Taxes

[Rob Z]

A question elsewhere on this forum about write-offs for vehicle insurance made me wonder about the taxing situation in the UK. Here are a few questions for my British friends to comment upon:

1. Does everyone in the UK (England, Scotland, Wales, etc) use and pay taxes on the same tax return to HM Taxing authority, or is there a separate return and tax structure for someone, for example, in Scotland vs someone in Wales?

2. Is the VAT tax that I see mentioned on all products throughout the UK? Do you have to add it to your bills to clients for work you do in their house? My friends in Canada tell me that because their two add-on taxes (one is called GST I think) are so high they are under frequent and constant pressure by customers to do jobs off the books so they (the customer) can avoid these add-on taxes. This sounds attractive for the contractor but of course it is hard to hide a huge volume of work from the taxing authorities.

3. Comparison of total magnitude of taxes in UK and the US...I realize this is hard to do without extensive analysis, and I am only wondering in general terms. My wife is a teacher and I am a small business owner, so our personal income isn't terribly high compared to many other taxpayers. We end up paying about 25% of our gross income to the Feds (after all adjustments for deductions and so forth), 7.65% for social security tax, and about 5% to the state of Virginia. On the local level, personal property such as cars are taxed at ~4.2% of assessed value, and out house property taxes work out to ~1% of assessed value. Virtually all purchases in stores have a 5% sales tax which goes to the local county and the state. There are other taxes on utility bills, cell phones, etc, but the big ones are the ones that I mentioned above.

Other states have drastically different rates for their local taxes. I think Virginia is about in the middle of the pack as far as that goes.


So anyway, I'm just curious to see how things are in the UK. Any comments will be welcome.

 

[TilingLogistics]

A question elsewhere on this forum about write-offs for vehicle insurance made me wonder about the taxing situation in the UK. Here are a few questions for my British friends to comment upon:

1. Does everyone in the UK (England, Scotland, Wales, etc) use and pay taxes on the same tax return to HM Taxing authority, or is there a separate return and tax structure for someone, for example, in Scotland vs someone in Wales?

The tax return is for the whole of the UK

2. Is the VAT tax that I see mentioned on all products throughout the UK? Do you have to add it to your bills to clients for work you do in their house? My friends in Canada tell me that because their two add-on taxes (one is called GST I think) are so high they are under frequent and constant pressure by customers to do jobs off the books so they (the customer) can avoid these add-on taxes. This sounds attractive for the contractor but of course it is hard to hide a huge volume of work from the taxing authorities.

This is a difficult one Rob. You can choose here to be VAT registered but if you do you get your VAT back on what you spend but you have to charge VAT but once you go over about £60,000 income per year you have to be VAT registered. The difference in Canada is they have GST(Government State Tax) about 8% last time I looked and then a slightly differing rate of PST (Provincial State Tax) Varies from 0-7% depending on the state but still a maximum combined total of less than the UK. The current rate of VAT here in the UK is 17.5% but goes down to 15% tomorrow until 1/1/2010

3. Comparison of total magnitude of taxes in UK and the US...I realize this is hard to do without extensive analysis, and I am only wondering in general terms. My wife is a teacher and I am a small business owner, so our personal income isn't terribly high compared to many other taxpayers. We end up paying about 25% of our gross income to the Feds (after all adjustments for deductions and so forth), 7.65% for social security tax, and about 5% to the state of Virginia. On the local level, personal property such as cars are taxed at ~4.2% of assessed value, and out house property taxes work out to ~1% of assessed value. Virtually all purchases in stores have a 5% sales tax which goes to the local county and the state. There are other taxes on utility bills, cell phones, etc, but the big ones are the ones that I mentioned above.

Lower rate taxpayers here pay about 22% Higher rate 40% The we have around 11% National Insurance. Then we have 17.5% VAT, Car Tax, Duty on Cigarettes and Alchohol, Duty on Fuel & VAT Then we all pay Council Tax and that varies on price of property and area but typically around £1200 per year etc etc

Other states have drastically different rates for their local taxes. I think Virginia is about in the middle of the pack as far as that goes.


So anyway, I'm just curious to see how things are in the UK. Any comments will be welcome.

Hope that gives you a bit of an insight and I am sure others will add more.

Kev

 

[Rob Z]

Hi Kev,

Thanks for the info...my initial thought is that we are getting more or less equally hammered on both sides of the Atlantic.

You mentioned fuel taxes...one thing that I have read that is quite different is that fuel taxes in Europe are extremely high compared to what we pay here. The federal and state tax on a gallon of gas is quite high by percentage of the overall cost of the gallon, but I am told that you guys pay a hell of a lot more than we do.

 

[TilingLogistics]

Yep Not only do we get slammed with Fuel duty currently around 55p on the litre we then pay another 17.5% VAT on it again. I think this is one of the few Countries in the World that pays around 15% more for diesel. In most countries it is cheaper as it used to be here, till the Government realised they had convinced more people to use Diesel so they increased the duty on Diesel and now its more expensive:mad2:

Kev

 

[sWe]

'bout taxes... Total taxation in the US is 28.3% of GNP. Total taxation in the UK is 36,6% of GNP. Guess what the total taxation percantage of GNP is in Sweden. Anyone?








48,2%, second only to Denmark, and that's quite recent. Sweden's had the highest tax pressure in the world since about the 70's.

That said, we do get decent value for our tax money, but we've got the same problems the rest of the world struggle with, ie over-spending by the government, overly politicised spending, incompetent local administators, etc etc.

Anyways. If you don't like paying taxes, don't move to Sweden, but if you don't mind paying taxes, and do like socialized health care (which you brits have anyways iirc), free schools and uni, and blondes...


