What taxes should the UK implement, reform or abolish?

[35B]

Indeed, every now and then, the government gets it right. We also have a silly rate of failed or massively over-budget large IT projects. NHS being the obvious target with that.

My experience is that government is no worse than private sector on this.

Agreed. Unfortunately we can't stop our politicians running vanity projects or giving contracts to companies who enter the lowest bid but have a track record of screwing the government over.

We can stop the latter by more effective procurement (track record would be a good lever), but HS2 demonstrates the difficulty of determining whether a project is a "vanity" project or genuine investment - views can legitimately vary.

 

[Sorcerer]

We can stop the latter by more effective procurement (track record would be a good lever), but HS2 demonstrates the difficulty of determining whether a project is a "vanity" project or genuine investment - views can legitimately vary.

In principle I think the full project was definitely a genuine investment because of how it would've enabled economic growth by connecting major cities and been a great relief on rail capacity. Usually rail projects return the investments with societal benefits. The project as it is now though definitely blurs the line between vanity and investment, or it would be if said vanity project was at least something worth bragging about.

 

[Bletchleyite]

if I were grieving the loss of a relative the last thing I want is for the taxman to come along asking for a share of what's been left to us

I'm sorry, but while I think the process can be improved to make it less of an imposition at such a hard time (e.g. by extending deadlines for payment) I don't think emotion should be in any way relevant to the tax system.

This is a bit like "X's Law", pretty much all of which have led to bad law. Victims should never determine law; law should be determined by cold, hard reality alone solely by people with no emotional involvement in the matter. IHT is one such example.

 

[styles]

My experience is that government is no worse than private sector on this.

My experience is the complete opposite.

 

[Sorcerer]

I'm sorry, but while I think the process can be improved to make it less of an imposition at such a hard time (e.g. by extending deadlines for payment) I don't think emotion should be in any way relevant to the tax system.

This is a bit like "X's Law", pretty much all of which have led to bad law. Victims should never determine law; law should be determined by cold, hard reality alone solely by people with no emotional involvement in the matter. IHT is one such example.

No need to be sorry, I think you're pretty much correct on the matter. I was just rambling about why I'd be in two minds about it, but I do like to think of myself as something of a pragmatist, so I ultimately agree with you.

I am being ever so slightly factious about wealth taxes but we DO have to do something to move the burden of taxation from, especially, the middle classes and move it to those with the most. We also need more money to fund our public services and bodies that we all rely on to get us through life. That is going to have to come from some form of wealth/unearnt income based taxation if only to assuage public annoyance at what are seen as almost swingeing personal taxation levels. I cant see another way.

I would like to acknowledge this by saying that I did not see this edit before making my initial reply to the post. Despite your slight factiousness I still share the goal on needing more money and the belief that the tax burden is unfairly high on much of the population, including even high-earners who aren't exactly on the same level as the ultrawealthy like Richard Branson and James Dyson. I simply disagree with the initial solution presented.

 

[35B]

I'm sorry, but while I think the process can be improved to make it less of an imposition at such a hard time (e.g. by extending deadlines for payment) I don't think emotion should be in any way relevant to the tax system.

This is a bit like "X's Law", pretty much all of which have led to bad law. Victims should never determine law; law should be determined by cold, hard reality alone solely by people with no emotional involvement in the matter. IHT is one such example.

I agree on "X's Law". On emotion, I think that is true, but we need to recognise that voters have emotions, and those emotions affect what is politically achievable. This can be seen with IHT, but also with the reactions to "death taxes" whenever politicians try to deal with elderly care costs. Or, indeed, the views of those like @DarloRich who recite the mantra of "tax the rich".

I would like to acknowledge this by saying that I did not see this edit before making my initial reply to the post. Despite your slight factiousness I still share the goal on needing more money and the belief that the tax burden is unfairly high on much of the population, including even high-earners who aren't exactly on the same level as the ultrawealthy like Richard Branson and James Dyson. I simply disagree with the initial solution presented.

I disagree fundamentally with the framing of the problem. If government needs to spend more, then a major part of that can be achieved simply by promoting more economic activity and allow that tide to fill the Treasury's coffers. As for the rest, I think it's important to note just how much tax is paid by very few already, and to consider whether those higher taxes will actually generate the results predicted. I quote Tax Policy Associates because their analyses are generally quite considered, and they've actually thought about how to levy tax effectively, not just whack rates up.

