Free & Affordable Tax Help: Expert Support for Less
If you feel like the ducks above when your tax return comes round, don’t worry. There is a lot of affordable help for you out there, if you can’t afford a personal tax consultant. One of the best ways to get tax help without spending a penny is through free tax preparation services.
TaxAid offers a free helpline if you are on a low income (less than £20,000 a year), to ensure you are paying the right amount of tax. Just call during office hours on weekdays. There is also a helpline for voluntary advisors, to get help for clients.
Tax Help for Older People also offers free help, this time for people over 60 on incomes of less than £20,000 a year. It has over 420 volunteers and a national call centre, and can also help you to pay less tax, if you are on a pension. You can call them, or use their web enquiry form.
Contact the government website to check your tax code.
Low-cost paid services
If you don’t qualify for free help, Tax Scouts offers affordable low-cost help for tax returns. It offers three services (depending on type of company – dormant, active or VAT-registered).
And you are then directed to one of their accredited accountants, to file your tax return to HMRC in 48 hours. You can also use their fixed fee service to sort out tax problems. The site also offers free simple book-keeping tools.
Online filing software (what’s worth it)
Online filing tools can be brilliant for straightforward returns, because they prompt you in order and do the maths for you. Choose software that matches your situation, explains pricing in plain terms, uses secure login, and has strong independent reviews.
England’s tax system is too complicated
Doing tax returns is very complicated, so much so that people even have to hire bookkeepers or accountants to fill everything in for them. This vegan accountancy firm has a lovely suite of pages of plain-English help.
England seems to have mastered the art of the most complicated tax system in the world:
- Income Tax
- VAT (valued added tax) – different for hot and cold food, and clothes for children and adults
- National Insurance (looks like a tax)
- Capital Gains Tax
- Inheritance Tax
- Council Tax
- Stamp Duty
One wonders if this is an example of what the later writer David Graeber called out – making things complicated in order to create ‘bullshit jobs’ that are not really needed. But skews job figures, and gives work to friends and colleagues.
Most people can spend hours to file a single return, when they could be spending that time running or improving a business. Other people fear earning above a certain amount, fear making mistakes or put off tasks, thinking the wrong information could lead to penalties and fines.
Tax changes means we all have to start learning all over again, and this in turn can affect whether people employ staff. People may miss out on claiming benefits due to tax laws, and carers also often don’t realise they are entitled to financial help, even if they work part-time. A café owner spends evenings on VAT, rather than menus and suppliers.
The obvious solution is rip up the rule book, and start again. Merging income tax bands and combining different taxes, would be a lot easier. Abroad, some countries use a flat tax, where everyone pays the same rate. It’s popular, simple and avoids tax dodging.
Estonia (a country with beautiful forests) pays a flat rate tax of 20%, and is a highly-developed country and enjoys the world’s 12th best standard of living (safe, good public transport, low pollution and excellent healthcare and broadband). The cost of living is also lower than most western European countries.
Should rich people be taxed more?
England’s tax laws are so complicated, that help is often needed. Some are in favour of a flat tax (used in Estonia at a rate of 20%, which seems to work as the country has an excellent standard of living, and a good economy).
In England, it’s a barmy country where people (and publicans) have to pay a huge beer tax (which makes it difficult for independent pubs to survive).
Yet Tax Justice writes that both King Charles IIII and his son Prince William don’t have to pay corporation tax on their Duchies of Cornwall or Lancaster, which bring them billions of pounds in income (the Prince pays voluntary income tax, but why is not compulsory?)
The argument given by monarchists is always that the tourism income outweighs what the government pays it (one of the highest percentages of any monarchy worldwide). But the figures don’t add up.
Because the Duchy of Cornwall (owned by Prince William) and the Duchy of Lancaster (owned by King Charles III) both earn billions in income (everything from organic food and properties to renting out land for NHS ambulances).
The Duchy of Cornwall is vast (even including the Scilly Isles and the Oval Cricket Ground). It also includes most of Dartmoor National Park (environmental campaigners have asked for more than the ‘small potatoes’ offering for rewilding), despite the land being owned by one of the richest families on earth.
So when you figure in this vast amount of combined income, you can understand why (when we have so many financial problems), campaigners want both Duchies to pay corporation tax. They don’t, simply due to an archaic rule that these estates were for providing private income to the Monarch and heir.