BTW, about gas prices... The tax on gasoline is about 75% over here. One liter costs about 12sek, which is about a pound, or 1.4usd. That's about 5.3usd per gallon.

 

[White Room]

I could suffer the blonds for the higher tax break

 

[Rob Z]

Kev

I was just chatting with one of my Canadian friends about the cost of diesel fuel...here it is quite a bit more expensive than the cost of gas, same in Canada....and we were wondering why. I'm told that diesel is easier to manufacturer, and I find it hard to believe that there is such a huge additional cost in distribution to justify the added cost. I wanted to get the diesel option in my GMC, but the upcharge for the motor, heavier tranny and rear was about $7000 on a truck that was already $almost $30000.

It sure is ballsy of them to tax you on the fuel and then put the VAT on it. :mad2:I have similar issues with some business and property taxes. They tax me at the point of sale and then I have to pay property tax on the full, undepreciated cost of the tool, including sales tax. So we end up paying tax on a tax.

I'm with Whitebeam on the issue of Swedish blondes. :yes:

SWE, there was an article I read recently (I don't recall where it was, maybe a news magazine), and the author had interviewed a young Danish man who said with the ease of travel and finiding employment in the EU, many Danes were leaving Denmark for work (and lower taxes on their income in whichever country they chose to work in) and only returned to Denmark for college or other services that were at low or no cost to them. I wonder how long that will be sustained by the Danish people.

 

[sWe]

Kev

I was just chatting with one of my Canadian friends about the cost of diesel fuel...here it is quite a bit more expensive than the cost of gas, same in Canada....and we were wondering why. I'm told that diesel is easier to manufacturer, and I find it hard to believe that there is such a huge additional cost in distribution to justify the added cost. I wanted to get the diesel option in my GMC, but the upcharge for the motor, heavier tranny and rear was about $7000 on a truck that was already $almost $30000.

It sure is ballsy of them to tax you on the fuel and then put the VAT on it. :mad2:I have similar issues with some business and property taxes. They tax me at the point of sale and then I have to pay property tax on the full, undepreciated cost of the tool, including sales tax. So we end up paying tax on a tax.

Almost all craftsmen over here use diesel engines. Diesel is about 1sek more expensive per litre, which is about 1/8 of a dollar. The tax on diesel is a little lower than on gasoline though. Diesel engines are a bit more expensive than petrol engines over here as well; for example, a basic Volkswagen Caddy, which is the by far most popular craftsman van over here, costs about 22k usd with a regular petrol engine, whereas the basic diesel version is about 4k usd more expensice. Since dieselengines pretty much always give more miles per litre than gasoline engines, the added expense of the diesel engine pays off quite fast, despite the diesel price being slightly higher than regular gasoline.

Over here, there are three taxes on gasoline and diesel; "gasoline tax" / "diesel tax", environmental tax (a punishment tax for being an evil user of combustion engines), and VAT.

I'm with Whitebeam on the issue of Swedish blondes. :yes:

SWE, there was an article I read recently (I don't recall where it was, maybe a news magazine), and the author had interviewed a young Danish man who said with the ease of travel and finiding employment in the EU, many Danes were leaving Denmark for work (and lower taxes on their income in whichever country they chose to work in) and only returned to Denmark for college or other services that were at low or no cost to them. I wonder how long that will be sustained by the Danish people.

That's a problem, true, but I can imagine it's far worse for the danes than it is for Sweden, as Denmark is connected to mainland Europe, whereas Sweden isn't in the same way. The taxes need to come down, but at the same time, there's an unwillingness to sacrifice the social security net that's been in place for more than 50 years. If we weren't so damn few, the overhead wouldn't be so damn high...

 

[Rob Z]

SWE,

I searched for VW Caddy, and here is an image I found:

http://www.direct-vehicle-leasing.net/images/car_images/VW%20Caddy%20New.jpg


It looks similar to the Ford Transit Connect that I have been reading so much about. I'm sure these types of vehicles are going to become more common here in the US in the next few years.

But who cares about trucks and fuel and taxes...we want to hear more about hot Swedish babes!

 

[Olz]

Diesel was cheaper than petrol in the UK about 8 months or so ago, but diesel cars have always traditionally been more expensive, the government realised that more people were buying diesel cars so they upped the tax on diesel which is now about 10p a litre more than petrol.

Although the cost of diesel now about £1.06 a litre was about £1.25 a litre in the not too distant past.

We pay tax on the diesel, then VAT on the diesel, then Road Tax and in some places we have to pay another charge to drive into certain area's known as congestion charging. The general rule is that if the goverment can tax it they will, and if they dont at the moment there probably planning how they can as we speak.

 

[sWe]

SWE,

I searched for VW Caddy, and here is an image I found:

http://www.direct-vehicle-leasing.net/images/car_images/VW Caddy New.jpg


It looks similar to the Ford Transit Connect that I have been reading so much about. I'm sure these types of vehicles are going to become more common here in the US in the next few years.

But who cares about trucks and fuel and taxes...we want to hear more about hot Swedish babes!

Ford Transit is fairly common as well. Pick-up type vehicles are more or less non-existant.

As for babes...

[yt]m-J9ZpQYW8s[/yt]


:rofl:

 

[Rob Z]

WTF were we talking about???:dizzy2::drool5::wub:

 

[grumpygrouter]

Ford Transit is fairly common as well. Pick-up type vehicles are more or less non-existant.

As for babes...

[yt]m-J9ZpQYW8s[/yt]


:rofl:

Looks like Newcastle was the right choice for the Forums xmas bash then.............

 

[White Room]

It started off well but fell by the wayside at the end:dizzy2::drool5:

 

[beanz]

I reckon the forum bash should be on the party boat to Sweden!! BTW i don't think i'm EVER going out in Britain again, after that video...