The Commons Public Accounts Committee chaired by Margaret Hodge MP has published a report drawing attention to the use of reliefs in the tax system as a tool of government policy. The report slammed the tax authorities as:
unable to cope with the demands of an increasingly complex tax system, including tax reliefs. Tax revenues as a proportion of GDP remain stable over time but the tax code becomes more complex year on year. In March 2011, the Office of Tax Simplification reviewed 155 reliefs, and recommended that 47 should be abolished. While this led to the removal of 43 of these reliefs, a further 134 new reliefs have been introduced since 2011. Each new relief complicates the tax system, and increases the length and complexity of British tax law. Continue Reading
West Country local supporters gathered for our latest War on Waste action day on historic Plymouth Hoe next to Smeaton’s Tower lighthouse. Famous Devon sea captain Sir Francis Drake set out from Plymouth to defeat the Spanish Armada and we only thought it appropriate to protest at the encroachment of another bloated vessel—big government—by posing beneath his fine bronze statue on the Hoe. We then headed towards the city’s council building and handed out our War on Waste booklets in the city centre. Continue Reading
Shocking new research conducted by our team over recent months demonstrates that Britain’s local authorities have long-term liabilities of more than £180bn, saddling future generations with today’s debt burden.
We found that local authorities in the UK had more than £180 billion in long-term liabilities on 31 March 2013, an increase of 8 per cent on the year before. Worryingly, this is almost seven times the amount raised in Council Tax in that year, meaning that those revenues are being used to service debt interest, rather than paying for essential frontline services.
On the positive side, some 214 councils decreased their long-term borrowing between 2012 and 2013, but some 105 councils increased their borrowing. 62 local authorities had long-term liabilities greater than or equal to their long-term assets. This is a real worry; it’s hard to see how those liabilities, often in the form of pensions, are going to be paid without increasing the amount that local authorities borrow. That means more of your council tax being spent on servicing debt interest rather than crucial frontline services.
Unless local councils take a hard look at their finances, and are honest about what they can afford, too many of our children and grandchildren are going to be left with a substantial bill. There is also a desperate need to wage a war on waste; with these huge liabilities to pay, councils can’t continue to fritter taxpayers’ money away. As if we didn’t need reminding, our debt clock offers some sobering numbers on the national debt – it’s terrifying to think that local councils are digging themselves into a £180bn hole as well.
Among the key findings of the research are:
Full data for each local authority across the UK can be found here.
Public finances data released this morning shows continued but slow improvement in the state of government accounts. Net borrowing in 2013-14 was just £107 billion, down from the £107.8 billion estimated in March for Budget 2014, the £111.2 billion in December last year for the Autumn Statement and also the £119.8 billion estimated in March last year for Budget 2013. Continue Reading
Today saw yet another blow for potential homeowners in Britain with news that the Government collected almost £1 billion more from home buyers in Stamp Duty in 2013-14 than it did in the previous year. The total soared by 19 per cent from £4.7 billion to £5.6 billon, according to Lloyds Bank. The average homeowner is therefore set to pay £12,000 in stamp duty over their lifetimes, with this figure skyrocketing in London to £38,000.
The rise is due in part to a combination an overall increase in the number of properties sold as well as the ratchet effect of more homes being dragged into higher bands. The ‘slab rate’ design in particular has been criticised by the TaxPayers’ Alliance amongst others. This means that buyers pay the higher rate on the full value of a transaction, not just the value over a threshold. The Institute for Fiscal Studies has called it ‘a strong contender for the UK’s worst-designed tax’.
London Central Portfolio and Cass Business School estimate that 13,866 people a year are reducing the asking price of their house to get under a threshold.
Much of the help given to buyers under George Osborne’s Help to Buy scheme will simply be taken back through increased Stamp Duty receipts thanks to higher prices. To me, this sounds like yet another seat for administrators on the whimsical carousel of Whitehall bureaucracy, where money is handed out by one administrator only to be taken away again by another.
The long term solution is clear: abolish Stamp Duty entirely. But in the mean time, home buyers desperately need relief now and the Chancellor should follow one of the three options in our 2013 proposals: halve the rates, reform the structure or double the thresholds.
If you haven’t signed up yet, add your voice to the StampOutStampDuty campaign with our quick tool to send a message to your MP. Go to StampOutStampDuty.org