piggott did. Lester also agreed to pay outstanding tax on payments HMRC discovered following investigation. Unfortunately, Lester wrote the cheque on another account that he still hadn't disclosed, hence his being offered alternative accommodation for a year!