Taxing Times

My father, over the years, has given me some snippets of advice that have stayed with me. ‘Always check the ring finger’ is one, not quite as relevant as it once was, but still useful. ‘Always be wary of a driver wearing a hat’ is another curiously accurate statement. The final nugget of truth, that I’ve been thinking about these last couple of days, is ‘don’t complain about income tax, you’ve got to be earning to pay it.’

I thought of that this week as, when I returned from work on the 3rd January, first day back after a lovely Christmas break, I found a cheery brown envelope from the tax office. Always a sight to gladden the heart. It turned out though it was the annual breakdown of my PAYE and National Insurance contributions.Now, I love a good pie chart as much as the next blogger, so I examined carefully to see where my hard earned pennies are being spent.

I don’t earn much, so my contributions over the year aren’t massive, but proportionally they reflect slices of the government budget the same as anyone else. The smallest slice of that pie, to nobody’s surprise is £20 to the EU. That’s 39p a week. Phew, good job we’ll be getting that back soon. Next up was £22 to overseas aid. Another controversial one this, but still at the tiny slice of the pie end of things. Mrs Bloke doesn’t quite earn enough to pay tax and little bloke is expertly playing his ‘I’m only ten’ card to avoid getting a full time job. Therefore my contributions pretty much represent our entire household. So, when all is said and done, what the likes of the Daily Mail and Farage get so excited about, EU payments and foreign aid, represent what I spend a year on Shreddies. (Well, Malted Wheaties, we don’t waste money on brand names.)

Foreign Aid, in the right wing press is always represented as cash handouts to sunglasses wearing foreign dictators and corrupt officials. The truth, as usual is a lot more mundane and benign. Yes, some money does get directly given to foreign governments. That money, I suspect comes with plenty of backroom diplomacy and sneaky dealing we are not aware of, it greases the wheel of world trade and diplomacy.  More aid goes to NGO’s to support specific causes. There are also disaster relief contributions and, lets not forget, the genius slight of hand that meant we could use the foreign aid budget to help cover the costs of refugees already in the country. A large chunk also goes to fund UN projects, fighting world hunger, improving infant mortality, that kind of tiresome do-gooding. So, yeah, whilst I may have some disquiet about where some of the cash goes, for such a silly slice I’m not going to get overheated about it.

The next few slices are fairly unexciting, ranging from street lights, Culture, ‘Business and Industry’ (whatever that means), Environment, worryingly small slice at £31. Transport takes us up to £73. Public Order £78. All pretty good value for money really. Defence is £95, which means I’ve probably paid for a pair of squaddies boots or 0.000023% of a Challenger Tank. Some hasty maths means that I should have a turn in my tank every 57 years. I’m in my 40’s now, that means it’s nearly my turn. Where’s my tank?!

Next up, another ‘Red Top’ red flag, is Interest paid on the National Debt. One pound more than defence at £96.00. Helpfully, it means we pay the same on the EU, Foreign Aid, Housing and Culture as we pay in debt. Sounds horrendous doesn’t it. But, let’s calm down and have a think. Got a mortgage? Had a mortgage? You’d have to be in a stunningly strong financial position these days to buy a house without incurring managed debt. And it’s the ‘managed’ part that’s important. It’s factored into your budget, taking on that debt makes you more financially flexible and robust, the same for the country as for your household. Yes, it’s a lot, but it’s still only 5.3% of the National spend.

We then take a huge step up to Education (£218). Fair enough. I have some concerns about Education policy in this country, and what I perceive as privatisation by stealth. However, I was thoroughly schooled for free, Mrs Bloke more successfully so and Little Bloke is currently begrudgingly testing his teachers patience. If we assume that yearly payment every year for a working life for all three of us, that means we’ve paid about £12,000 for our education. Our local private school charges £12,575 a year for senior schooling. Now, I’ll admit I never went skiing at Val D’Isere with my state school, but it still seems, on reflection quite good value for money.