 

[Richardr]

How about an apostrophe tax?

But I'd be bankrupt ...

The Clarksons and Dysons do use their land - they don't just leave it idle and unfarmed. Here in Lincolnshire, Dyson's invested significantly - he has a large strawberry farm under glass, which is being further developed. The myth of them parking the land is because they also get benefits from passing on assets as farmland, rather than as money or shares.

== Doublepost prevention - post automatically merged: 7 Aug 2025 ==


Agree completely - the principle of the current rules is reasonable, but the failure to recognise the cash constraints of small farms is creating distortions.

As you say they have to use it as otherwise they lose their tax avoidance, but the point I was making is that people like them and merchant bankers buying up virtually all farmland that comes to market and having no real interest in the relative profitability of that land has meant that the price of farmland exceeds its economic value many many times. Under a land tax "real" farmers will pay more than they should as a result. If there was ever a land tax the answer though will not be to add distortions to another tax but remove those from existing taxes, and if it is decided farmers need assistance do that directly and in a way that benefits them properly.

 

[m0ffy]

I’d suggest actually collecting the enormous sums of unpaid tax due under the existing regime - a figure that utterly dwarfs the misclaimed benefits pot. That, and growing the economy to increase the tax base.

 

[oldman]

I’d suggest actually collecting the enormous sums of unpaid tax due under the existing regime - a figure that utterly dwarfs the misclaimed benefits pot. That, and growing the economy to increase the tax base.

Sounds good. According to an interesting analysis by the Chartered Institute of Taxation, the tax gap is about £40bn, made up of:

Tax avoidance - £1.8 billion
Illegal activity including evasion- £11 billion
Write-offs - £9bn
Taxpayers' mistakes - £18bn

I wonder how much can realistically be recovered and how much it would cost to recover it. There's a nice table showing what HMRC thinks is the distribution.

Nature of taxpayer	Tax gap £bn
Small businesses	24.1
Mid-sized businesses	4.2
Large businesses	4.3
Individuals below £200K income or 2M assets	1.9
Wealthy individuals (800k taxpayers)	1.9
Criminals	3.5
Total	39.8

 

[Bald Rick]

My vote is for higher taxes on things that are bad for society as a whole, ie things that in the long run cause society harm, or drive inefficiency. So, a few ideas that hopefully make society healthier, cause behaviour changes to be more environmentally friendly and efficient.

Increase fuel duty, starting with the reinstatement of the 5p / litre cut, another 5p a year later, then increase per inflation minimum (we have just about the cheapest petrol in western europe).

Road distance travelled tax, applying to all powered vehicles that are registered for use on public rosds; 2p/mlie for the first 10k miles, 3p/mile thereafter.

Double Air Passenger Duty, for domestic flights and Band A (up to 2000 miles)

Double alcohol duty for off sales (I say this as a confirmed drinker) - the price of booze at the supermarket is frankly ridiculously cheap and has risen far less than inflation over the past three decades. (This would add £2.70 to a typical bottle of wine, 40p to a typical 500ml bottle of beer)

Full VAT rate on all fossil fuels where it is not charged already (yes including gas / oil for domestic and industrial consumption)

A ‘fat tax’ - same as the sugar tax on fizzy drinks but on all processed food products with high levels of sugar or fat, with higher tax payments for products higher in sugar or fat (in the same way alcohol duty is progressive).

A ‘takeaway’ tax charge of 10% on top of VAT and the fat tax for every takeway hot fast food order.

Legalise cannabis and have it charged at similar duty levels as tobacco + VAT

Cash tax; 1% on every cash deposit / withdrawl from bank accounts

Crayola tax - additional 10% income tax applies to any individual making suggestions on these pages that includes drawing lines on a map

I expect some of this will have pitfalls that I haven’t considered, and much will be controversial. It is almost all tax on spending rather than incime, but hey ho. But then it’s my opinon!

 

[Thirteen]

I don't get why a tourist tax is so taboo especially for somewhere like London, it could easily pay for things like TfL capital investment and improving the city in general.

 

[Harpo]

If we're talking about investment, let's be really clear what we mean by that - and then expect a return. Not just in terms of a BCR, important though that is, but also actually in direct return to government. Otherwise all those benefits flow outside government, and the costs fall on taxes.

