So the Government has scored 47% in its interim performance test, based on its first three months in office. Who needs Alan Budd and the Office for Budget Responsibility when you have the kind of independent rigorous analysis kindly provided free of charge by the Taxpayers’ Alliance.

As an ordinary taxpayer I should probably take their analysis more seriously, though I shudder to think that anyone in the Government does. Read more »

   Filed under: Public spending, Tax | 7 Comments »

If you live or work in London you may have noticed the front page headline in Monday’s Evening Standard:

David Miliband’s tax blow to 34,000 homes in London

Read more »

   Filed under: Tax, Welfare | 1 Comment »

I was struck by two items in the news that happened to appear on the same day. In the UK, Eric Pickles, the Secretary of State for local government, has announced plans to give the public the power to veto Council Tax increases. From 2012, MPs will decide each year on a maximum increase local authorities will be allowed to introduce, and increases over that limit will be subject to a referendum and a ‘shadow budget’ the Council would also have to produce. If the electorate voted against the Council’s budget, there would be a refund or a credit against next year’s Council Tax. (There will be no right to a referendum on cuts in services.)

On the same day I saw a report on California’s budget crisis, with Governor Arnold Schwarzenegger declaring a “fiscal state of emergency.” Read more »

   Filed under: Financial crisis, Public services, Public spending, Tax | 2 Comments »

The Chancellor announced a levy on banks’ balance sheets “to ensure our banks make a fair contribution to reflect the risks they pose.”

But the cut in corporation tax from 28% to 24% by 2014 is expected to negate the impact of the levy on bank profitability. Banks could be better off as a result of as a result of tax changes announced in the Budget.

Headlined as raising £2 billion, in fact the levy is set at the low rate of 0.04% initially, rising to 0.07%. In truth, the levy on balance sheets will not reach £2 billion until 2012. Read more »

   Filed under: Budget, Financial crisis, Tax | 1 Comment »

The ITUC World Congress has seen universal trade union support for the idea of financial transaction taxes. So it was good news that IMF head Dominique Strauss-Kahn confirmed that despite the IMF backing an alternative, no decisions had yet been made.

IMF head Dominique Strauss-Kahn addressed the World Congress in Vancouver this week and spoke of the global trade union movement’s support for a financial transactions tax (FTT). Noting that the IMF had expressed its preference for a different kind of financial activities tax based on profit and compensation, he agreed with the ITUC that a substantial contribution from the financial sector is justified to pay for the cost of the crisis and to dampen overly risky behaviour in the financial sector. He stated that the specific choice between the FTT and another type of tax is “a technical discussion” that needed to take place.

   Filed under: Financial crisis, Tax, Transactions tax | Comments Off

Ministers are shortly to announce the terms of their review of the 2012 pensions settlement. I am one of the consumer representatives who have signed a letter to ministers warning that this could seriously damage a hard-won consensus for change. Read more »

   Filed under: Budget, Pensions, Tax | 2 Comments »

The unfairness of the budget is shown in microcosm in the proposed changes to corporation tax. Over the next four years the top rate of corporation tax in the country will be reduced from 28% to 24%, only paid for in part by a small reduction in the investment allowances large businesses (in particular) enjoy. Small companies will, at the same time, see a fall in their corporation tax rate from 21% to 20%.

However, all is not as it seems. In the TUC publication The Missing Billions published in 2008 we showed that the effective rate of corporation tax paid by large businesses in the UK was no more than 22%. Subsequent data from HM Revenue & Customs published on their own web site has confirmed this estimate as generous – they show an average rate of 21% and that some large companies pay much less. Read more »

   Filed under: Budget, Tax | 1 Comment »

I’ve no idea, but here are some men that do.

This analysis by Howard Reed and Tim Horton on Left Foot Forward nails the progressive claim.

   Filed under: Budget, Economics, Tax | 1 Comment »

Hidden in the small print of the Budget press notices is the following announcement:

As part of an approach to develop sustainable responses to avoidance risk, the Government intends to examine whether the option of a General Anti-Avoidance Rule should form one element of strengthened defences. This will be part of wider work on improvements to the tax policy-making process.

There had to be some good news in amongst the gloom today. This is just a small sliver of it. Undoubtedly in the notice to appease the Lib Dem coalition partners such a measure is something the TUC has long argued for – and which is is credited with having promoted in recent years – even inside HM Treasury. Read more »

   Filed under: Budget, Tax | 1 Comment »

The budget proved a mixed bag for the English regions. The TUC welcomes the government’s commitment  to fund key transport projects in Manchester, the North East and Birmingham as well as the upgrade of the rail link between Liverpool and Leeds. Likewise the announcement of a ‘Regional Growth Fund’ is welcome – though the extent to which this fund will counter-balance the significant reductions in business support seen through the short term cuts to RDA funding and key infrastructure spending in the regions remains to be seen.  Read more »

   Filed under: Budget, Regional policy, Tax | 2 Comments »

The Budget increased Value Added Tax, which will hit the poorest hardest, and gave no promises about protecting the poorest families from the effects of this change. Read more »

   Filed under: Budget, Tax | 1 Comment »

The Chancellor claimed that his budget was ‘progressive’, which would probably be a surprise to those who might justifiably expect to benefit from any usual definition of progressive measures. He also claimed it would boost the prospects for economic growth. How do the corporation tax cuts fare  judged by these claims?

The headline policy on corporation tax is the reduction of the main rate from 28% to 24% over the next four years. The Budget does not claim that this will have any impact on growth, but does boast that it ‘will give the UK the lowest rate of corporation tax in the G7’. Is this really a top priority at a time when the Government is trying to save billions of pounds and is cutting the benefits paid to protect the health of pregnant women? Read more »

   Filed under: Budget, Tax | 1 Comment »