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Millions to receive tax spend summary | |
(35 minutes later) | |
Millions of taxpayers will this week start to receive a breakdown of exactly how their tax has been spent by the government. | Millions of taxpayers will this week start to receive a breakdown of exactly how their tax has been spent by the government. |
Twenty-four million people will receive their Annual Tax Summary in what the government is calling "a revolution in transparency". | Twenty-four million people will receive their Annual Tax Summary in what the government is calling "a revolution in transparency". |
The Chancellor, George Osborne, first announced the plans in his 2012 Budget. | The Chancellor, George Osborne, first announced the plans in his 2012 Budget. |
But the TUC dismissed the summaries as "party political propaganda masquerading as neutral information". | But the TUC dismissed the summaries as "party political propaganda masquerading as neutral information". |
'Promise' | 'Promise' |
The summaries will set out how much tax and National Insurance each person has paid, together with a breakdown of where it was spent - for example welfare, transport, health and education. | The summaries will set out how much tax and National Insurance each person has paid, together with a breakdown of where it was spent - for example welfare, transport, health and education. |
"It's about people getting information," Mr Osborne told the BBC. | "It's about people getting information," Mr Osborne told the BBC. |
"This is about people knowing where their money is going and how much tax they're paying. | "This is about people knowing where their money is going and how much tax they're paying. |
"I think it is going to help as a country the debate we have about living within our means." | "I think it is going to help as a country the debate we have about living within our means." |
The shadow exchequer secretary to the Treasury, Shabana Mahmood, criticised the government's tax policy and said: "Families and pensioners are paying more in higher VAT, but that tax isn't part of these statements." | The shadow exchequer secretary to the Treasury, Shabana Mahmood, criticised the government's tax policy and said: "Families and pensioners are paying more in higher VAT, but that tax isn't part of these statements." |
Over the last ten years, the government has shifted more of the tax burden to indirect taxes, like VAT or alcohol duty. | |
According to Bloomsbury Professional, an accountancy firm, while direct taxes have increased by 38% over that period, indirect taxes have risen by 49%. | |
Example of the Annual Tax Summary breakdown | Example of the Annual Tax Summary breakdown |
Analysis | Analysis |
By Joe Lynam, BBC News Business Correspondent | By Joe Lynam, BBC News Business Correspondent |
No other European country gives its taxpayers such a breakdown of how their taxes are being spent. | No other European country gives its taxpayers such a breakdown of how their taxes are being spent. |
Australia is the only developed economy that already does so. This chancellor, with his highly-tuned political antennae, will be fully aware of the impact of such statements. He knows that some income taxpayers will resent that a quarter of their taxes go on welfare payments. | Australia is the only developed economy that already does so. This chancellor, with his highly-tuned political antennae, will be fully aware of the impact of such statements. He knows that some income taxpayers will resent that a quarter of their taxes go on welfare payments. |
He acknowledges it will provoke a debate and one that might benefit his party, which aims to cut welfare spending even further if re-elected in May. Of course the tax summaries do not break down the welfare payments into their constituent parts such as unemployment, child benefit, winter fuel allowance, in-work tax credit etc. | He acknowledges it will provoke a debate and one that might benefit his party, which aims to cut welfare spending even further if re-elected in May. Of course the tax summaries do not break down the welfare payments into their constituent parts such as unemployment, child benefit, winter fuel allowance, in-work tax credit etc. |
Critics will say that is a deliberate omission. | Critics will say that is a deliberate omission. |
One further notable element is the single smallest element of your tax bill is Britain's contribution to the EU budget at 0.7%. | One further notable element is the single smallest element of your tax bill is Britain's contribution to the EU budget at 0.7%. |
There are almost 30 million taxpayers in the UK, and those who do not receive a summary can use HM Revenue & Custom's tax calculator to get similar information, the Treasury said. | There are almost 30 million taxpayers in the UK, and those who do not receive a summary can use HM Revenue & Custom's tax calculator to get similar information, the Treasury said. |
However, the TUC questioned the government's motives in sending out the summaries. | However, the TUC questioned the government's motives in sending out the summaries. |
"The chancellor is relying on the fact that many people think spending called welfare all goes to the unemployed," said the union's general secretary, Frances O'Grady. | "The chancellor is relying on the fact that many people think spending called welfare all goes to the unemployed," said the union's general secretary, Frances O'Grady. |
This included tax credits to help low paid workers, child benefit and help for pensioners, she said. | This included tax credits to help low paid workers, child benefit and help for pensioners, she said. |
"This is softening us up to a major cut to the welfare state safety net to which we all should contribute so that it is there if we need it." | "This is softening us up to a major cut to the welfare state safety net to which we all should contribute so that it is there if we need it." |