Emily Thornberry Thinks You Pay VAT on Milk

Emily Thornberry was on LBC over the weekend talking about the impact of VAT on people on middle incomes. An important issue, though it was illustrated by Thornberry with a rather odd example:

“Things like VAT are things that people on average incomes are hardest hit – we all have to buy milk.”

Milk is zero-rated. No one pays VAT on milk. This is a more embarrassing mistake than not knowing the price of a pinta…

Hammond’s Tax Bombshell

No surprise: Hammond tells the BBC he needs “flexibility” in the manifesto, so the 2015 pledge not to raise income tax, NI or VAT looks like it’s going out of the window. Hilariously John McDonnell is now attacking the Tory tax bombshell: “You can’t trust the Tories on tax – we can expect a tax bombshell if they get re-elected.” McDonnell is attacking the Tories for raising taxes, threatening pensions and not closing the deficit quickly enough. Funny old world…

Hammond U-Turns on National Insurance Rise

Philip Hammond has u-turned on his Budget National Insurance rise, telling MPs that it was against the spirit of the Tory manifesto. He confirms there will be no NI rise this parliament. The letter:

A sign of how weak the government is that it is forced to u-turn on its Budget after complaints from a few MPs, and also what a disastrous error it was to forget the Tory manifesto. Wow…

You Pay £15 Million For Local Trade Union Pilgrims

Millions of pounds of taxpayer-funded subsidies are still being dished out to trade union ‘Pilgrims’ across the country, a report by the Taxpayers’ Alliance has found. Despite promises by the government to clamp down on so-called ‘facility time’, there remain 371 local authority staff members who spend more than half their time working for trade unions, while being paid by the taxpayer. The cost of facility time (paid time-off taken by trade union representatives to carry out union duties) was at least £14,648,030 since 2012. Nearly a third of those local authorities analysed did not publish the data on their involvement with unions, thereby breaking the law.

The map of local authority Pilgrims waste extends across Britain:

  • The worst offenders nationally are Birmingham City Council with £1,124,924 and Leeds City Council with £502,095;
  • In the North East, Sunderland – £258,697;
  • In the North West, Bolton – £390,481;
  • In Scotland, City of Edinburgh – £244,576;
  • In the East Midlands, Leicester City Council – £494,544;
  • In the South West, Bristol City Council – £134,931;
  • In the East of England, Suffolk County Council – £189,741;
  • In London, Lambeth Borough Council – £281,000;
  • In the South East, Brighton and Hove City Council – £262,016.

Alex Wild, Research Director of the TPA, said:

“Trade unions are voluntary bodies of members and so should only receive the support of those members, not taxpayers. A huge amount continues to fund union duties, often without the express knowledge or consent of taxpayers, which simply isn’t right.”
David Cameron’s government began the process of dealing with Pilgrims, time for Theresa May to see it through…

Fraser Nelson Takes Tories to Task on NI

Karen Bradley wheeled out the nonsense Tory line that the legislation only referred to Class 1 NICs. It is the same line that has been sent to Tory MPs doing broadcast today:

This is dire stuff. The legislation came after the election – the manifesto did not mention anything about Class 1 NICs. As spin goes it really is weak…

May: Hiking NI Taxes is Fair and Progressive

If voters wanted fair and progressive that was the offer in the LibDem manifesto.

The Tory manifesto promised not to raise National Insurance. Pathetic excuse.

May Opposed National Insurance Rise in 2010

Awkward…

Hammond’s Tax Bombing Raid on Britain

A White Van Tax, a tax on strivers – safe to say that was not a pre-election Budget…

Hammond Breaks Tory Manifesto Commitment Not to Raise NI

Philip Hammond has broken the 2015 Tory manifesto commitment not to raise National Insurance contributions. It was there in black and white not once but four times:

“A Conservative Government will not increase the rates of VAT, Income Tax or National Insurance in the next Parliament”

“we will not raise VAT, National Insurance contributions or Income Tax”

“commit to no increases in VAT, National Insurance contributions or Income Tax”

“we can commit to no increases in VAT, Income Tax or National Insurance. Tax rises on working people would harm our economy, reduce living standards and cost jobs”

Today Hammond hiked NIC payments for self-employed people from 9 percent to 10% in 2018 and up again to 11 % by 2019. Two 1% tax rises in two years for the self-employed. Tory manifesto promise broken…

CPS Corporation Tax Report Reveals Labour Black Hole

This morning’s Centre for Policy Studies report will be worth noting when Corbyn responds to the Budget later. Their new research out today finds that reducing corporation tax from 28% to 20% has helped increase growth and profitability leading to a rise in receipts by 28% since 2011. Labour’s policy is to increase corporation tax to 21.5% to fund £15 billion of extra spending per year. Yet the CPS finds that such a hike would only raise £5 billion, leaving Labour with a £10 billion funding gap. 

