Whut?

It’s not a revolution then. Nor does it justify opposition claims that the wealthy will be leaving Scotland soon: people’s real behaviour is not nearly as sad or tax motivated as most right wing politicians think. Research in the USA proves that. But this is, none the less, deeply significant. There will now be a tax border between the rest of the UK and Scotland. There will be issues of Scottish residence to address, and dual residence to resolve. How employers run dual payrolls will have to be on the agenda: notice of coding will not forever address the differences in allowances, and cannot do so if rate changes do follow.

And the whole issue of how macro-economic stability for the pound is achieved when tax systems vary is now an issue requiring discussion because no one knows the long term answer to that, and we will need to do so.

Macroeconomic stability of the pound is affected by variances in tax rates? State income tax rates affect the stability of the dollar? Different levels of business rates in the old days affected the pound?

Whut?

20 comments on “Whut?

  1. “people’s real behaviour is not nearly as sad or tax motivated as most right wing politicians think.”

    This from a sad guy obsessed with tax.

  2. Dual payrolls… Eh? Surely you pay the tax in the country of employment. The rest is up to the taxpayer to sort out.

  3. Classic Murphatollah. Pompously point to some small development, and then suggest portentously that the consequences could be calamitous. Candidly.

  4. “people’s real behaviour is not nearly as sad or tax motivated as most right wing politicians think.”

    That’s a weird comment from someone who advocates using tax as a instrument of social policy…….

    If I wasn’t banned from his site I’d ask him about that.

  5. Research in the US proves nothing of the sort, if it even exists. A friend lives in Portland and has a house in Washington state (50 miles away) precisely for tax reasons.

    I hardly think he is the only one.

  6. “Dual payrolls… Eh? Surely you pay the tax in the country of employment. The rest is up to the taxpayer to sort out.”

    Quite. Either you have taxation at source, or not.

    1. Taxed at source.
    This happens at local rates. The tax treaty governs how each country deals with this when the taxpayer fills out a tax return in their country of residence.

    2. No taxation at source (unlikely for Scotland)
    Taxpayer fills out a tax return in his country of residence.

    Simples.

    It’s not like we’ve got zillions of examples of how various countries deal with cross-border commuting issues now, is it?

    Why does the spud, in his infinite wisdom, have to re-invent the wheel and make it 98x more complicated than it needs to be?

  7. @abacab “Why does the spud, in his infinite wisdom, have to re-invent the wheel”

    re-invent? I thought he invented it.

  8. “Dual payrolls… Eh? Surely you pay the tax in the country of employment. The rest is up to the taxpayer to sort out.”

    Depends if the country of employment is based on where the head office us, or where the employee is. If the latter then any multi-site business will have to deal with this.

    HMRC much prefer to sort everything out through the PAYE system. They won’t want to push more people into needing tax returns.

    In past years I’d have known how all this is supposed to work, but I’m out of the UK so I’m not so fussed. Based on previous experience I bet it’ll cause a bunch of hassle that the people implementing don’t care about because it’s companies that will bear the burden.

  9. “HMRC much prefer to sort everything out through the PAYE system. They won’t want to push more people into needing tax returns.”

    How does HMRC deal with people working in ROI and living in Norn Iron, or vice-versa?

  10. “How does HMRC deal with people working in ROI and living in Norn Iron, or vice-versa?”

    Dunno. But you have entirely separate tax authorities there, so I’m not sure there’s any option but to get individuals to sort their business out.

    The issue with Scotland isn’t people who cross the border, it’s companies with operations on bo sides. In Ireland they’d be registered separately with each authority (proper multi-national stuff) but it won’t work like that for Scotland. It should all be easy to accommodate, but the structure has never been needed and my confidence in it having been thought through is low.

  11. @abacab

    Yes, where I worked in NJ, lots of people lived across the border in Pennsylvania, even though they faced a 50 mile commute. They all did it for tax reasons. It doesn’t seem to happen in Europe so much, maybe language is more of a barrier?

  12. “Yes, where I worked in NJ, lots of people lived across the border in Pennsylvania, even though they faced a 50 mile commute. They all did it for tax reasons. It doesn’t seem to happen in Europe so much, maybe language is more of a barrier?”

    Massive cultural issues – almost nobody is going to move country to work in their home country. Too much faff, hassle, and so on. I’m sure some do it, but it’s so rare as to be remarkable.

    Plus, depending on the country, you might not even be allowed to do it – e.g. the Swiss won’t allow you to move to CH to work in France or Germany, afaik, and the cost of living differential is greater than the potential tax saving anyway.

    Plenty of French live in France and work in CH, likewise Germans and Italians. Massive benefits for doing so, in fact.

  13. Of course Mr Murphy didn’t invent the wheel – it works. He invented the square wheel which, I think you’ll agree, readily tesselates and is therefore much easier to store and transport. Reduced performance is a worthwhile price for this. It favours the producer over the consumer which is the antithesis of discredited neoliberal economic thought.

  14. @Chris Miller
    “It doesn’t seem to happen in Europe so much, maybe language is more of a barrier?”

    It happens around the corner of Luxembourg abutting Belgium and France and along the French-German border. Can’t remember how it works but I seem to remember a lot of Alsatian plumbers contracting on the other side of the Rhine.

  15. @Geoff Taylor

    I dispute your claim of reduced performance. Candidly, you have completely misunderstood the point of the square wheel’s rotational utility, which is precisely designed to produce a non-smooth ride. That you cannot see this – or, more likely, wilfully ignore it – exposes you as a neoliberal troll (‘Geoff Taylor’ indeed!). If you have nothing sensible to add may I suggest you sit and read? You might learn something.

  16. We had an Alsatian plumber once. Ate all his sandwiches the moment he arrived and kept demanding we throw his wrench for him.

Leave a Reply

Name and email are required. Your email address will not be published.