Category Archives: Tax and spending

UK disability charities say NICs rise will cause ‘life-changing’ cuts

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Groups providing vital services say impact of tax and minimum wage rises will lead to cutbacks

Charities have warned of “life-changing consequences” for a million vulnerable children and adults as a result of cuts to state-funded disability services driven by tax changes and wage rises announced in the budget.

The Voluntary Organisations Disability Group (VODG), which represents 100 charities in England, said Rachel Reeves’s decision to raise employers’ national insurance contributions (NICs) had been “ill thought through” and would put many local charity services at risk.

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Services for most-vulnerable people at risk after NICs rise, charities say

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Care providers, GPs and pharmacists warn increased costs will cause cuts and job losses

Services that support some of England’s most vulnerable people have warned that tax increases in the budget will lead to cuts and closures that could devastate the charity sector.

Although the NHS and councils are protected from the impact of the rise in employers’ national insurance contributions (NICs) announced in Wednesday’s budget, charities that provide services say the increase means they will face “existential” financial pressures.

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Reeves told she will have to raise further £9bn to avoid UK public service cuts

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Warning from comes after Rachel Reeves’s record tax-raising budget sent tremors through financial markets

Rachel Reeves has been warned an extra £9bn of tax rises may be required to avoid a fresh austerity drive in key public services as her record tax-raising budget sent tremors through the financial markets.

Threatening to undermine the chancellor’s claim that her budget would restore economic stability to Britain, government borrowing costs rose sharply in the City on Thursday as traders turned on Reeves’s tax and spending measures.

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Rachel Reeves’s most irritating manifesto fudge: private equity’s tax loophole | Nils Pratley

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Labour said it would bring taxation of performance-related pay in the industry in line with others – but the chancellor had a change of heart

It has been almost two decades since Nicholas Ferguson, a grand figure in the private equity business, caused a storm by talking out loud about his industry’s dirty little secret. It could not be right, he said, that highly remunerated private equity executives could pay less tax than a cleaner or other low-paid workers.

Things have moved on a bit since 2007. So-called “carried interest”, or carry – the portion of an investment profit that the private equity managers retain as a bonus for success – is now taxed at 28% under the capital gains regime; in the old days, rates in effect as low as 10% could be secured thanks to various exceptions.

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Private schools to take legal action against planned VAT on fees

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Independent Schools Council says its focus is on children and it is concerned about impact on specialist schools

The Independent Schools Council (ISC) has said it will launch legal action against the government’s decision to impose VAT on independent school fees.

The council, which represents more than 1,400 private schools in the UK and abroad, reached its decision after a board meeting held on Thursday.

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Reeves’s long-term spending figures almost as unrealistic as Tories’ were, IFS says – UK politics live

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Institute for Fiscal Studies says budget ‘looks like the same silly games’ as seen under the Conservatives

Rachel Reeves is now being interview on ITV’s Good Morning Britain.

She is being interviewed by Ed Balls, the former Labour shadow chancellor who is now a TV presenter. He asks her to confirm that workers will end up losing out because of the employers’ national insurance contributions (NICs) increase.

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Reeves accused of betraying small family firms with inheritance tax rises

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Chancellor also criticised for letting the very rich off the hook with a lower than expected rise in capital gains tax

Tax rises aimed at inherited wealth are at risk of backfiring, after the chancellor was accused of betraying small family businesses while letting private equity bosses off the hook.

Labour’s first budget in 14 years included measures to close inheritance tax (IHT) loopholes and press ahead with scrapping the controversial non-dom tax status, as well as levying higher taxes on private jet flights.

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OBR says budget unlikely to lift economic growth over next five years

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Forecaster says extra spending revealed by Rachel Reeves will give only a short-term lift to economy

Labour has embarked on a “large, sustained increase in spending, tax and borrowing”, according to the government’s economic forecaster, as it judged that Labour’s first budget for 15 years is unlikely to increase economic growth over the next five years.

Assessing Rachel Reeves’s policies, the Office for Budget Responsibility (OBR) said the economy would expand at the same rate as predicted in March by the end of the parliament, despite a £70bn-a-year rise in spending.

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Labour wants to reverse decline – but with a big budget comes a big risk

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The government knows cynical voters will need to see tangible change in public services and to feel better off

At the final political cabinet before Rachel Reeves delivered her first budget this week, ministers were presented with internal party research on what the public was expecting.

In the months since the general election, they had been fed a regular diet of gloomy warnings about the state of the economic inheritance and, more recently, high levels of pre-budget news coverage, so it was firmly on their horizon.

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London’s Aim shrinks to smallest since 2001 amid fears of tax relief changes

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UHY Hacker Young says 92 companies have delisted and only 10 floated on junior stock market in past year

The UK’s Alternative Investment Market (Aim) has shrunk to its smallest size in 23 years as business owners and investors anticipate an abolition of inheritance tax relief in the budget this week.

The accountancy group UHY Hacker Young calculated that 92 companies have delisted from Aim, London’s junior stock market, in the past year, reducing the total number of companies on Aim to 695.

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Reeves: ‘My budget will match greatest economic moments in Labour history’

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The chancellor says she will invest to reverse Tory decline, but stands accused of breaking party manifesto promises

Labour will launch a new era of public and private investment in hospitals, schools, transport and energy as momentous as any in the party’s history in this week’s budget, the chancellor, Rachel Reeves, has said.