Labour have pledged to spend the corporation tax money 11 times already: on the adult skills budget, supporting British steel, ending public sector pay restraint, reintroducing EMA, scrapping tuition fees, extending pension credit, reversing Universal Credit changes, pensions triple lock, social care, the NHS and PIPs. And now the experts say it won’t raise anything like as much as they need. Ammo for the Tories when Corbyn gets up to respond to Hammond…

Hammond Transferred Shares and Property to His Wife

Philip Hammond very sensibly says he will not be publishing his tax return, saving himself the grief that Corbyn had yesterday. It also saves the Chancellor from having to talk about Castlemead Ltd. In 2010 Hammond was the subject of a Dispatches investigation which accused him of “doing a Philip Green”, transferring 40% of his shares in Castlemead – which had already paid him millions in dividend payments – to his wife. The programme claimed that any payouts Mrs Hammond then received from the company could be taxed at a lower rate, potentially giving the Hammonds a nifty tax saving. The other 60% of the shares were put in a trust, of which he remains a beneficiary to this day. At the time Hammond strongly denied he had avoided any tax, though he confirmed tax on the dividends would be lower if his wife was in a lower tax band than him. He declined to discuss whether this was the case.

There’s more. In 2014 the Mirror reported that Hammond had gifted his share of a £600,000 property to his wife, meaning Mrs Hammond was now responsible for paying all tax on the rent from the property. The paper accused the Hammonds of using the move to avoid tax. Hammond insisted it was a “private matter” but said any suggestion the transfer was “designed” to avoid tax was “incorrect”. 

There is of course no suggestion that Hammond evaded any tax or did anything other than pay the amount of tax he owed. Guido is of the view that compelling politicians to reveal their tax returns is a slippery slope – how long before a politician argues we should be like Norway where members of the public have no privacy. Though you can see why the Chancellor would want to save himself the trouble of explaining all this…

Corbyn Blames Tax Row on Media / Cabinet Office Conspiracy

It has been a long day of spin, claim and counter claim, rebuttal and pre-buttal, three on-the-record statements, multiple off-the-record briefings and questions to three government departments. Finally Jeremy Corbyn has tried to clear up his tax return, sort of. Guido takes you through it, blow by blow…

9pm last night: Journalists first began to query whether Jeremy Corbyn’s tax return included his salary as Leader of the Opposition. Corbyn’s team did not provide an answer.

1am this morning: Corbyn’s team released a statement explaining that he included his LOTO payments in the pensions and benefits section, rather than the employment section. They did not say why.

9am this morning: It emerged that the government’s accounts show a different figure for his LOTO earnings, and say it is a “salary“. Corbyn’s team did not have an explanation for the discrepancy.

3pm this afternoon: Corbyn’s team explain the discrepancy in a new statement: “This figure is calculated after deducting the waivers Jeremy has made of earlier increases to the benefit… A parliamentary pension contribution of £3,395 was also deducted”. They blame the Cabinet Office for not clearing it up and offshore media owners for having ulterior motives:

“The owners of the media companies that have attempted to cast doubt over Jeremy’s transparent and accurate tax return are of course among those who could stand to lose from the tax transparency and justice the British people demand. Jeremy believes firmly in transparency. These media barons have tax questions of their own to answer.”

Interesting conspiracy, or could it just be that Corbyn’s team didn’t understand the numbers and it took them 18 hours to work it out?

Death Tax Wasn’t Just Awkward For Hammond

The Sunday papers reported that Philip Hammond has shelved plans for a new death tax after deciding his previous statements on the policy meant a u-turn would be too toxic. The Sunday Mirror said Hammond “feared he’d look a plonker”, while the Sunday Times quoted an aide:

“Virtually everyone who was in the cabinet when the death tax was first suggested is on the record saying it is a terrible idea. That’s quite hard to get around.”

Guido knows another reason why a death tax would be a very brave move by the Tories. Which top CCHQ aide was at the forefront of those vicious attacks on Labour’s death tax back in 2010? The Conservative Research Department’s then deputy director, now Downing Street chief of staff Nick Timothy…

Diane Abbott’s Trumpian Tax Denial

This tweet from Diane Abbott is positively Trumpian. She says it is “wrong” that Corbyn bungled his tax return. To be clear, he declared his Leader of the Opposition salary in the pensions and state benefits section. Tax accountants agree this is bizarre and unorthodox, and there is no explanation from his team why it was declared like this. Diane says the media did not read Corbyn’s return properly. No – journalists asked Corbyn’s office for an explanation, they were unable to provide one for several hours. And they are still unable to answer the outstanding questions

UPDATE: Statement from Labour six hours later.

Corbyn’s Numbers Don’t Tally With Government Accounts

Jeremy Corbyn’s team say he was paid just £27,192 in his role as Leader of the Opposition in the year 2015/16. Yet this does not tally with the government’s accounts – dug out by James Tapsfield – which say Corbyn was paid £30,587 in 2016/16. Why is Corbyn’s declaration not the same as this figure? Team Corbyn say the £27,192 figure comes from his P60. They don’t know why the government’s accounts show him being paid £30,587…

What’s more, his earnings as Leader of the Opposition are clearly a salary. As you can see above, the government accounts call it a “salary“. So why does it appear in the pensions section of his tax summary, not the salary section? Have to wonder if this tax stunt was worth it for Jez…

UPDATE: Statement from Labour six hours later.

