Did you read my post of 24 August, A Letter to David Cameron? Well, you should have. You might like to move your cursor to the column on the left, locate the post of that date and click to read what I said to our Prime Minister.
If you are too idle to do that – and most of you are quite clearly – I will summarise; I said that the Government should make it absolutely clear to all that from now on no-one gets any kind of Honour unless they have an unblemished record with the tax man. We do appear to have a pretty desperate financial situation in this country and if people paid the tax they oughter pay then it would help. People who find clever dodges to avoid paying tax should go on a covert ‘black list’ maintained by HMRC (tax people to you). If you are on this list then no bloody Knighthood, or MBE or OBE or any other kind of pat on the head for you.
Now I was far too kind to mention the name of Sir Philip Green who, with his domestic arrangements abroad apparently enabling him to avoid paying very much tax, was actually very much in my mind as I wrote. I did suggest that Honours could be removed from people who held them if it is believed by HMRC that their tax affairs are, how shall I put it? Dodgy is how I shall put it. Sir Phillip has been appointed a government advisor and I suppose I was thinking, at the back of my mind, that the scales of justice might well carry all the money he hasn’t paid when he jolly well should have, in one pan, and the Knighthood and the appointment as a government advisor in the other. Look, Phil, you’re a clever old bugger and you could do us all a lot of good if you just did the honourable thing and cough up. And you’d feel much better about it. You know you would. A weight off your shoulders. I didn’t mention his name because I thought it might embarrass him and it was better for him to read what I’d said and for the ‘if the cap fits wear it’ notion to make him do something about it off his own bat.
Why do I mention all this now, today. Well, in today’s Times there is an article telling us that Mr Chris Huhne, Liberal Democrat, The Energy and Climate Change Secretary, believes that it is “not appropriate” for the Queen to give awards to wealthy businessmen who avoid paying tax in this country. “It is just as morally wrong to avoid tax as it is to claim benefits fraudulently” he said in an interview, published today. Unlike me Mr Huhne doesn’t favour the subtle approach and goes on to name a name, “Philip Green could clearly, if he were to arrange his tax affairs in a different manner and spend rather more time in the country be paying rather a lot more tax.”
Be very careful Sir Phillip. D’you see that Huhne has already knocked the Sir off your title? I’d give in if I were you.
And Mr Huhne. The very least you could do is sign up as a Follower of my blog and give me a bit of credit.
And you, dear readers, mouse your way over to the left and read that post of August 24. My thoughts, expressed there, run deeper and broader than Mr Huhne’s. Sorry Chris but them’s the facts.
Showing posts with label Politics. Show all posts
Showing posts with label Politics. Show all posts
Saturday, 18 September 2010
Tuesday, 6 April 2010
BEWARE OF POLITICIANS BEARING PERCENTAGES
Perhaps we should stop using percentages as a way of expressing greater or lesser, increase or decrease or as way of describing the part of something that is occupied by another part. A lot of people don’t really understand percentages – and here I particularly include people who should, because they use them a lot, such as politicians and media folk.
I’m exercised by the Chancellor of the Exchequer’s stated intention of increasing National Insurance payments by 1%. Well, that’s nothing is it? What did I hear the Chancellor say? ‘A penny in the pound’ - why, that’s nothing. The old percentage based Find the Lady trick is being used here. Let’s look at cases:
An employer wishes to increase an employee’s salary by £1000 a year. We’ll assume that the basic salary means that the employee will already be paying 11% N.I. (National Insurance) – so £110 would normally be deducted over the year from that sum. NI is now going to rise by that mere 1%. Employee now pays 12%, that is £120. So the sum the employee has to pay has risen by £10. If what you pay rises from £110 to £120 that is a 9% rise in the year. Mr Chancellor was using the old dodge of referring to the increase in the rate of NI charge.
