Category Archives: Tax and spending

Rachel Reeves vows to use defence spending to support UK’s ‘left behind’ industrial towns

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Chancellor says increased military spending should support ‘British jobs and British industries’

Rachel Reeves has said UK companies and jobs will be prioritised under the government’s plans for a significant increase in defence spending, with an aim to support “left behind” industrial towns and the economy at large.

Announced by Keir Starmer last week amid growing fears over Donald Trump’s commitment to European security, the government will increase defence spending to 2.5% of GDP by 2027 – worth an additional £6bn a year.

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Email shows that Musk ally is moving to close office behind free tax filing program at IRS

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Program is apparently being closed according to email from former Tesla engineer installed in GSA

An Elon Musk ally installed in the US government said in a late night email going into Saturday that the office behind a popular free online tax filing option would be shuttered – and its employees would be let go.

The 18F office within the General Services Administration (GSA) created the IRS Direct File program that allows for free online tax filings. It has been a frequent target of Musk, and one of the billionaire businessman’s close associates who holds a key position in the GSA informed staffers that the agency would close 18F in an email to staffers that arrived around 1am on Saturday morning.

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Cuts to UK vaccine funding could lead to ‘huge numbers’ of child deaths overseas

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Exclusive: Hundreds of thousands of world’s poorest children could die if aid programme slashed, experts warn

Hundreds of thousands of children in the world’s poorest countries will die if the UK cuts back funding for a hugely effective vaccination programme as part of its significant reduction in overseas aid, the Guardian has been told.

According to data collated by the Global Alliance for Vaccines and Immunisation (Gavi), to which the UK has previously been one of the main contributors, even a small cut in UK funding would be expected to result in millions fewer vaccinations, leading to huge numbers of preventable deaths.

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Poorest UK households pay rising share of income on council tax, study finds

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Resolution Foundation report says failure to reform has ‘slowly recreated the issues that undid the poll tax’

Britain’s poorest households are paying an increasing share of their income on council tax, according to new analysis that likened it to the poll tax that contributed to the downfall of Margaret Thatcher.

The poorest fifth of households paid 4.8% of their income on council tax in England, Wales and Scotland and on domestic rates in Northern Ireland in the 2020-21 financial year, up from 2.9% in 2002-3, according to research by the Resolution Foundation.

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UK tax administration costs spiralling due to complex system, says watchdog

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Businesses pay hundreds of millions of pounds more and losing trust in HMRC, reports National Audit Office

An increasingly complex tax system is burdening the government and businesses with hundreds of millions of pounds more in administration costs, Whitehall’s spending watchdog has warned.

The report by the National Audit Office (NAO) also said “poor levels of service” meant some taxpayers and their representatives were “finding it more difficult to deal with their tax matters and are losing trust in HM Revenue & Customs [HMRC]”.

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UK borrowing jumps unexpectedly, adding to pressure on Rachel Reeves

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Increase to £17.8bn is well above City forecasts and is highest December figure for four years

UK government borrowing jumped unexpectedly to £17.8bn last month, piling pressure on Rachel Reeves to plan budget cuts before a spending review in the summer.

The figure was about a quarter higher than the City had forecast and was up by £10.1bn more than in the same month a year earlier, making it the highest December borrowing for four years.

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Southport killer will be treated as a terrorist in jail, Yvette Cooper tells MPs – as it happened

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Home secretary also says inquiry into the attack will cover wider threat posed by youth violence

Starmer says nothing will be off the table in the inquiry.

There are also questions about the accountability of the Whitehall and Westminster system – a system that is far too often driven by circling the institutional wagons, that does not react until justice is either hard won by campaigners, or until appalling tragedies like this [take place].

Time and again we see this pattern, and people are right to be angry about it. I’m angry about it.

There are also bigger questions, questions such as how we protect our children from the tidal wave of violence freely available online.

Because you can’t tell me that the material this individual viewed before committing these murders should be accessible on mainstream social media platforms, but with just a few clicks, people can watch video after horrific video – videos that, in some cases, are never taken down,

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Treasury seeks to keep water firm fines earmarked for sewage cleanups

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Exclusive: Restoration fund in England could be ‘siphoned off’ to be used for general government spending, not repairing rivers

Rachel Reeves’s Treasury is looking to keep millions of pounds levied on polluting water companies in fines that were meant to be earmarked for sewage cleanup, the Guardian has learned.

The £11m water restoration fund was announced before the election last year, with projects bidding for the cash to improve waterways and repair damage done by sewage pollution in areas where fines have been imposed.

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Swinney to warn opposition of fuelling populism if Scottish budget not passed

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Scottish Labour, Greens and Lib Dem MSPs accuse first minister of ‘creating false narrative’

John Swinney, Scotland’s first minister, will warn opposition parties that they will fuel populist forces if they prevent his budget from being passed this month.

In a keynote speech in Edinburgh on Monday to mark the new year, Swinney will say Scottish voters would be astonished and public services damaged if MSPs fail to allow the budget to go through.

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Labour’s private school tax plan strongly backed by public, poll shows

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Government accuses Tories and rightwing media of being ‘out of touch’, as VAT policy due to come into force

The government has accused critics of its plan to put VAT on private school fees of being detached from the real world after polling showed the policy, which will come into force on 1 January, is strongly backed by the public.

The poll, commissioned by the Private Education Policy Forum (PEPF) thinktank, found that 54% of people backed the idea, with 22% opposing it. This is an even greater margin of support than seen in similar polls carried out before the election.

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NHS bosses reportedly worried about Starmer’s pledge to cut waiting lists

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PM expected to set target to carry out 92% of routine operations and appointments within 18 weeks

NHS bosses are said to be privately concerned about Keir Starmer’s ambitious targets to cut waiting lists for routine operations, set to be announced later this week, which will also include specific targets on living standards and housebuilding.

The prime minister is expected on Thursday to set a target for 92% of routine operations and appointments to be carried out within 18 weeks, one that has not been achieved in almost a decade, the Times has reported.

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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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