£40,000 ‘Missing’ From Corbyn’s Tax Return

It’s Budget week so Jeremy Corbyn has published a summary of his tax return to put pressure on Theresa May and Philip Hammond. What could go wrong? Well, it appears £40,000 in earnings from his role as Leader of the Opposition are missing from his 2015/16 declaration. Corbyn declared £114,342 in earnings from his MP’s salary, outside earnings and pension. Yet the £40,000 he should have earned as Labour leader during the financial year does not appear on his return. It is an offence not to declare income correctly. Remember he messed up last year’s tax return too and had to pay a £100 fine. Corbyn also published his National Insurance number and his Unique Taxpayer Reference, which Guido is choosing not to reproduce. Shotgun loaded, aimed and fired straight into his own foot…

UPDATE: Statement from Team Corbyn:

“Claims in some media that Jeremy Corbyn failed to declare £40,000 of income to the taxman are untrue. The extra payment following Jeremy’s election as Labour leader of £27,192 is recorded in the tax return under the heading of ‘public office’. We are confident the total income of £114,342 in the tax return is correct, as is the income tax charge of £35,298. Nearly all the tax was paid at source.”
Corbyn says that for some reason he included the £27,192 LOTO salary in the “pensions and state benefits” section, hence the confusion – it took his team about four hours to work it out themselves and inform the media. They will only say they are “confident” the tax return and amount of tax paid are correct…

McDonnell Contradicts Corbyn on NHS Tax

Delivering his pre-Budget speech this morning, John McDonnell outlined his support for a hypothecated NHS tax to “restore trust” in taxation and government spending:

“Hypothecation, allocating taxes raised to specific purposes, can absolutely make clear where tax money is being spent. It can help restore the trust and confidence in taxation and government spending that has otherwise started to break down… It needs a clear commitment, over the long term, that specific taxes will be used for specific purposes, and that this spending will be properly monitored.”

Yet just six weeks ago Jeremy Corbyn seemed to say a hypothecated NHS was a bad idea. Speaking on Marr on 15 January, Jez said:

“I am not one that’s generally in favour of hypothecated taxation… Whether we’d have a specific tax I doubt, but I’m prepared to consider it and discuss it as I’m sure all my colleagues are. But if you go down the road of hypothecated taxation then you’re going to do hypothecated taxation for every other service.”

Well, which is it?

Age UK Calls For Tax Rises While Encouraging Tax Avoidance

Age UK today calls on the government to raise taxes to pay for the country’s social care system. In its briefing paper Health and Care of Older People in England 2017, the charity states:

If you believe, as Age UK does, that the current situation cannot be allowed to go on then you may conclude, like us, that the need for a proper discussion…means it runs up against some ‘sacred cows’ – such as the possibility of raising taxes on income or wealth.

This could generously be interpreted as a cognitive lapse on the part of Age UK, since it also advises the elderly on how to reduce their tax bills and especially on inherited wealth. For example, its leaflet on will writing excitedly promotes tax efficiency measures:

Making a will is vital if you want to be certain that your wishes will be met after you die – and it might also prevent you from paying unnecessary taxes to the government…  it might be possible to reduce the Inheritance Tax bill that may be payable on your estate after your death. 

Not sure how you can credibly argue taxes need to go up while also helping the elderly reduce their tax bills…

Save the (Tax Free) Link

Ju­lia Reda, the Ger­man Pi­rate Party MEP, is the most vo­cal op­po­nent to the EU’s pro­posed neigh­bour­ing right: “neigh­bour­ing rights al­ways have a broader scope than copy­right, be­cause they don’t have a thresh­old of orig­i­nal­ity. Whereas sin­gle words or very short sen­tences can­not be pro­tected by copy­right, they would fall within the scope of the neigh­bour­ing right.” She adds that “the pro­posed new right would make links to news ar­ti­cles sub­ject to a fee, even if only the head­line is re­peated in the link. That’s a se­ri­ous threat to free­dom of in­for­ma­tion on­line.”

On September 14, 2016, the EU Commission tabled a directive proposing the worst copyright rules in the world. These include unprecedented new link tax powers for publishing giants. The EU is proposing to tax web links, Google, Twitter and Facebook would have to pay a fee to display the headline and preview snippets to online links. This is absolutely crazy.

The only organisations that want this tax are failing publishers who can’t cope in the digital age. The EU is once again showing its protectionist colours, effectively proposing a new digital tariff…

Multi-Millionairess Polly Toynbee Calls For Property Tax

Guido enjoyed listening to three home-owning multi-millionairess Polly Toynbee rail against inequality and demand a US-style property tax this morning. Six-figure salaried Polly also wants a new levy on “the wealth of the very old, very rich to pay for a care system”.[…] Read the rest

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Quote of the Day

Tory MP Nick Boles says what everyone thinks…

“There is a timidity and lack of ambition about Mrs May’s Government which means it constantly disappoints. Time to raise your game, Prime Minister.”

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