WITH the self-assessment income tax deadline for online returns looming large on January 31, the minds of those to whom this applies become concentrated. However, income taxes affect most of us and it is a subject in which a lot of misinformation is regularly bandied about.

Top of the list are the terms tax avoidance and tax evasion, each having a different meaning, one practice legal, the other illegal. What surprises me is that even those who should know better are often among the confused, including politicians, news presenters and journalists. So, how can we possibly get much-needed tax reform if we don’t even sufficiently understand the language?

Income tax avoidance is legal and involves the use of existing accounting laws to lower the amount of tax one pays. Tax evasion is illegal and involves using methods in breach of tax laws to reduce the amount of tax one pays, such as under-reporting the amount of one’s income as an example. It is rather unfair in most cases to demonise taxpayers in the former group for simply trying to legally pay as little as possible in taxes. However, if we believe many of these accounting laws enabling tax avoidance are inappropriate, we should get our Members of Parliament to fight to change them. Count me in.

Yes, I certainly support tax reform, as our tax system is among the most complicated in the world. One source I referred to recently indicated that the British Tax Code now consists in excess of 17,000 pages within many volumes. There are regular commitments by successive governments to simplify the system, but it never seems to happen. The accounting industry benefits hugely by a structure which requires their expertise, but I do not believe the present structure benefits the vast majority of people.

For the good of the many, why not consider doing away with our present Tax Code in its entirely, and replace it with a flat income tax system, one that would carry a single percentage to apply to everyone, and one which does not allow many if any exclusions?

In order to be fair to those living on low incomes, this group could be protected by adopting an income threshold considerably higher than the present one, thereby freeing them from any income tax obligation whatsoever. At the other end of the scale, high earners would be required to pay their full share, as there would be no allowances and loopholes that presently exist which enable them to reduce their liabilities significantly.

As for those of us in the middle, most likely there would be little change other than simplifying our lives and removing the dread of income tax filing deadlines, although there is certainly nothing trivial about that.

I know well that this is a highly emotive subject and can imagine some of you reaching for your pen to write a damning letter in reply. The way I see it is that the current system is incredibly cumbersome and complicated, expensive for government to oversee, and is riddled with contradictions and inequities. Not fit for purpose is the term that seems to come to mind.

Thus, it is more than time for a comprehensive re-think, and the flat tax approach is only one of many alternatives, so go ahead and put forth your own suggestions that you may be keeping to yourselves. Believe me, I’m listening, along with a good many of your fellow readers I am sure.

Ira Fishman