Your £600,000 tax bill made 'quick & easy'

British taxpayers fork out an average £600,000 each during their lifetime.

Even the poorest households pay almost £250,000, further to the wealthiest fifth of Brits who pay around £1.2million.

The figures, based on official calculations by The Taxpayers Alliance, factor in income tax, council tax and VAT.

Unveiled this week, they were seized upon as further evidence that the UK’s tax burden needs to be lowered for the prosperity of the country.

Lord Rees-Mogg, columnist for The Times, blasted: “Taxes are already too high. The poorest fifth of households pay £250,000 in tax over a lifetime, a grotesque sum for them.

“The middle fifth pay more than £500,000; the top fifth pay £1.2 million. The top fifth undoubtedly includes some very rich people, but the majority of taxpayers, even in this group, are not rich at all. Tax falls very heavily on the poor, the old and the middle class.”

HM Revenue & Customs yesterday declined to comment on the figures, nor would it comment on the issuing of fairer taxes, saying only that the latter was a matter for the Treasury.

According to the Alliance, the figures are based on a report by the Office for National Statistics, meaning the average household pays £616,550, at today's prices.

A similar report from AXA earlier this year found the average British household will pay £603,697 tax in their lifetime.

Figures from IFA Promotion reveal the tax take fails to improve when we die: UK adults will collectively waste £1.6bn through poor inheritance tax planning.

More positively, HM Revenue & Customs has confirmed that the number of people filing their self-assessment tax return online has reached a record level.

By September 18, the tax authority had received 788,000 online returns, compared with 567,000 for the same time last year.

A total of 2m people used HMRC’s online services for self-assessing the 2004-2005 fiscal year, compared with 1.6m for 2003-04 and 1.08m for 2002-2003.

“Increased take-up is driven by a product that works,” a Revenue spokeswoman said.

Taxpayers are being offered a “quick and convenient” service, which provides real-time accounts with the ability to change their information such as contact details, the spokeswoman added.

Asked about the aim of getting 9million people to file online by 2012 in wake of some still being outside the broadband revolution, such as in rural areas, the Revenue responded:

“SA Online does not specifically need broadband access - broadband may make it easier but it can be completed via the standard 56k modem.

“Online use is normally identified as higher by disposable income rather than a rural/urban split. On this basis, SA doesn't have an impact.”

In July 2005, the government asked Lord Carter of Cole to advise on measures to increase the use of HMRC's key online services, including self-assessment.

The spokeswoman confirmed his report sets an “aspirational goal” for HMRC: to aim for universal electronic delivery of tax returns from businesses and IT literate individuals by 2012.

Yet advisors PKF, say large, mid-sized (those with turnover above £5.6 million a year) and newly registering firms will be required to file their VAT returns online, and make payments electronically, for accounting periods starting after March 31 2008.

Traders with an annual turnover in excess of £100,000 must file online from March 31 2010. Paper filing will remain an option for others until 2012.

All companies will however be required to file their company tax returns online, using XBRL, and make payments electronically, for returns due after March 31 2010.

“I think business has seen success online with HMRC such as the self-assessment filing peak in January 2006, which passed without any serious problem,” Roger Halson, deputy director of HMRC’s small & medium enterprises unit, has told Freelance UK.

“The second filing peak in May for employers also passed without a serious problem

“Lord Carter’s Review,” Mr Halson added, “is an opportunity to enable businesses to file their tax returns easily but also, it’s a very good opportunity for HMRC to see how online services can take some of the capacity for error and confusion out of the system.”


4th October 2006

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