Pensions next. Can’t touch those. Until the new generation of voters actually become politically active it’s the pensioners that decide elections so no party is going to dare reducing them. And, by the time I’m allowed to retire at 70 I’ll look forward to reaping the rewards of my contributions as all these hipster millennials will be struggling to pay our social costs. Serves them right, topknot wearing gits.

In penultimate position, at £362, is fan favourite, Health. There are few things about this country that genuinely make me proud to be a citizen. The NHS is one of them. I have had a….ahem..colourful medical history and the cost of finding private medical insurance to cover that history and exciting ailments yet to come, would be well outside my budget. I already can’t afford to go to the dentist. The NHS has its problems, undeniably, and it could do better without being used as a political football and ideological testing ground by every new government, but it was a great idea and remains a great institution.

And top of the heap, Number One, romping home with a cheeky 25%, is welfare. Benefits scroungers, refugee scumbags and lazy louts draining this taxpayers money from his wallet to keep them all in fags, crisps and Jeremy Kyle. Except, that is, obviously, complete bollocks. Yes, look hard enough and a tabloid journalist can usually find someone who is happy to be a benefit scrounger, but they are the exception, very much the exception. Got children? Get family allowance? You are on a benefit. We have one child, so, of the £455 contribution I make to the Welfare budget each year, our household gets back £991. Qualify for Tax Credits? You are on benefits. (Although that system is a shambles, for every year we ever qualified, the following year we’ve had to pay a bunch back because of over payment.) A huge chunk of the welfare budget goes out to top up the incomes of low waged earners. People who work hard to make ends meet.  The retired, the disabled, who get supplementary payments to meet extra living expenses. Benefits.

Both Mrs Bloke and I have had periods of unemployment and had to throw ourselves upon the welfare system. And let me tell you, you do not get rich in that scenario. You got about£70 a week for 6 months to replace your salary. If your partner also works, even part time, only 16 hours a week then you get no other help with mortgages or rent. After 6 months that help stops. The only way to get everything paid for by the state, is to have nothing to start with. And, I’m kinda of the opinion, that if you are clever enough to play the system to live a life of luxury from benefits, you should be hired by the government to rewrite the system. Poacher turned gamekeeper as it were.

So, all in all, I paid £1800 odd quid in Tax and National Insurance last year. Yes, that is money I would rather have in my pocket than the Chancellor’s. And if I was clever enough I would try and find ways of not paying it, limiting my liability. Let’s be honest, who wouldn’t? Who amongst us doesn’t take advantage of any loophole they can climb through. I’m just a working Joe, so my loophole’s are limited. We’ve become so holier than thou about Tax in recent years. The big companies like Google and Amazon are covered in scorn for juggling the numbers to not pay Tax on their gross (in both senses of the word) profits. But I don’t blame them, I blame the government for leaving those options open.

Lets use a health analogy, if Tax Avoidance is a disease, then Tax Law is the antibiotic. It works for a while ’til the disease mutates and becomes resistant to the antibiotic, then the cure has to refined once more.

Yes, those companies could volunteer to pay more Tax, but so can I and so can you. If you like you can write a cheque and send it with love and kisses to the treasury. Not going to though are you? Neither am I. Hell, I’m even thinking about applying for the marriage allowance and the thrupunny hapenney a year that would save us.

At the end of the day, if you are paying it, you are earning it. If you are paying a lot, then frankly, you are earning a lot. Depending on where and how you live, living on any budget can be hard. But let me say this, if you are struggling to live on 40K a year you have got a lot more options than anyone living on £14,000.

I may not like where all my money goes, but frankly, I don’t like much broadcast on BBC 1 , but I still pay the licence fee. We throw our pennies into the pot and each election we get to chose who spends them. And shortly after we’ll complain about it. Death and Taxes as Franklin said, the two certainties in life. And, I guess since I certainly can’t afford to do one, I’ll just keep paying the other.

Also, I mean it about drivers in hats. Be wary.

Postscript -Monday 9th Jan. Walking to work this morning and nearly got wiped out by a car when using a zebra crossing. Yup, he was wewaring a baseball cap. Confirmation bias, I don’t think so! 

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