Despite 119 historic or impending cuts in taxation, 254 tax rises have come into effect, with 45 more planned before the next election, with the result, according to the Alliance that the amount of tax paid in Britain will rise in real terms by 15 per cent by the end of the Government’s tenure.
The Taxpayers’ Alliance (TPA) forensic study of Treasury and HMRC documents looks at how many different tax reliefs, allowances and rates the Government has changed, along with the number of new taxes that have been levied or abolished during its time in office.
In 2009-10, the last year of the previous Government, £513 billion was paid in taxes, which amounts to £549 billion at 2012-13 prices, while by 2015-16, the Government plans to increase that amount to £671 billion or £633 billion in today’s money.
Meanwhile, through other research, the TPA has found that the average family pays £656,000 in tax over their lifetime in direct and indirect tax both over their working lifetimes and in retirement.
Based on the current level of taxes applying over a working lifetime of 40 years and 15 years of retirement the TPA has calculated the total taxes paid by households broken down by income.
This amounts to £1.3m in the highest income quintile, falling to £235,000 in the lowest income bracket. The research also revealed that the four most burdensome individual taxes over a lifetime are Income Tax, VAT, employee National Insurance contributions and Council Tax.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 749 )Speaking at the World Economic Forum in Davos over the weekend, incoming Governor of the Bank of England, Mark Carney, said he will be putting growth at the heart of his approach to the job and is willing to see higher inflation for longer in order to support the economy.
Mr Carney hinted strongly at a new approach during his speech, when he said that central bankers should be prepared to take aggressive measures to help economies achieve what he called an "escape velocity".
He added that these include the use of unconventional measures and he would suggest keeping interest rates lower for longer while considering further quantitative easing, which is the indirect provision of monetary stimulus via the financial system.
Although he was speaking generally rather than specifically about the UK, Mr Carney's comments will be seen as evidence that he is preparing a substantial change of direction when he takes up his new post this summer.
While suggesting that he might act quickly, perhaps with a pledge to hold interest rates low for a prolonged period, he said: "Monetary policy can be more nimble than fiscal policy."
Meanwhile, the atmosphere at Davos on the final day was guardedly optimistic, as the collapse of the Euro now looks much less likely, while a hard landing in China, or debt crisis in the US, also look more distant.
The optimism has translated to the stock markets especially in the US, with the S&P 500 closing above 1,500 points on Friday for the first time since 2007,and the FT's "all-world" index is the highest it has been in 20 months.
There was also that good news from the European Central Bank this week, as it announced that a large proportion of the emergency lending it had offered to European banks just over a year ago was being repaid early.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 614 )Figures from the Office for National Statistics (ONS) show today that the UK economy shrank by 0.3 per cent in the last three months of 2012, fuelling fears that the economy could re-enter recession.
According to the ONS the fall in output was largely due to a drop in mining and quarrying, after maintenance delays at the UK's largest North Sea oil field; with the sector’s output falling by 10.2 per cent, the biggest decline since records began in 1997.
If oil and gas extraction were excluded from the overall gross domestic product (GDP) calculations, then the data would have shown that the economy shrank by only 0.1 per cent in the fourth quarter.
The figures were worse than expected and could put pressure on the government to consider a "Plan B" that would stimulate demand, although the Chancellor has insisted as recently as yesterday (January 24th) that he will not reconsider his austerity measures programme.
However, the prospect of a triple-dip recession, which will become official should the economy contract again in the first quarter of 2013, is expected to further dent the confidence of consumers and companies, hitting high street spending and business investment.
The contraction in GDP in the last three months of 2012 followed a near 1 per cent rise in GDP in the third quarter when the economy had been boosted by the London Olympics.
The economy remains 3.5 per cent below its peak in 2007 and is not expected to regain its previous level for at least another two years, making it the longest recovery in 100 years while in the words of the ONS, the underlying picture was flat over 2012, with the economy working well below its potential.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 603 )According to official data from the Office for National Statistics published yesterday (January 23rd), the level of unemployment in the UK has fallen to 2.49 million, its lowest level for 18 months.
In addition, the number of people in work has reached another record high, climbing to 29.7 million, giving an employment rate of 71 per cent, which is the highest since records began in 1971.
The figures reveal that the unemployment rate fell to 7.7 per cent in the three months to November, down from 7.8 per cent in the previous quarter, while the number of people employed full time rose by 113,000, offsetting a fall in part-time employment of 23,000 and the number claiming Jobseeker's Allowance fell to 1.56 million in December, which is the lowest since June 2011.
The fall in unemployment was the 10th consecutive drop in numbers and was echoed by the number of people classed as economically inactive, such as those no longer looking for a job, which fell by 13,000 to just over nine million.
However, the data also showed a 26,000 increase in the number of women out of work for up to six months, to reach 571,000, which may reflect changes to the benefits system resulting in more single mothers looking for work.
In addition, the number of unemployed 16 to 24-year-olds fell 90,000 to 625,000, excluding people in full-time education.
Employment Minister Mark Hoban pointed out that the UK employment rate was growing at almost double the rate of the US, and faster than any other G7 country.
He said that the positive figures show employment rising for 15 months despite difficult economic circumstances, but stressed that the Government is not complacent and will continue to give jobseekers the support and training they need to achieve their goal of returning to work.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 571 )Despite the recent cut in corporation tax, in real terms, companies in the UK have faced tax rises of 19 per cent in recent years, as various other taxes on business, including VAT and property rates, have risen by 58 per cent since 2005.
In a survey of finance directors of both UK-based private firms and multinationals, the consensus was that businesses are being hit by other levies, even though the Government appears to want to make the UK an attractive place to be based. In fact, corporation tax is now only one of 24 business taxes levied by the UK.
In addition, the finance directors polled showed an “overwhelming consensus on the need for simplicity and certainty in the UK tax system.” They accepted that efforts had been made to benefit business and improve the UK’s competitiveness, including the reduction of corporation tax from 28 percent in 2010 to 21 percent in 2014, but called for a moratorium on further changes to the tax system now that the Government’s corporate tax reform programme has been delivered.
However, according to a Reuters' analysis of official data published late last year, large companies in the UK now pay less tax than they did twelve years ago and have been a lot more profitable.
This indicates to tax campaigners that tax avoidance has increased under a more business-friendly strategy at HM Revenue & Customs (HMRC), which the department refutes.
Instead, HMRC cites recent economic weakness and the lower corporation tax rate for the reduction. A spokesperson for the department also said that the downward trend may also have been emphasised by a shift in the way taxes were paid from 1999 which led to "elements of double counting" in 2000/01 and 2001/02.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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