I’m not comfortable with an organisation charged with provision of our key services seeking a return from them. At micro level, it justifies denying new health treatments, closing libraries or closing public toilets simply because they don’t make a profit.

As for taxation, we’ve had an illusory ‘low-tax’ nation for decades as we feasted on national assets, with gerrymandering freebies, selling infrastructure, throwing heavy industry under the bus to the benefit of developing nations, transferring capex money to excessive opex cost in PFI and, when the free money ran out, ‘austerity’ and the bleeding out of police, NHS, education, highways, court services, county councils etc.. which continues today.

HMG is not an investment bank. It’s our nations service provider. But nobody wants to pay the true cost of those services as seen here: Lots of ideas of how everyone else should pay fuelled by our current political landscape of scapegoat-seeking bigotry.

 

[DM352]

Though this is for UK taxes, in Alberta, Canada they recently reduced the first band of provincial tax form 10 to 8%. It sounded good till the provincial portion of property taxes went up to compensate some of that 2% and the rest by provincial debt if oil royalties drop!

We have no provincial sales tax (yet) unlike other provinces but a downside is we have more user fees . For example, a pass is needed for the k-country park where the G7 was held which was on e free. Museums are also quite pricey too for a family with inflation and limited subsidies so we visit them less now.

There is also a hospitality levy about 4% for many cities which helps with revenues from tourists.

 

[35B]

I’m not comfortable with an organisation charged with provision of our key services seeking a return from them. At micro level, it justifies denying new health treatments, closing libraries or closing public toilets simply because they don’t make a profit.

As for taxation, we’ve had an illusory ‘low-tax’ nation for decades as we feasted on national assets, with gerrymandering freebies, selling infrastructure, throwing heavy industry under the bus to the benefit of developing nations, transferring capex money to excessive opex cost in PFI and, when the free money ran out, ‘austerity’ and the bleeding out of police, NHS, education, highways, court services, county councils etc.. which continues today.

HMG is not an investment bank. It’s our nations service provider. But nobody wants to pay the true cost of those services as seen here: Lots of ideas of how everyone else should pay fuelled by our current political landscape of scapegoat-seeking bigotry.

Fair comment. But when we see investment justified on financial metrics, but the effect is of long term taxpayer liabilities for gains that will be made by private individuals, the old questions around public spend and private gain rear their heads. Which is part of why accounting tricks like PFI become attractive to governments.

== Doublepost prevention - post automatically merged: 8 Aug 2025 ==

My vote is for higher taxes on things that are bad for society as a whole, ie things that in the long run cause society harm, or drive inefficiency. So, a few ideas that hopefully make society healthier, cause behaviour changes to be more environmentally friendly and efficient.

Increase fuel duty, starting with the reinstatement of the 5p / litre cut, another 5p a year later, then increase per inflation minimum (we have just about the cheapest petrol in western europe).

Road distance travelled tax, applying to all powered vehicles that are registered for use on public rosds; 2p/mlie for the first 10k miles, 3p/mile thereafter.

Double Air Passenger Duty, for domestic flights and Band A (up to 2000 miles)

Double alcohol duty for off sales (I say this as a confirmed drinker) - the price of booze at the supermarket is frankly ridiculously cheap and has risen far less than inflation over the past three decades. (This would add £2.70 to a typical bottle of wine, 40p to a typical 500ml bottle of beer)

Full VAT rate on all fossil fuels where it is not charged already (yes including gas / oil for domestic and industrial consumption)

A ‘fat tax’ - same as the sugar tax on fizzy drinks but on all processed food products with high levels of sugar or fat, with higher tax payments for products higher in sugar or fat (in the same way alcohol duty is progressive).

A ‘takeaway’ tax charge of 10% on top of VAT and the fat tax for every takeway hot fast food order.

Legalise cannabis and have it charged at similar duty levels as tobacco + VAT

Cash tax; 1% on every cash deposit / withdrawl from bank accounts

Crayola tax - additional 10% income tax applies to any individual making suggestions on these pages that includes drawing lines on a map

I expect some of this will have pitfalls that I haven’t considered, and much will be controversial. It is almost all tax on spending rather than incime, but hey ho. But then it’s my opinon!