In this case the employer also has to pay an NI contribution in respect of the employee above and this is calculated on 12.8% of the gross sum paid to that employee. So, in order to pay the extra £1000 to the employee the employer already has to stump up £128. And now the rate is going to go up by … just a penny in the pound … 1%. So 13.8% will have to be paid. No longer £128 but £138. Over the year that’s a 7.8% increase in the employer’s outgoings on this one employee.
And this increase will be applied to the employee’s current salary as well. And to that of everyone else on the payroll.
It’s sums like this, that employers have to do when they consider giving pay rises and, most important to the poor old long-suffering Nation, when they contemplate increasing their staffing. ‘It’s a tax on employment’ say the Chancellor’s critics. You bet it is!
A Beginner’s Guide to Percentages
Please ignore this if you just don’t care for sums
Let’s look at a very common example: Value Added Tax. VAT is levied on most articles that you buy and in the UK is calculated by adding 17.5% of the ‘real’ price to the ‘real’ price of the thing. So something that should cost you £100 ends up costing you £117.50. The £17.50 is the VAT element. That’s easy.
OK suppose you see something in a shop that is priced at £117.50 and you want to see what the VAT element of this is. If you have temporarily forgotten how that £117.50 was arrived at you might well reach for your pocket calculator and work out what is 17.5% of £117.50. So you multiply £117.50 by 0.175 (if you are an advanced mathematician) or you multiply £117.50 by 17.5 and then divide by 100 (if you are not). You find that the VAT element appears to be £20.56 (plus a tiny bit that you ignore). A bit more calculator work tells you that the article must have cost £96.94 before the VAT was added.
But we know that the article’s real price was £100 and now we remember that the VAT element to be added to it was £17.50. So how did the VAT get to be £20.56?
It’s not difficult to work out what to do to get the right answer. Call the original price x. To get the VAT-inclusive price x has to be increased by 17.5% . That is, x was multiplied by 1.175. So, to find what x is you just divide the VAT-inclusive price by 1.175. £117.50 divided by 1.175 gives you £100.
Back in 2009 when the UK Chancellor of the Exchequer reduced VAT from 17.5% to 15% you can imagine the confusion. ‘Well, it’s dropped by 2.5% innit? So if we’re selling something for £85 all we have to do is knock 2.5% off; this gives us £85 minus (get out the calculator) £2.12 if we round it down, which gives us £82.88. Get out the magic marker!
Wrong! The correct VAT inclusive price, after the VAT reduction has been taken into account, is £83.19. It may only be 31 pence that has inadvertently been given to the customer but the VATman will still want his full chunk of the action which is £10.85 so it’s the shop that takes the loss. The only safe way of handling this is first to calculate the ‘real’ price that is contained within the 17.5% VAT inclusive price (divide by 1.175 = £72.34) and then to increase the ‘real’ price by the new VAT figure of 15% (multiply £72.34 by 1.15 = £83.19).
Now, with a General Election just announced, we might well give thought to what happens if, after a new government has been elected, the VAT rate rises to 20%. Oh yes, this is a real possibility. If it happens how do you calculate what the new VAT-inclusive price is? Assume that something was on sale for £240.
You go back to step one above and calculate what the pre-VAT price was. Divide the VAT-inclusive price by 1.175 (VAT is currently 17.5%) and this gives you £204.25 as the pre-VAT price. Now multiply that sum by 1.20 (New VAT being 20%). That’s £245.10. So the VAT increase will cost you £5.10 extra on a £240 purchase.
Don’t be caught out by anyone saying to you, ‘VAT’s gone up by 2.5% so instead of charging you £240 we’ll have to charge you £240 plus 2.5%. That’ll be £246, please’. There’s only a 90 pence difference but it’s your 90 pence! Apply it to a car costing £10,000 and the argument becomes stronger.
