Did you know?
- 20 is the smallest primitive abundant number.
- 20 can be written as the sum of three Fibonacci numbers: 13+5+2.
- 20/20 can mean that Specsavers will never make any money from you.
- 20 is the optimum number of quarter or half turns required to solve a Rubik cube (in the worst case)
The UK tax system has a similar fascination with the number:
- 20% is the current corporation tax rate.
- 20% is the current income tax basic rate.
- 20% is the current, standard rate of VAT.
Discounted by 10%, to 18%, it is also:
- The main pool writing down allowance
- The lower rate of CGT
So what we hear you say… Well, the Treasury have asked for ideas to include in the Summer Budget. What about aligning all taxes at the 20% rate?
- Increase all investment tax allowances (WDAs) to 20% to stimulate investment.
- Abandon the 18% and 28% CGT rates and have a single rate; you guessed it, 20%.
- Set National Insurance contributions at 10% for employers, and 10% for employers, and perhaps abandon the high income caps. A composite 20% rate.
- Reduce IHT to 20% if the gifts or bequests are used to fund retirement savings for the recipients.
Of course, these changes would represent a significant tax give-away, but wouldn’t it be interesting to see if lower taxes would stimulate growth and investment, or would make little difference and merely increase our national debt?
If you have more sensible suggestions for George, in advance of the Summer Budget, you can submit a representation online at https://www.surveymonkey.com/s/BudgetJuly15