Adam Smith Institute

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Making taxes more app-arent

apppHow much tax do you pay to get the money to buy everyday goods and services? The answer might surprise you. When you buy something at the shop, HMRC take away Value Added Tax and then some more for things like petrol, tobacco and alcohol through special duties. But even before you have the money to buy what you need, you first have to earn it and here too the Government takes another cut. Fortunately, the TaxPayers' Alliance has released 'Tax Buster', a great little smartphone app today that does all the calculations for you.

One of the biggest problems with the tax system is the amount of effort you need to invest just to understand exactly what we pay in which taxes. So a tool that shows, for any product you buy, how much extra you'd have to earn to pay for the Income Tax and National Insurance, and takes into account the effect employers' National Insurance and Corporation Tax have on driving down earnings. Forget the 20% 'basic rate' of tax. On most ordinary goods and services, typical taxpayers with average incomes pay over 50% tax. On tobacco, alcohol and fuel, the percentages are higher still. Play around with the app yourself. It certainly provides half an hour of compulsive (if rather depressing) fiddling as you enter the details of the various products you've bought recently and Tweet and Facebook the results to your friends.

Tax Buster is available from the App Store for iPhone users while other smartphones can use the online webapp version. For more information, visit the app's website at www.tpaTaxBuster.co.uk.

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