Ice. Ice, baby.
August 30, 2013Dear God but VAT is boring. I mean it is, isn’t it? I know my background is in direct tax and I’d probably feel differently about it if my training had been in VAT right from the start, but, be honest, all this stuff about the temperature of pies and when is a biscuit not a cake? It’s just angels dancing on the head of a pin, surely?
So how would you go about simplifying it? That’s one of the government’s priorities for the tax system, after all, isn’t it? Simpler, greener, fairer and more competitive, remember?
Well in the words of the old joke you wouldn’t start from here, obviously. There’s detailed legislation, shedloads of case law, and a lot of it is European anyway. You wouldn’t start from there but go back to first principles. Perhaps something like “if you’re a company, partnership or any other entity, or if you’re an individual in business with a turnover of more than £70k, then you have to add 20% to everything you sell, and hand it over to the government”
And then “if you’re obliged to charge 20% on your sales, you can net off the amount you have paid to other businesses or entities against the amount you receive on your own sales, and the amount you pay over to the government is the net figure.”
Too much “simplicity” and not enough “fairness”? Maybe so. Like I said, I know very little about VAT itself. But I DO know, in a rational world you wouldn’t start from here.
I mean, the writers of the VAT treatment of refunds made by manufacturers consultation have done a bang-up job, so far as I can see. It’s a sensible enough consultation document, asks the right sort of questions, even has a decent enough impact assessment at the end (yes, I know they’ve forgotten to do the small firms impact test, but the government has pretty much abolished that anyway in their latest guidance, and, yes, I’ll be coming back to that later)
So why am I not responding to it?
Because it’s rearranging the ice cubes in the silver buckets on the occasional tables next to the deckchairs on the port side of the stern of the Titanic. Instead of, you know, dealing with the bloody iceberg
tiintax 
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