It’s worth considering how far those taxes are a) regressive and b) liable to encourage evasion and/or organised crime.

Tobacco (which in fairness you don’t mention) is already subject to very high taxation. As those taxes rise, so is the level of crime around tobacco, as the profits from bypassing taxation rise.

 

[Bald Rick]

It’s worth considering how far those taxes are a) regressive and b) liable to encourage evasion and/or organised crime.

Tobacco (which in fairness you don’t mention) is already subject to very high taxation. As those taxes rise, so is the level of crime around tobacco, as the profits from bypassing taxation rise.

Indeed, and I did say there would be pitfalls! However i’m not advocating taxes on the scale of tobacco (except on cannabis), £15 for a pack of 20 saudage rolls would be a bit steep.

 

[class ep-09]

Lorries should be charged per mile. At the end of the day they are used as business tools earning money on national infrastructure built from our taxes . They also damage the road surfaces the most.

Pretty much all countries in Europe ( and some in both Americas including US on some roads) charge lorries for using ( at least) motorways and highways .

Last year combined mileage of all lorries in UK was 17.4 billion. I guess 10-50p charge / per mile would be good idea.
How to enforce it - just take mileage at each MOT and apply tax accordingly .
For lorries going to the continent ( to avoid paying for not being on UK’s roads) make an app , where mileage is registered at point of exit and entry (with a picture of the dashboard).
Most likely , no new infrastructure is needed to enforce it.

The other tax , I’d introduce is - online purchase tax - £1 per transaction.

 

[Richardr]

Lorries should be charged per mile. At the end of the day they are used as business tools earning money on national infrastructure built from our taxes . They also damage the road surfaces the most.

Pretty much all countries in Europe ( and some in both Americas including US on some roads) charge lorries for using ( at least) motorways and highways .

Last year combined mileage of all lorries in UK was 17.4 billion. I guess 10-50p charge / per mile would be good idea.
How to enforce it - just take mileage at each MOT and apply tax accordingly .
For lorries going to the continent ( to avoid paying for not being on UK’s roads) make an app , where mileage is registered at point of exit and entry (with a picture of the dashboard).
Most likely , no new infrastructure is needed to enforce it.

No infrastructure? Recording and photographing every lorry at entry and exit?

What would you do for foreign owned lorries?

I assume also you would set up border controls on every road that crosses the NI border?

 

[The exile]

How about an apostrophe tax?

Where is the “like” button? No doubt, however, there would be uproar from the greengrocers’ federation.

 

[Harpo]

Taxing lorry miles (or charging tolls) is great if you are a nation where there is a huge flow of traffic that starts and finishes outside your borders, such as France.

Except for the (reduced) flows between Ireland/NI and the continent, we’d simply add costs to our own goods and exports.

 

[Bald Rick]

Except for the (reduced) flows between Ireland/NI and the continent, we’d simply add costs to our own goods and exports.

But also tip the balance slightly in favour of rail freight.

 

[Railwaycat]

In theory, it's a good idea to have different levels of tax on goods, services etc that can be harmful to health or the environment, but how do you administer them? Apparently, every Google search using AI is the equivalent of so much (not going to Google it!) co2 released to the atmosphere, but how do collect a tax on that?

 

[dangie]

Increase taxation on beers & spirits sold in shops or supermarkets or off-licences etc, and reduce taxation on same products sold in pubs and restaurants etc.

Shops don’t need alcohol sales to survive, but pubs & restaurants do.

 

[class ep-09]

No infrastructure? Recording and photographing every lorry at entry and exit?

What would you do for foreign owned lorries?

I assume also you would set up border controls on every road that crosses the NI border?

Why taking any photography ?

When UK registered lorry entry / exits the country it has to submit mileage to an GPS connected App (and picture of the mileage on the dashboard ) to avoid being charged for miles not driven in UK.
That includes crossings between Ireland and Northern Ireland.

Otherwise every UK lorry is charged for the mileage driven based on MOT reading.

Outside of UK lorries would have to buy vignettes at petrol stations for the duration of their stay in the UK.

Or it can’t be done because “ it is too difficult”.
It is not difficult - it is done in other countries.

== Doublepost prevention - post automatically merged: 8 Aug 2025 ==

Taxing lorry miles (or charging tolls) is great if you are a nation where there is a huge flow of traffic that starts and finishes outside your borders, such as France.