And unlike the rest of us that have to make a simple legally-binding Will which is then subject to inheritance tax, the Monarchy doesn’t pay that either.
How tax evasion harms England
The media and politicians are always on about benefit cheats. But in fact, many vulnerable people should claim benefits, and there is far more money ‘lost in the system’ from tax evasion. Big companies often employ tax companies and lawyers to get out of paying tax (so for instance, benefit from the NHS but contribute nothing towards it).
But when high earners (including companies) move their income or assets into low tax zones (or tax havens like Monaco), home countries have less income. The Tax Justice Network estimates governments lose hundreds of billions each year to tax evasion worldwide.
Do countries with higher taxes fare better?
Finnish grizzly bear! (Melanie Mikecz)
One mystifying concept in British politics is why both sides of the major parties are absolutely obsessed with tax. The Conservatives want everyone to pay less, Labour want rich people to pay more. Tax, tax, tax. It’s all they ever talk about. Jesus paid his taxes, and so should we all, if we want to keep the NHS and invest in public services. But neither side’s policy is really correct. Here’s why.
You can’t have a society where people pay no or little tax if they are rich (as happens with some big corporations, that use clever accountants – so they use our NHS but don’t pay towards it). Trickledown economics (where the rich pay less tax to provide ‘jobs for the great unwashed’) never works, it just makes the rich richer and the poor poorer.
If you feed the horse enough oats, some will pass through the road for the sparrows. John Kenneth Galbraith
But likewise (and here’s the key), if you create a society where richer people pay more tax (or a flat tax), both will only work – if the government is competent! And not being competent leads to a lack of trust.
Most of us if we were millionaires would all happily pay more tax – if we knew for certain that the money was going to be used well. But we all have suspicions that the money would be going on other things, and that’s the reason why people don’t pay more tax, not because of selfishness (as a rule).
Case studies in ‘happy Scandinavia’
In world happiness indexes, nearly all the main countries that come out top are in Scandinavia (Finland, Sweden, Norway etc). And what’s interesting is that in most cases, people trust their governments, even if they didn’t vote for them. You don’t have expense scandals and the like, the leaders just get on with their jobs.
Interestingly, the world’s happiest country of Finland also pays the world’s highest rate of income tax at around 57.3% (time of writing). So why in a freezing cold winter country that’s dark during the day and a country that takes a lot of their money, are people happier than in England?
Because they pay their taxes, which are used to create a cradle to grave protection for everyone. Finland is the first country about to hit ‘zero homelessness’, due to non-profit landlords and good public policies.
There is no monarchy in Finland (it was tried once, but the King was prevented from taking the throne, before he came to power!) The Finnish President’s annual salary is around 160,000 Euros (he also gets to live in a palace!)
Other benefits from paying high taxes in Finland are universal health care, free higher education, and good leave for children and eldercare. When taxes are fair and well-spent, people don’t mind paying them.
As an example, Finnish speeding fines are linked to income. So if a premier footballer in Finland is found breaking the law by driving 200mph in a fast car, he will likely get fined some stupid amount linked to his stupidly high salary.
Most UK footballers who have been caught speeding usually get fines of around £6,000 (in Finland, it’s nearer to £150,000).
Simple fair alternatives to council tax
Council tax is a charge on homes, usually set by how much your property is worth. It pays for services like rubbish collection, police, fire and schools.
But many people say it’s unfair, because often charges are based on the wrong value band (set years ago), which means neighbours in similar homes pay wildly different amounts.
It’s sometimes the case that a millionaire in a swanky mansion pays little more in council tax than someone in a small terraced house.
Council tax benefit is often available for people on single-person households (25% discount), low-income households (including pensioners), people with disabilities and students.
Also check if you qualify for a council tax refund, due to Valuation Band Errors (in some cases, this can lead to refunds of thousands of pounds).
Why Valuation Bands Got Out of Date
Council tax was brought in after the Poll Tax (which caused riots – ask your mum or dad). Council tax set the entire system to property prices from 1991, but many homes have shot up in value since then, but are still banded with cheaper properties.
This can lead to massive unfairness. For instance a London property banded at Band C in 1991 that’s now worth £900,000 would pay around £1,700 council tax a year. Yet a Leeds property banded at Band D in the same year and is now worth £280,000 would pay more (around £2,000 a year).