I’m exercised by the Chancellor of the Exchequer’s stated intention of increasing National Insurance payments by 1%. Well, that’s nothing is it? What did I hear the Chancellor say? ‘A penny in the pound’ - why, that’s nothing. The old percentage based Find the Lady trick is being used here. Let’s look at cases:
An employer wishes to increase an employee’s salary by £1000 a year. We’ll assume that the basic salary means that the employee will already be paying 11% N.I. (National Insurance) – so £110 would normally be deducted over the year from that sum. NI is now going to rise by that mere 1%. Employee now pays 12%, that is £120. So the sum the employee has to pay has risen by £10. If what you pay rises from £110 to £120 that is a 9% rise in the year. Mr Chancellor was using the old dodge of referring to the increase in the rate of NI charge.
In this case the employer also has to pay an NI contribution in respect of the employee above and this is calculated on 12.8% of the gross sum paid to that employee. So, in order to pay the extra £1000 to the employee the employer already has to stump up £128. And now the rate is going to go up by … just a penny in the pound … 1%. So 13.8% will have to be paid. No longer £128 but £138. Over the year that’s a 7.8% increase in the employer’s outgoings on this one employee.
And this increase will be applied to the employee’s current salary as well. And to that of everyone else on the payroll.
It’s sums like this, that employers have to do when they consider giving pay rises and, most important to the poor old long-suffering Nation, when they contemplate increasing their staffing. ‘It’s a tax on employment’ say the Chancellor’s critics. You bet it is!
A Beginner’s Guide to Percentages
Please ignore this if you just don’t care for sums
Let’s look at a very common example: Value Added Tax. VAT is levied on most articles that you buy and in the UK is calculated by adding 17.5% of the ‘real’ price to the ‘real’ price of the thing. So something that should cost you £100 ends up costing you £117.50. The £17.50 is the VAT element. That’s easy.
OK suppose you see something in a shop that is priced at £117.50 and you want to see what the VAT element of this is. If you have temporarily forgotten how that £117.50 was arrived at you might well reach for your pocket calculator and work out what is 17.5% of £117.50. So you multiply £117.50 by 0.175 (if you are an advanced mathematician) or you multiply £117.50 by 17.5 and then divide by 100 (if you are not). You find that the VAT element appears to be £20.56 (plus a tiny bit that you ignore). A bit more calculator work tells you that the article must have cost £96.94 before the VAT was added.
But we know that the article’s real price was £100 and now we remember that the VAT element to be added to it was £17.50. So how did the VAT get to be £20.56?
It’s not difficult to work out what to do to get the right answer. Call the original price x. To get the VAT-inclusive price x has to be increased by 17.5% . That is, x was multiplied by 1.175. So, to find what x is you just divide the VAT-inclusive price by 1.175. £117.50 divided by 1.175 gives you £100.
Back in 2009 when the UK Chancellor of the Exchequer reduced VAT from 17.5% to 15% you can imagine the confusion. ‘Well, it’s dropped by 2.5% innit? So if we’re selling something for £85 all we have to do is knock 2.5% off; this gives us £85 minus (get out the calculator) £2.12 if we round it down, which gives us £82.88. Get out the magic marker!
Wrong! The correct VAT inclusive price, after the VAT reduction has been taken into account, is £83.19. It may only be 31 pence that has inadvertently been given to the customer but the VATman will still want his full chunk of the action which is £10.85 so it’s the shop that takes the loss. The only safe way of handling this is first to calculate the ‘real’ price that is contained within the 17.5% VAT inclusive price (divide by 1.175 = £72.34) and then to increase the ‘real’ price by the new VAT figure of 15% (multiply £72.34 by 1.15 = £83.19).
Now, with a General Election just announced, we might well give thought to what happens if, after a new government has been elected, the VAT rate rises to 20%. Oh yes, this is a real possibility. If it happens how do you calculate what the new VAT-inclusive price is? Assume that something was on sale for £240.
You go back to step one above and calculate what the pre-VAT price was. Divide the VAT-inclusive price by 1.175 (VAT is currently 17.5%) and this gives you £204.25 as the pre-VAT price. Now multiply that sum by 1.20 (New VAT being 20%). That’s £245.10. So the VAT increase will cost you £5.10 extra on a £240 purchase.