Except for the (reduced) flows between Ireland/NI and the continent, we’d simply add costs to our own goods and exports.

That is the case everywhere. German lorries with goods shipped within Germany pay this same tolls as lorries from other countries going through Germany.
That applies to all other countries too of course.
Of course tolls will be passed on to consumers but we are talking about raising taxes / revenue here in some respect to fix the roads that lorries damage but make money out of.

 

[LYradial]

Bring back purchase tax on luxury goods with emphasis on things like designer labels and jewellery.
plus a tattoo tax.
and a tax on visiting Facebook, rising exponentially each day.


i am very thick skinned

 

[Richardr]

In theory, it's a good idea to have different levels of tax on goods, services etc that can be harmful to health or the environment, but how do you administer them? Apparently, every Google search using AI is the equivalent of so much (not going to Google it!) co2 released to the atmosphere, but how do collect a tax on that?

It's a bit like the current position where biscuits with a chocolate layer are taxed more than just a biscuit and more than cakes, whether or not the cake has chocolate. The famous court case was re Jaffa cakes in 1991, which was ruled a cake, but there are still new cases today. Pringles was one such case [potato based snacks are charged differently than maize based snacks], and M&S teacakes has been a more recent case. Choosing to tax differently based on minor differences helps the lawyers and no doubt increases the price of food due to the admin involved by the retailer, I'm not sure who else benefits though.

 

[35B]

It's a bit like the current position where biscuits with a chocolate layer are taxed more than just a biscuit and more than cakes, whether or not the cake has chocolate. The famous court case was re Jaffa cakes in 1991, which was ruled a cake, but there are still new cases today. Pringles was one such case [potato based snacks are charged differently than maize based snacks], and M&S teacakes has been a more recent case. Choosing to tax differently based on minor differences helps the lawyers and no doubt increases the price of food due to the admin involved by the retailer, I'm not sure who else benefits though.

I did see a justification for why cakes are zero rated, nor biscuits, but chocolate covered biscuits are charged the full VAT percentage - it was something to do with whether they were luxury goods. And, no, the boundaries still don't make sense to me

 

[styles]

I did see a justification for why cakes are zero rated, nor biscuits, but chocolate covered biscuits are charged the full VAT percentage - it was something to do with whether they were luxury goods. And, no, the boundaries still don't make sense to me

VAT was introduced around 50 years ago to replace a more general sales tax.

The 'VA' in VAT is value added, and effectively meant luxury items.

It makes sense in many ways - rice or vegetables aren't really luxury and are essential food items, but Tunnock's wafers are clearly luxury items not required in a normal diet for people to survive.

How the evolution of VAT happened to cover the Jaffa Cakes scenario is a mystery really. The idea that cakes (chocolate-covered or not) are VAT-free, and uncovered biscuits are VAT-free, but chocolate-covered biscuits are luxury items, is clearly daft. SImilarly, the idea that Greggs can sell steak bakes without VAT under a lamp which happens to be quite warm, but if they kept it under a designated heat lamp they'd have to add 20% to it, is nonsense. Or indeed that if you buy a steak bake from Greggs it is VAT-free, but if you sit down in their shop to consume, that is VAT rated, is also clearly garbage (and one which even Greggs don't bother to enforce and no tax inspector seems to care about).

The UK seems to relish complicated tax legislation.

 

[35B]

VAT was introduced around 50 years ago to replace a more general sales tax.

The 'VA' in VAT is value added, and effectively meant luxury items.

It makes sense in many ways - rice or vegetables aren't really luxury and are essential food items, but Tunnock's wafers are clearly luxury items not required in a normal diet for people to survive.

How the evolution of VAT happened to cover the Jaffa Cakes scenario is a mystery really. The idea that cakes (chocolate-covered or not) are VAT-free, and uncovered biscuits are VAT-free, but chocolate-covered biscuits are luxury items, is clearly daft. SImilarly, the idea that Greggs can sell steak bakes without VAT under a lamp which happens to be quite warm, but if they kept it under a designated heat lamp they'd have to add 20% to it, is nonsense. Or indeed that if you buy a steak bake from Greggs it is VAT-free, but if you sit down in their shop to consume, that is VAT rated, is also clearly garbage (and one which even Greggs don't bother to enforce and no tax inspector seems to care about).

