Back in 1988, the economist Larry Summers explained why the US had no VAT: ”Liberals think it’s regressive and conservatives think it’s a money machine. If they reverse their positions, the VAT may happen.” Nearly 30 years later, the US still doesn’t have a VAT. But recent tax reform proposals by the Republican party would bring … More US tax reform: badly needed, but is the destination right?
My EU-flag cushion is finished at last. I’ve spent the last couple of days frantically sewing it together, in a race against Parliament to ensure it’s ready by the time Theresa May triggers Article 50. Don’t ask me to explain why, but it makes me feel slightly better equipped to face the political chaos in … More Knitting for Europe (or Woolly Surds)
One answer to that question might be “when it’s a probate fee”. The government has announced a new regime for probate fees, linked to the value of estates, which will replace the current fixed fee from May this year. Instead of the current £215 (or £155 through a solicitor), executors will pay on a sliding … More When is a tax not a tax?
At the Autumn Statement in November, the Office of Budget Responsibility (OBR) seemed to betray a certain frustration with the lack of information available about the government’s plans for Brexit. As I noted in my blog, flagging up a change in the OBR’s remit, the OBR confessed in its Economic and Fiscal Outlook (EFO) to … More The dog that didn’t bark in the Budget
The government’s response to the consultation on “Making Tax Digital” – requiring businesses to keep digital records and make quarterly updates to HMRC – was published this week, together with draft legislation. But, rather like Theresa May at a press conference, the government doesn’t answer some of the big questions. Businesses, agents and rep bodies … More Making Tax Digital: fundamental questions remain unanswered
Last Thursday’s FT carried an intriguing story about a German tax avoidance scheme with €billions at stake: the so-called “cum-cum” dividend-stripping device. While we generally think of the Germans as highly disciplined, this looked like an example of complete chaos. And the aggressive artificiality of the scheme took me back to the dark ages of … More Scandal in Frankfurt: tax avoidance pays dividends for German banks
A number of today’s papers have carried parts of, or references to, Angela Merkel’s new year message. Given the vacuum in political leadership in the UK, I decided it was worth translating in full. For any cynics who may read this: I’m not blind to Germany’s faults. Indeed, I’ve got a blog in the pipeline … More Happy New Year – from Angela Merkel
Angela Merkel warned last week against British cherry–picking on Brexit. Or rather, she warned against “Rosinenpickerei”, which literally means raisin-picking. But this is hardly news. On 28 June, 5 days after the referendum, Merkel first included such a warning in a speech to the Bundestag, immediately before the European Council meeting and the first informal … More Raisins or cherries, the message remains the same
The Office of Budget Responsibility (OBR) has been the subject of much comment since Wednesday’s Autumn Statement. But the fact that its remit has been changed seems to have passed largely unnoticed. Tucked away among the hundreds of pages of supporting documents is a revised draft Charter for Budget Responsibility. The charter fulfils a dual … More OBR can no longer shock us
Once upon a time, in a pre-Brexit, pre-Trump world, a conservative government unexpectedly won an election. One of their key priorities was to eliminate the deficit, and in the Budget immediately following the election they came up with a way to “raise” a few £billions by what amounted to an accounting trick. They decided to … More Smoke and mirrors don’t fill the deficit