Don’t be caught out by anyone saying to you, ‘VAT’s gone up by 2.5% so instead of charging you £240 we’ll have to charge you £240 plus 2.5%. That’ll be £246, please’. There’s only a 90 pence difference but it’s your 90 pence! Apply it to a car costing £10,000 and the argument becomes stronger.
Wednesday, 17 March 2010
THE MANDARINS DO IT THEIR WAY
During this last winter (from which we in England are just emerging) I rediscovered the joys of Daytime Television. As the daylight disappeared (at around 4 oclock) I would emerge from my study, make a cup of tea and sit down alongside Heather, my wife, who would probably be watching one of those Property programmes - she's a great one for looking at nice, big houses. I would accept her invitation to search for something more interesting and almost inevitably find that I would come upon an episode of 'Yes, Minister'. And we would watch it. And we would find it most entertaining. And we would find it as horrifyingly appropriate to our times as we did when first we watched all those years ago.
Last week - that would be the week ending 12 March 2010 - the Spectator magazine published a supplement called 'A Manifesto - How To Save Britain in Ten Easy Steps'. Within in it was an article by Sir Antony Jay, the co-author of 'Yes, Minister', about the ways in which the senior civil servants, often called the 'mandarins', can thwart the intentions of what they ironically like to call their 'political masters'. Apart from the article itself, which I would commend to you, he offers us a list of 'techniques and strategies' that the mandarins employ to frustrate unwelcome initiatives. 'Unwelcome' can be taken to mean anything that disturbs the even tenure of their lives. Here is the list. Read it and laugh - and then weep because it's true.
1. Fixing key meeting at awkward times and reassuring ministers that they don't need to be there.
2. Saying people were unable to attend when they had never actually been asked.
3. Suppressing reports that conflicted with departmental advice or challenged departmental policy.
4. Falsely claiming that undesirable actions were prohibited by statute, or that desirable ones were demanded.
5. Leaving political advisers off circulation lists of sensitive documents (on imaginary 'security' grounds.
6. Reporting objections from people or organisations who do not actually object at all.
7. Subtly altering instructions and agreements when writing manuals and reports.
8. Setting up interdepartmental committees to examine controversial proposals.
9. Wide circulation of proposals for comment and suggestion (never chased up for a response).
10. Sending ministers around the country, indeed the world, for ceremonial reasons to represent the department or the government.
A stage version of 'Yes, Prime Minister' opens at the Chichester Festival on 13 May.
Last week - that would be the week ending 12 March 2010 - the Spectator magazine published a supplement called 'A Manifesto - How To Save Britain in Ten Easy Steps'. Within in it was an article by Sir Antony Jay, the co-author of 'Yes, Minister', about the ways in which the senior civil servants, often called the 'mandarins', can thwart the intentions of what they ironically like to call their 'political masters'. Apart from the article itself, which I would commend to you, he offers us a list of 'techniques and strategies' that the mandarins employ to frustrate unwelcome initiatives. 'Unwelcome' can be taken to mean anything that disturbs the even tenure of their lives. Here is the list. Read it and laugh - and then weep because it's true.
1. Fixing key meeting at awkward times and reassuring ministers that they don't need to be there.
2. Saying people were unable to attend when they had never actually been asked.
3. Suppressing reports that conflicted with departmental advice or challenged departmental policy.
4. Falsely claiming that undesirable actions were prohibited by statute, or that desirable ones were demanded.
5. Leaving political advisers off circulation lists of sensitive documents (on imaginary 'security' grounds.
6. Reporting objections from people or organisations who do not actually object at all.
7. Subtly altering instructions and agreements when writing manuals and reports.
8. Setting up interdepartmental committees to examine controversial proposals.
9. Wide circulation of proposals for comment and suggestion (never chased up for a response).
10. Sending ministers around the country, indeed the world, for ceremonial reasons to represent the department or the government.
A stage version of 'Yes, Prime Minister' opens at the Chichester Festival on 13 May.
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