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A very British attitude to tax

Here is very British YouTuber Dr Jake explaining the tax implications of monetising a YouTube channel:

On having to pay an accountant, file paperwork for self-employment, spend hours finding and filing receipts, throw himself on the mercy of a Her Majesty’s Revenue and Customs amnesty, pay hundreds of pounds in back-dated tax and spend hours every year filing paperwork so he can pay a large proportion of the small income he gets from his hobby business to the state, he says:

isn’t a huge amount of money […] not brilliant […] now I’m a law-abiding citizen […] at least I can sleep at night

I would go on an extended rant about the unseen consequences of all this, but as usual, even thinking about tax and its complications has sucked out all my enthusiasm for anything. I think I will go and have a cup of tea instead.

16 comments to A very British attitude to tax

  • Mr Ed

    Poor chap has probably broken US law by using YT to earn untaxed income in the UK, I suspect that might be wire fraud in a deranged prosecutor’s mind.

    If you donate to a Youtuber via Patreon, they have the nerve to charge VAT on a donation, adding 20% (here in the UK) to the cost of a donation, as it is apparently a ‘taxable supply’ to give your money away if you get some ‘benefit’ in return.

  • Ellen

    I was a very small publisher for a few years. But the paperwork to pay a few bucks to the assorted taxmen got to me so badly, I quit.

  • Roué le Jour

    On the one hand you have a government supposedly in favour of a “vibrant economy”, on the other a tax agency that believes self employment is prima facie tax evasion to be made as difficult as possible.

  • Julie near Chicago

    Hm. A vibrant economy would be one that vibrates a lot, no? In other words, it’s continually going back & forth & up & down.

  • Nicholas (Unlicenced Joker) Gray

    Julie, the opposite would be a dead economy- no movement at all, except for the daisies being pushed up.

  • pete

    I’m happy to pay taxes so we have schools, hospital, police, benefits for the unemployed etc.

  • There is no reason at all that schools or hospitals should be tax funded (neither my schools nor the last hospital I was in were), and no one is stopping you charitably giving your money to the unemployed, pete.

  • pete

    Perry, the reason we have tax funded schools, hospitals and benefits for the unemployed is because the people have decided to have them by electing people who want them.

    You are free to vote for candidates who don’t want any of them, but I’ll doubt you’ll find one.

    Or why not emigrate to a country where they don’t exist?

    There are plenty about.

  • Gavin Longmuir

    Pete: “… the people have decided to have them by electing people who want them.”

    That is the theory of democracy. The reality has been rather different. It is not hard to find examples of elected officials implementing policies which do not have the support of the majority of the people — or to find them implementing policies which never figured in any election.

    In fact, it can be quite difficult to find examples of politicians who were elected with the support of an absolute majority of all the citizens in their district. And unfortunately, most of the Western “democracies” have developed a semi-permanent Political Class which is both disconnected from the general citizenry and very difficult to dislodge. The dysfunctional nature of modern democracy is at the root of a lot of our problems.

  • Fraser Orr

    @Gavin Longmuir
    That is the theory of democracy.

    Although what you say is correct Gavin, in a sense it is also irrelevant. The idea of democracy is quite repugnant except perhaps as a moderating force. For example, if 60% of the people voted to kill all the Jews, would that make it ok to do so? (Not that there is any historical precedent for that of course…)

    From a more philosophical point of view, the fact is that corruption is actually necessary to keep democracies from imploding. Societies are generally speaking a triangle, with the bottom of the triangle representing the large number of people who don’t make much money (because they don’t contribute much comparative value.) At the top are the people who create business, products and services that drive the rest of the world. These people are small in number and rich. The natural tendency of democracy is for the bulk of people at the bottom to vote to take the stuff of all the people at the top. However, there is a counteracting force, namely corruption where the people at the top can buy off the legislatures to prevent them from taking all of their stuff. Of course, if the people at the bottom really did take all of the stuff of the people at the top, society would collapse, because people would stop creating businesses, jobs, products, and would retire to some place where the taxes are low, taking all their stuff with them.

    Therefore, the corruption at the bottom (the ability of the masses to purloin the stuff of the people at the top) must necessarily be counterbalanced by corruption at the top. If that isn’t the case, society would collapse into a dog eat dog hellhole.

    There is a theory that the visceral urges of the demos, the mob, would be moderated by the wise and astute aristocracy, who focus on the bigger picture, that is to say, politicians. But would anyone seriously consider a politicians to be this? Or would “opportunistic, amoral grifters” be a rather better description of most of them?

    The solution is of course freedom. People at the top and the bottom have the right to their own stuff, and people at the bottom, should they apply the necessary effort, have a free course to become people at the top. Incentives drive society. People at the bottom are incentivized to become people at the top, and people at the top are incentivized to become even more toppy top. The only people who lose are politicians. And boo hoo with that.

    The irony is that people at the tippy top are generally the most generous and charitable people in the world (even discounting the fact that they create millions of jobs for people, and useful products and services that people love so much they readily part with their money.)

