Millions to receive tax spend summary

Written By Unknown on Senin, 03 November 2014 | 15.36

2 November 2014 Last updated at 22:04

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".

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".

'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.

"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.

"I think it is going to help as a country the debate we have about living within our means."

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."

Analysis

By Joe Lynam, BBC News Business Correspondent

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.

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.

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.

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.

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."


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