Now it's even easier to get all disgruntled about how much tax you pay
No-one likes paying tax, but most of us accept that it is a necessary part of society. Of course we would all like to pay less of it, but given the current depressing economic outlook, tax cuts are few and far between at the moment. What better way then, to cheer people up than to tell them exactly how much tax they are paying, or a made-up number purporting to be the tax payable, in a handy new app from the happy sorts over at the Taxpayers’ Alliance.
The Tax Buster application for smartphones will not only calculate the net cost of an item after accounting for VAT and any excise duties, but it will also invent a number which may or may not be how much you needed to earn before tax to be able to afford it.
Examples given by the Taxpayers' Alliance include:
filling the car up with £60 of petrol would have only cost £23.86 without indirect taxes and would require £104.84 in pre-tax earnings
a bottle of wine costing £5.99 only costs £2.67 without indirect taxes and requires £10.47 in earnings to pay for it.
a flight to New York that cost £217.00 would have been £157.00 without indirect taxes. Paying the £217.00 required £379.12 in earnings before income and corporate taxes.
20 cigarettes that cost £6.49 would have been £1.24 without indirect taxes and required £11.35 in earnings before income and corporate taxes.
The app aims to "bring greater clarity, and help illustrate the need for more transparent taxes"; TaxPayers' Alliance director Matthew Sinclair said,
"From VAT and excise duties pushing up prices, to income taxes taking a huge share of every penny they earn, to taxes on business that are passed on in wages, taxpayers are paying more than ever for politicians' vain attempts to finance their wasteful spending. The tax buster app will act as a stark reminder of how punishing taxes make it so much harder for families to make ends meet."
However, please remember that these people are trying to depress you. First of all this calculator only works for employees, and takes no account of tax credits or other benefits received which could be said to have the effect of reducing overall marginal tax rates. Not everyone is a basic rate taxpayer, but the calculated income required sums (above) are based on a flat income tax rate at basic rate (20%) and NI at 12%, therefore taking no account of personal allowances or non-chargeable sums.
Furthermore, in order to make the picture look as bleak as humanly possible, the income required figure not only includes this standardised tax and NI measure, but it also includes employers’ NI and corporation tax that you don’t actually pay. Their argument is that your employer, who is naturally assumed to be a limited company, would, in the absence of these taxes, increase your pay by a sum equal to the exact sum paid out.
If you are still interested, the app can be downloaded from the iStore or can be used online at http://tpataxbuster.co.uk/