    The conversion the the concept of “charity” into “entitlements” is one of the most dangerous and damaging of all a society can make. Everybody loses, everybody except sticky fingered politicians empowered by the abomination of mob rule, which is to say, democracy.

    In this new world we live in, where everything has changed, the school that my kids go to operates pretty much the same as the one I went to in the 70s and 80s. Sure they might type their essays on a computer rather than on the old mechanical typewriter I used. But fundamentally the process of helping students acquire the skills and knowledge necessary to operate as adults is almost identical Which is heartbreaking really when one thinks about what true innovation in education would be like. But, because the government not only pays for the schools, but generally speaking runs them, they are stuck in a world that Laura Ingles would feel comfortable in. It is pathetic. Were parents to pay for their kids education (perhaps with some charitable help), school would be MASSIVELY cheaper, and MASSIVELY more effective. As with everything else they do, politicians ruin education.

  • bobby b

    Gavin Longmuir
    May 17, 2019 at 4:30 pm

    “In fact, it can be quite difficult to find examples of politicians who were elected with the support of an absolute majority of all the citizens in their district.”

    Look to the USA’s state governments if you want to see this. Outside of the major metropolitan centers on the coasts, USA state governments tend to be populated by people who were elected with actual majorities, and who do stick quite closely to their campaign positions.

    Looking to the federal level of government can be depressing. Looking at most state governments restores some faith. Thankfully, it’s the state governments that have the most effect on our lives.

  • bobby b

    Fraser Orr
    May 17, 2019 at 8:02 pm

    “The idea of democracy is quite repugnant except perhaps as a moderating force. For example, if 60% of the people voted to kill all the Jews, would that make it ok to do so?”

    From a libertarian perspective, there’s a lot to be said for the old Polish system of the Liberum Veto.

    “It was a form of unanimity voting rule that allowed any member of the Sejm (legislature) to force an immediate end to the current session and to nullify any legislation that had already been passed at the session by shouting, Sisto activitatem! (Latin: “I stop the activity!”) or Nie pozwalam! (Polish: “I do not allow!”)”

    Of course, it made for an extremely weak government (yay!) that could hardly ever accomplish anything (again, yay!) and likely brought about the end of the Commonwealth. Seems pure libertarianism, like communism, fails to withstand the outside pressure of the nonbelievers.

  • There is no reason at all that schools or hospitals should be tax funded (Perry de Havilland (London), May 17, 2019 at 8:50 am)

    There is also no reason they should be tax-funded in ways that empower bureaucrats and disempower those supposedly being helped.

    – In Switzerland, the law demands you have insurance but the hospitals are privately run and a none-too-large tax on the insurance pays for the too-poor-to-pay. Swiss patients have more power than NHS patients.

    – In a voucher school system, the taxes pay the vouchers of those who cannot pay their own, but the parents have the vouchers – and more control.

    If we did without, we’d see how well we did without, but meanwhile if there were any will to empower the people supposedly being helped instead of the state functionaries, we could redesign what we have to do a lot of that.

  • Gavin Longmuir

    Bobby b: “… there’s a lot to be said for the old Polish system of the Liberum Veto.”

    A slightly more practical system would be to require a 60% vote to pass a law, but only a 40% vote to repeal a law.

    Of course, we would also have to eliminate all regulations imposed by bureaucrats — any enforceable limitations on citizens would have to be pursuant to the explicit provisions of a duly passed law.

    It would also be good to require that election of a representative requires the affirmative votes of 50% of the citizens listed on the voters role; and if no candidate reaches that threshold in an election (e.g., because of people choosing not to vote), a citizen randomly chosen from the voters role would serve until the next election.

    There are many ways democracy could be made more representative and more effective. But the politicians currently in power would unite to vote them all down.

  • neonsnake

    Having been made redundant in summer of 2008, I embarked on the grand idea of retail consultancy and working for myself. I duly setup myself up as my own firm, employed an accountant and all that. Two months into my first consultancy (MFI, for the Brits amongst us), the crash happened and they went pop. I continued valiantly for a further couple of years before giving up and entering normal corporate service again.

    (Obviously enough, were it not for the crash, I’d have rescued them. Obvs)

    It took me a good couple of years to extricate myself from the Kafka-esque tax implications of owning my own business. I’ve still had problems with company cars and so on, ever since. I’ve little idea if the amount of tax I currently pay is correct or not. I’ve taken a tax bill of “you underpaid us by several thousand pounds, so we’re going to charge you £200 extra per month” on the chin, because my “Not my fault you can’t math. Do one.” didn’t work as well as might be expected, and £200 per month doesn’t put me underwater. I dread to think of the people for whom £200 per month is the difference between affording their bills and not.

    Our tax system in the UK is deliberately complicated and Byzantine, so that people don’t challenge it. And when they screw up, it’s not their fault – it’s yours.

  • Paul Marks

    This island of Sark used to have a good taxation system – or as good as a taxation system can be. Tax was low and SIMPLE – a one page document.

    British taxes are very high and increasingly complex.

    Things were better here, at least in fiscal terms, when Nigel Lawson was Chancellor – it has been all down hill since then.

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