Paula's Place

Paula's Place

Wednesday, 18 February 2015

Hedging my Bets

Tax has become a subject taxing the chattering class, with more and more news of large organisations and wealthy individuals avoiding tax this has become a moral issue as much as a financial one.   The sides are forming up on a class basis as much as a political one, labour pointing to rich Tory supporters and the conservatives pointing the finger anywhere else they can to try to deflect attention.   Most recently the finger has pointed at independent small trades people ~ like window cleaners and gardeners.

The assumption is that unless a receipt is handed over for any cash payments then the might may not be declared as taxable income on tax returns.   The example that I keep hearing is having a hedge trimmed.   This just goes to show how detached from reality our political leaders have become.

As somebody who often trimms hedges I would like to point out that I always declare all my income to the best of my knowledge.   It makes no difference whatsoever whether I hand over a reciept or not, it makes no difference whether I am paid in cash, by cheque or bank transfer, I declare it all.   It would also make no difference if I choose not to declare all my income.   Small traders with low turnover are under no obligation to submit full accounts, rather we just give headline figures for turnover and deductible expenses, the difference being considered as our taxable income.   Under this system it would hardly be difficult to keep a receipt book in the van for cash payments and then just not enter any of them into the accounts.

The system operates on trust, and I must say operates pretty well.   If I make a mistake and declare £1,000 less income than I actually had then the state will lose out to the tune of around £200, this is a bit different to hiding several million pound in a tax haven, r deciding that all UK transactions are actually being made through Luxemburg.

Then they wonder why we don't trust or believe them!
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