“Render to Caesar the things that are Caesar’s, and to God the things that are God’s.”
The purpose of taxation is to enable government to function on behalf of the public.
The fundamental areas of government are:
1. defence of life and property by maintaining law and order,
2. maintaining an adequate food supply and a stable economy to prevent civil strife,
3. the education of the population in order to facilitate meaningful employment for the individual and
4. useful employment for the state.
To fund such activities, the government may lawfully tax a reasonable proportion of one’s employment income and fine those who add to the financial burden of government by breach of natural law. Some government is over-regulated and inhibits the entrepreneurial spirit, and some taxation is plain stealing.
The Christian Party proposes these income tax thresholds.
- 0% – tax-free threshold until £13,000 p.a., transferable to either spouse as a Marriage Tax Allowance
- 10% – £13,000-42,000
- 20% – £42,000-100,000
- 30% – £100,000+
This will stimulate economic growth, lift more workers out of the poverty trap and encourage more efficient and creative governance.
These simple tax thresholds will create a greater incentive to work and invest, boosting the whole economy. Its simplicity channels energy into growing the economy that is currently expended in pursuit of tax avoidance and tax evasion. Furthermore, by taking the lowest earners out of the tax and NIC, the unemployed and those on low wages will be less likely to use the ‘grey economy’. It will also help them to work themselves out of the poverty trap, since all their earnings will be retained.
Business needs a favourable tax regime for new capital investment in local enterprises. We support 100 per cent tax allowance for investment in plant and equipment in the year of purchase, thus removing the bureaucracy associated with tax allowances for capital depreciation. This supports indigenous business and local enterprise and helps to redress the competition from multinational companies securing favourable terms to locate in Britain and thereby distorting local development.
Business taxation and corporate tax
We will introduce a corporation tax threshold to reduce bureaucracy and increase productivity and job creation for small businesses. We will also introduce a turnover tax for corporations with more than 250 employees in order to address the tax-loophole of profits from UK commerce being diverted to other countries with more competitive corporation tax. The Christian Party supports a competitive Corporation Tax based on profit from UK commerce.
The US taxes the UK profits on multinational corporations such as Netflix at 10%, so why don’t we?
Business taxation needs to be competitive to attract inward investment to the UK. Nevertheless business uses more of the resources and infrastructure of the country than individuals, so that the appropriate burden needs to be assessed. Start-up small businesses need encouragement to flourish with the minimum of regulation, while the 2008 credit crunch demonstrated that businesses which are ‘too large to fail’ need to be regulated and scaled down to size to protect those whose livelihood is threatened by corporate failure.
Christian prudence means that the Christian Party will promote proper risk assessment by large corporations and tax them in proportion to their risk. No longer should we promote profits going to private individuals while the public purse carries the risk. To this extent, the government has an interest in the relationship between the total outgoings in salaries and other dividends and the solvency of the business. If profits were wholly retained by the business there is less risk of insolvency than when they are dispersed to employees and shareholders. It is similar to banks needing to ‘stress-test’ themselves against financial shocks on a regular basis. It is called prudent house-keeping, or as a certain Prime Minister who believed in prudent house-keeping said: “You cannot buck the market.”
Thus the Christian Party will introduce a scaling of corporation tax based upon the on-going risk of insolvency of companies to encourage less risk-taking while at the same time retaining profits for development. It was known for a long time that the banking sector failed to address its capital reserves, preferring to gamble with its investment capital rather than recapitalise stability into the financial system. It is the responsibility of government to protect workers and their health by promoting job security. Business risk cannot be monitored by government without producing a layer of bureaucracy, so the Christian Party will promote a system of corporation tax which relies upon self-monitoring by the industry of its own risk ratio. As the Bank of England sets interest rates for the wider economy, so industry will determine the risk ratio upon which government will determine the corporation tax regulator for the wider business community. Bank of England interest rates can impede successful businesses investing at the most appropriate stage in their development or trading cycle, but a corporation tax regulator, similar to the fuel regulator, can be developed to reward successful and stable businesses contributing to the local economy.