Then we have different councils, who each may give levels of benefit. And if your income goes down, so may your benefit. And to make things worse, many people have no idea that they are entitled to benefits or possible refunds, due to being wrongly banded years ago.
Simpler and Fairer Council Tax Alternatives
While it’s good to claim benefits and refunds if you are entitled, a much better idea would of course be to get rid of council tax altogether, and replace it with something simpler and fairer.
There are a few ideas touted around, the most popular being:
Annual Proportional Property Tax charges a set percentage of property (current) market value. This is fair, so higher-value homes pay more, and less expensive homes pay less. This idea was created by economist Tim Leunig (who created the furlough scheme during the pandemic). It would also merge with stamp duty, to make one payment.
At present, a Band D home in Blackpool can pay twice as much as a home in the same band in Westminster. And stamp duty is not just complicated, but makes buying homes more expensive.
Council tax and stamp duty are terrible taxes. They are unfair and unpopular. Council tax should be replaced by an annual tax on all houses, and stamp duty with an annual tax only on houses worth £500,000 or more. Tim Leunig
A land value tax taxes the land that property sits on, rather than taxing buildings and land together. This means that you are not charged by how run-down or fancy your house is (so you are not penalised for say giving a derelict house a makeover).
One big advantage of this tax is that it discourages people from buying second homes that sit empty most of the year (this happens in many holiday destinations, which then pushes up property prices, so local people can’t afford to buy their own homes).
With a Land Value Tax, people who buy second homes have to pay to maintain them, empty or not. So you have say less millionaires from London buying ‘surfing homes’ in Cornwall, that are only used for a few weeks a year. With this tax, they would have to keep paying tax on them even when not used, so they would be encouraged either to sell up, or at least rent them out to local people.
And unlike buildings, you can’t hide or undervalue land. So speculators won’t be tempted to sit on empty plots, and wait for prices to rise.
The big advantage is that you can’t hide or undervalue land in the way you can with buildings. This type of tax makes it harder for speculators to sit on empty plots and wait for prices to rise. This also creates nicer communities (as land would not be left empty nor used as car parking spaces, as this would be too expensive). In other words, it’s almost impossible to ‘game the system’.
A local income tax links bills directly to how much people earn (not where they live or what property they own). Councils set the rate (usually between 1% to 5%) and this is simply added to national income tax, to fund local services.
This is good if you lose your job, as you then pay less. And if you earn more, you pay more. And it’s far simpler to collect, as your income (collected through PAYE or self-assessment) is already known.
Some high earners don’t like this choice, as they end up paying more for the same local services. And councils in poorer regions (with higher unemployment) may struggled to raise enough money, unless national government steps in to help.
Community Contribution Tax is where each adult pays a flat amount each year. This is not the same as the old Poll Tax (where a millionaire paid the same as a binman, and led to Margaret Thatcher’s resignation).
This idea reduces fees for people on the lowest income, and lets people volunteer time for credit, in place of cash. Real world examples include:
- Local membership fees for parks, libraries, or resident groups.
- Schemes where those struggling can do one or two days’ volunteering each year (litter picking, helping at community events, or keeping green spaces tidy) instead of paying the full fee.
- Businesses or landlords chipping in a higher amount than individual residents.
This would work, as long as you live in the kind of area where wealthy people are into local investing, and there is a strong community spirit. It can’t raise huge sums like council tax, but does give communities more of a day in how their area is funded and run.
Social Impact Bonds is not really a tax, but offers councils another tool to raise money. Investors put up the money for a local project (say helping rough sleepers or improving parks. If the project meets its goals (measured by agreed results), the council repays the investors, often with a small return.
A good example would be parents funding an after-school programme to tackle youth crime. If crime drops as planned, the council then pays them back, from savings made in police and emergency costs. If not, the investors stand the loss, not the local taxpayers.
This not only can ease short-term strain, but encourages councils to do their job property (if not, the investors will likely not vote for them again).
What Council Tax Alternative Do You Prefer?
Now you have read about all the council tax alternatives, which one do you think would work best? A fairer system based on income and land (and built on trust) is not only simpler to collect, but also builds trust in communities, at a time when councils need lots of money to sort out local problems.