The UK seems to relish complicated tax legislation.

There are two separate issues here.

The simple, and obvious, one is that the UK does relish complicated tax legislation. This is a political issue, where politicians have responded to special interest campaigns to create highly targeted tax arrangements. There are a number of suggestions in this thread that would fall under that definition.

The more complicated one is about the nature of VAT. VAT is not just a sales tax, but a tax on the value that has been added by a producer in comparison to the input costs. The history of VAT is tightly linked to British membership of the EEC/EU, and VAT (or equivalent) taxes are now the standard form of levying sales taxes. It doesn't just apply to luxury goods, but to most items (see debates about "tampon tax" for examples of how it has been levied on necessities, and the politics thereof). When Britain was in the EU, we were unusual in zero rating childrens' clothing, rather than charging the full amount as did most EU member states. If a government department buys in professional services, VAT is payable on those services - a situation that makes accounting really complicated for organisations that sell products and services across a range of "exempt", "zero rated" and "standard rated" bands.

The specific rules for why plain biscuits and cakes are zero rated, but chocolate covered biscuits are standard rated, are lost in the mists of time - and actually aren't that complicated, as every product has to be categorised somehow. What is complicated (see https://en.wikipedia.org/wiki/Value-added_tax_in_the_United_Kingdom for a list of the categories) is the number of bands, the difference between "zero rated" and "exempt", and the lack of detail in the classifications - which is what made it worth McVities' while go to court.

 

[Bletchleyite]

VAT was introduced around 50 years ago to replace a more general sales tax.

The 'VA' in VAT is value added, and effectively meant luxury items.

That isn't what it means (though it largely is a luxury tax).

It's a tax on value added at each stage in the supply chain. So you start off with a raw material (which is taxed), then you sell it to someone who makes an interim material out of it (e.g. bricks), tax is paid on that transaction but claimed back on the raw material purchase, then that's sold to someone who makes an end product (e.g. a house*) who claims back the VAT on the brick purchase. Thus each time value is added it is taxed, but each value addition is only taxed once.

Or something like that, anyway.

* Fairly sure new homes aren't VATable but you know what I mean

It makes sense in many ways - rice or vegetables aren't really luxury and are essential food items, but Tunnock's wafers are clearly luxury items not required in a normal diet for people to survive.

How the evolution of VAT happened to cover the Jaffa Cakes scenario is a mystery really. The idea that cakes (chocolate-covered or not) are VAT-free, and uncovered biscuits are VAT-free, but chocolate-covered biscuits are luxury items, is clearly daft. SImilarly, the idea that Greggs can sell steak bakes without VAT under a lamp which happens to be quite warm, but if they kept it under a designated heat lamp they'd have to add 20% to it, is nonsense. Or indeed that if you buy a steak bake from Greggs it is VAT-free, but if you sit down in their shop to consume, that is VAT rated, is also clearly garbage (and one which even Greggs don't bother to enforce and no tax inspector seems to care about).

That was going to be resolved by applying VAT to all takeaway prepared food, which does make sense as takeaway prepared food is a luxury (the non-luxury option is to buy bread and fillings and make your own sandwiches at home). I would say I was in support of that, but enough of a campaign was mounted by the likes of Greggs that it was dropped.

Subway is a curiosity here, when sandwiches weren't toasted they were only VATable if eating in, but when Quizno's briefly entered the UK market with toasted sandwiches being their thing Subway introduced the toasting ovens too, resulting in takeaway being VATable too unless you declined it being toasted (which hardly anyone does).

The UK seems to relish complicated tax legislation.

The US is worse!

 

[deltic]

Merge Income Tax and National Insurance and have more graduated rates ie increase bands in 5p points with all income taxed the same, ie dividends, wages, self employment, pensions, bank interest etc
Increase fuel duty and introduce a carbon tax
Have a single rate of VAT with no zero rating ie no exemptions and all businesses regardless of turnover liable to be VAT registered and charge VAT
Have a land tax payable by the land owner replacing council tax and business rates based on value of land regardless of its use - and rebased on a regular basis
Put all tax returns into the public domain and require any business selling items valued at more than say £50k checks purchaser against the tax register and report if income reported and expenditure are out of kilter.