During the credit crunch, some household names disappeared from the high street, and the painstaking work of former generations who built up these businesses was squandered by the reckless risk taking of those who simply inherited someone else’s hard-earned labours. While we do not believe inheritance tax is fair, neither is it fair for someone simply to inherit a business which can threaten the livelihood of its employees by their careless and risky management of that business. Thus inheriting personal assets, the loss of which is purely personal, is different from inheriting business assets which affects employees and the local economy. This needs to be reflected in the taxation system. Similarly, the risk of failure of such a business is different if one has partial ownership in it than if one is simply employed to manage it. Thus the size and quality of the share-holder base has a bearing on the solvency of the business. The responsibility of government to the stability of the economy and of employment is thus the justification for government taking an active interest in corporation tax.
Location has a disproportionate effect upon cost of living and business rates. The Christian Party will consider how to address this through the taxation system.
Capital Gains Tax
Capital Gains Tax thresholds should encourage entrepreneurship and investors but its effect on property values and the market needs constant review.
The Christian Party believes that Inheritance Tax is double taxation. The state has no right to a person’s inheritance and taxation amounts to stealing. It is currently taxed more heavily than any other asset. The Christian Party will abolish Inheritance Tax. The energy expended by the wealthy in pursuit of inheritance tax avoidance and evasion can now be channeled into helping the next generation and charitable causes.
Business and Property Tax
Consistent with our general decentralising policy, we believe that local authorities should have the ability to borrow to invest to make them more accountable, innovative and responsive to local needs. On this principle, local authorities are better placed to set business rates appropriate to location and local enterprise needs than a centralised valuation office which is too remote, uses a one-size-fits-all square-foot factor, which is rarely reviewed. This will attract investors to regenerate areas given favourable rates, and encourage more voter engagement with their local authority.
It will address the need of the hour to regenerate the flagging High Street in many towns and cities and to compete with online retailers and consider local enterprise rates.
It is time to consider whether business rates or a local authority tax based on profits rather than on location and space is more equitable and more likely to regenerate the High Street and other communities. We need to reduce bureaucracy and duplication in revenue collection.
VAT and Sales Tax
Value Added Tax (VAT) of 20% acts as a disincentive to small business activity, and it is selective regarding goods and industry sectors. Brexit gives the government opportunity to review VAT which disproportionately affects the poor by an arbitrary “added value” on selected goods and services. VAT should be graded and reduced to 5% and finally abolished, unless it can be proven that there is a good reason for this tax. If it must be retained, the bureaucracy associated with its collection can be redirected to establishing a fairer system with higher thresholds – such as beginning at £100-£130,000 turnover. Sales Tax should also be reviewed.
See the section on the Environment.
Marriage Tax Allowance
Marriage is a public good with clear public policy benefits both in terms of adult and child wellbeing. The Christian Party is committed to a tax and benefits system which encourages and supports biblical marriage. All couples with young children, regardless of income, should benefit.
The full personal income tax allowance should be transferable to allow mothers to stay at home to care for their children, without social pressure to leave the home to work or receive penalties for not doing so.
Our proposal will help towards the goal of every family reaching a tax-free living income of £26,000 per annum.
Tax avoidance and evasion
Our current complex and avaricious tax system encourages tax avoidance. We support simplified tax regimes, fair tax on business, and encourage both business and entrepreneurs to develop creative tax-offsetting schemes for the wellbeing of the community. We believe that this will change the climate in taxation to encourage those who avoid tax into investing in Britain instead of giving custom to lower-rate tax havens.
In June 2013, world leaders at the G8 summit in Northern Ireland drew up an agreement to tackle tax avoidance and evasion. It is estimated that over £4 billion is lost to the UK Treasury from avoidance schemes. Switzerland is thought to have attracted more than £1.3 trillion in offshore deposits. After years of negotiation, the Swiss government has agreed to support a variety of global schemes promoting more transparency about its clients and banking activities, in a bid to help authorities identify avoidance. We encourage the Government’s cracking down on companies and individuals avoiding and evading tax, but we believe that we need to work with business and philanthropists to use their skills to our mutual benefit.
• Simplify Income Tax banding
• Increase the tax-free threshold to £13,000 per annum for individuals, and £26,000 per annum for married couples
• Introduce a Corporation Tax threshold and a turnover tax for larger corporations
• Allow 100 per cent tax allowance for investment in plant and equipment in the year of purchase
• Review the concept of VAT and its rates
• Review Capital Gains Tax thresholds
• Abolish Inheritance Tax
• Reduce the size of the Inland Revenue Service