Here's how to avoid thousands in tax If more people move when rates are lower, that means the cost to the Exchequer of cutting the tax will be less than the Treasury thinks. An increase in the number of transactions will make up for taxing each transaction less. And more transactions does not just mean more stamp duty, but more income tax and VAT too. When you move, you normally spend a lot of money on everything from solicitors" fees and surveys to new furniture and redecorating. If politicians are interested in cutting stamp duty, they could get rid of the ludicrous rule whereby you pay the highest rate for which your house qualifies on its entire value. So, at the moment, a property selling for £250,000 incurs £2,500 in stamp duty, but that rises to £7,500 for a property at £250,001, for example. That is unfair and inefficient. No one wants to buy a house at just over the threshold. If you buy a home for just under £250,000, you can end up stuck in the place until its value increases very substantially, probably until it is worth closer to £300,000. It would make a lot more sense if stamp duty were more like income tax: nothing until the 1 per cent threshold; then 1 per cent of the value up to the 3 per cent threshold; and so on. Alternatively, the Government could take a simpler route and halve all of the rates. That, in simple, static terms, would mean the Treasury got half as much revenue. But then a lot more people would move if buying a £300,000 flat meant £4,500 instead of £9,000 in stamp duty. For some new research published today, Walbrook Economics looked at the numbers and found that you would need 350,000 extra transactions a year for the Exchequer to break even. They expect there would be enough extra transactions to reduce the cost to around £900 million, or less than 0.2 per cent of the Government's annual revenue. Other cuts in stamp duty might even break even. If politicians want to minimise tax avoidance, they should put in place a simpler and fairer tax system, which the authorities have a decent chance of enforcing. But that is only part of the story. They also need to set reasonable rates. Stamp duty is only an extreme example, because, for many people, avoiding it is really easy: stay put unless you absolutely have to move. But there is a broader lesson too: if you make paying tax more expensive, you should expect more people to avoid paying tax. Matthew Sinclair is the chief executive of the Taxpayers" Alliance