A pinch of salt on your fish and chips?

Article Abstract:

UK Chancellor of the Exchequer Nigel Lawson has had his opportunities for incorporating tax reform into the UK Budget thwarted by the policies of Prime Minister Margaret Thatcher. Abolishing the mortgage interest concession for owner occupiers could save the Exchequer billions of pounds sterling, but Thatcher has refused such a measure. Thatcher has also vetoed any change in the zero rating of goods under value added tax (VAT) on grounds that zero rating aids the poor, but the Institute of Fiscal Studies has demonstrated that 63% of the benefits of zero rating go to the well-off, while only 37% of below-average earners benefit. Reforming VAT would cut costs for the Customs and Excise office, help eradicate inconsistencies which burden the poor, and prepare the UK for the European internal market in 1992, at which time a positive VAT will be required on those items presently zero rated: food, fuel, and children's clothes.

Tax reform, Thatcher, Margaret

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What it costs to pay tax

Article Abstract:

A study of the cost of complying with the requirements of the UK tax system by the Bath University Center for Fiscal Studies reveals that for every 1,000 pounds sterling of goods sold by firms with a turnover below 100,000 pound sterling, the average cost of compliance was 37 pounds sterling. Firms with a turnover of more than 1 million pounds sterling had an average compliance cost of 1.70 pounds sterling. The study also shows that it cost around 5 billion pounds sterling to run the tax system in the UK in the 1986 - 1987 tax season. Results of the study seem to indicate that the compliance requirements of the tax system put smaller businesses at a disadvantage when the firms compete in the same market as large companies.

Research, Analysis, Taxation, Value-added tax, Bath, University of

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