In an interview with the Observer before the first budget by a female chancellor, Reeves draws comparisons with Labour’s historic reform programmes begun in 1945 by Clement Attlee, in 1964 under Harold Wilson and in 1997 under Tony Blair.

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Rachel Reeves has promised not to raise taxes, so how can she fill budget coffers?

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Chancellor said to be planning measures including raising employer NI contributions and capital gains tax rates. We consider the likelihood of each and the potential for a row

During the general election campaign, Paul Johnson of the Institute for Fiscal studies repeatedly accused both main parties of indulging in a “conspiracy of silence” over their economic policies. Neither Labour nor the Tories would admit, he complained, that if they won they would have to announce huge tax rises or spending cuts to restore the public finances to anything resembling good health.

On Wednesday, 118 days after Labour won the election, Rachel Reeves will prove Johnson right. In her first budget she will spell out plans to raise an eye-watering sum of about £40bn from tax rises and spending reductions to wipe the slate clean and to pump funds into public services. She will also confirm changes to debt rules that will release up to £50bn more to borrow for long-term investment in new national infrastructure.

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Budget will reverse huge cuts in UK’s public investment, Reeves confirms

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Chancellor pledges to spend, but says there will be no Truss-style splurge when she changes fiscal rules in budget

Rachel Reeves will pledge to reverse huge cuts in public investment in her budget next week after she confirmed that rules limiting her spending power will be overhauled to enable the government to release as much as £50bn for infrastructure spending.

The chancellor said she would revise how the Treasury calculated shortfalls in the government budget over the rest of the parliament to free up funds to invest in public infrastructure.

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Lloyds backs Reeves budget plans despite mooted tax increases

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Bank expects ‘constructive, pro-growth agenda’ by chancellor next week and seeks to be part of it

Lloyds Banking Group has backed the Labour government’s forthcoming budget and played down the impact of any tax increases, which it said would probably be part of a “constructive, pro-growth agenda”.

The chief financial officer of the UK’s biggest mortgage lender, William Chalmers, said he would welcome a budget package that was consistent with government pledges to kickstart growth and investment in key areas such as energy, infrastructure and housing.

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Cross-party MPs urge Reeves to impose 2% tax on wealth above £10m

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Move could raise £24bn a year say signatories including Jeremy Corbyn as polls suggest public support

A cross-party group of 30 MPs has urged Rachel Reeves to impose a wealth tax on Britain’s rich in next week’s budget rather than announce spending cuts that would hit the most poor hardest.

In a letter to the chancellor, the MPs – including the former Labour leader Jeremy Corbyn and his then shadow chancellor, John McDonnell – say she could raise £24bn a year from a 2% tax on wealth above £10m and lay the foundations for a fairer, more sustainable economy.

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Rachel Reeves will tax businesses to plug £9bn black hole in NHS

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The chancellor is set to announce a revenue-raising budget designed to reset Britain’s public finances

Rachel Reeves is set to use one of the most pivotal budgets of recent times to call on businesses to pay more tax to help restore the NHS, amid warnings that the health service has been left with a £9bn hole in its finances.

The chancellor is expected to stake her reputation on a tax-­raising budget designed as a reset of the public finances. She has already had to deal with cabinet skirmishes over funding unveiled alongside the statement. However, Reeves is understood to believe that the public will accept a multibillion-pound hike in business taxes if it is linked to repairing the health system’s finances.

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Rachel Reeves expected to extend ‘stealth’ freeze on income tax thresholds

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Policy known as ‘fiscal drag’ could bring in as much as £7bn a year after 2028, while dragging workers into paying more tax

Rachel Reeves is expected to extend a “stealth” freeze on income tax thresholds beyond the 2028 deadline set by the previous Conservative government to raise billions of pounds in the budget.

The chancellor is contemplating the move, first reported by the Financial Times, as she seeks tax-raising measures to plug a £40bn shortfall in the public finances that Labour claims was left by the Conservatives.

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Infrastructure taskforce to help chancellor avoid financial sector turmoil

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Rachel Reeves is to seek advice from City experts to ensure big projects’ value for money and reassure markets

Rachel Reeves, the chancellor, is taking action to ensure her budget plan for a multibillion-pound increase in government borrowing to fund infrastructure projects avoids a Liz Truss-style meltdown in financial markets.

Ahead of her tax and spending event on 30 October, the chancellor is convening on Friday the first meeting of a taskforce of leading City figures to advise on infrastructure projects. The government will also launch a watchdog to oversee public works and ensure value for money for the taxpayer.

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Millionaire business owners urge Rachel Reeves to raise £14bn from rise in capital gains tax

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Group of wealthy investors argue it would have no impact on investment in the UK and would raise vital funds for public services

Rachel Reeves has been urged by a group of millionaire business owners to raise £14bn from an increase in capital gains tax at this month’s budget, arguing it would have no impact on investment in Britain.

Ahead of the chancellor’s set-piece event on 30 October, the group of wealthy investors said increasing the tax rate on asset disposals would help to raise vital funds for public services and would not lead to slower economic growth.

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Cabinet ministers contest chancellor’s planned cuts to their departments

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Rachel Reeves aims to find £40bn in budget but several ministers have written to Keir Starmer about spending cuts

Cabinet ministers have pushed back against planned cuts to their departments in the upcoming budget, with several writing to Keir Starmer to contest them.

Several are understood to have shared their concerns at the likelihood of deep cuts to unprotected departments such as housing and transport.

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