Tagged: tax

Tories VAT Hike Costs Struggling Families £450 A Year

New figures reveal that families with children have paid an average £1,800 more in tax, as a direct result of the government’s VAT hike.

David Cameron and the Tory-led coalition government increased the rate of VAT from 17.5% to 20% in 2011. A move which has had a devastating impact on low-income families, many still struggling to cope with rising energy prices, cuts in welfare benefits and years of below inflation wage rises – a real-terms cut in income.

VAT can be charged on a number of different items including food, adult clothes, gadgets and household appliances – among others.

Items such as gas and electricity for the domestic home is usually charged at what is known as the ‘discount rate’. Some other items are ‘zero rated’ or ‘VAT free‘: such as baby wear, children’s clothing, children’s footwear and newspapers.

However, treasury figures analysed by Labour reveal how the 2.5% hike in VAT costs a couple with children £450 a year on average. This means that over the course of this parliament hard-up families have paid a total of £1,800 more in tax under David Cameron.

Food bank charity Trussell Trust helped to feed more than 913,000 people with three days worth of emergency food aid in 2013, including 330,205 children – up from 40,898 in 2009/10.

The second most common reason given for turning to food banks is ‘low income’ (20.29%), while benefit delays are cited as the primary reason (30.93%).

Labour said the Tories have gifted the top one percent of earners with tax cuts, “while everyone else faces a cost-of-living crisis”.

Shabana Mahmood MP, Labour’s Shadow Exchequer Secretary to the Treasury, said:

“Before the last election David Cameron and George Osborne said they had no plans to raise VAT, but that’s exactly what they did after they got in.

“Raising VAT on families and pensioners is what Tory governments always do”, she said.

> And everyone who isn’t part of a family or a pensioner too – please lets be inclusive about this . We all pay VAT.

“These figures show that over the last four years a family with children has paid £1800 more in higher VAT under the Tories.”

She added:

“The truth is that the only people who have got a big tax cut under this Government are those earning over £150,000.

“And while everyone else faces a cost-of-living crisis, the Tories have refused to rule out another VAT rise in the next Parliament to pay for their £7 billion of unfunded tax promises.”

Shabana Mahmood said a Labour government would “balance the books in a fairer way”.

Adding: “We’ll cut taxes for 24 million people through a lower 10p starting rate of tax, freeze energy bills, cut business rates and expand free childcare for working parents.

Labour would also reverse “David Cameron’s £3 billion a year tax cut for the top one per cent of earners.”

Sourece –  Welfare Weekly, 04 Jan 2015

http://www.welfareweekly.com/tories-vat-hike-costs-struggling-families-450-year/

Poorest households pay 47% of gross income in tax

 

 

I’m always a little wary of anything with the Taxpayer’s Alliance name on it, always regarding them as a Tory front group… are they starting to bite the hand that (alledgedly) feeds them ?

Order Of Truth

poortaxA report just published by the Taxpayer’s Alliance has found that the poorest 10% of households in the UK pay 47% of their gross income in direct and indirect taxes.

Analysis of Office for National Statistics figures for 2012-13 by the organisation shows that VAT accounts for 13.9% of the gross income of the bottom 10%, whose total gross income was £9,743 (inclusive of benefits), and 7.2% is accounted for in council tax.

Combined direct and indirect taxation accounted for £4611 of gross income, leaving £5132.

In contrast, the wealthiest 10% of households paid 35% of their gross income (including benefits) in taxation, with income tax accounting for 19.1%.

Jonathan Isaby, Chief Executive of the TaxPayers’ Alliance, says in the report “This analysis shows how pernicious our tax burden has become. Not only does the tax system hit the poorest hardest, but those at the top are already contributing far…

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Bedroom tax crime fears

Crime chiefs say the so-called bedroom tax is driving people to ruthless loansharks and committing crime.

Cleveland and Durham’s Police and Crime Commissioners expressed growing concerns over the financial pressures the benefit cut is having on households.

They say it is leading to a rise in crimes like shoplifting and people buying on the black market and worry the benefit cut will drive people to illegal and ruthless money lenders.

> And nobody ever speculated that this would be a likely consequence ? What will they do when they catch on to the effects of  benefit sanctions !

It is after a recent interim Government report on the spare room subsidy.

It revealed that 59 per cent of social housing tenants hit by the bedroom tax nationally have been unable to meet their basic housing costs.

Crime commissioner for Cleveland Barry Coppinger said: “Bedroom tax leaves many in severe hardship and I’m concerned that some families will turn to volatile loan sharks as a short-term solution.

“The pressure increases when they can’t pay what they owe the unlicensed moneylender, particularly if a threat of violence is looming over them.”

He added: “Deep and relentless welfare reforms have a knock-on effect on other crimes, particularly shoplifting, as families turn to the black-market to buy food and other items they can’t afford in the shops.

“I would reiterate the importance of seeking trusted financial advice, accessing credit unions and asking to be referred to a foodbank. Foodbank locations in Cleveland are on the information section of my website.”

And Durham’s Police and Crime Commissioner Ron Hogg said he feared the problem will get worse with further planned welfare reforms.

Mr Hogg said: “We predicted that this tax would cause massive problems for some of the most vulnerable in our society.

“With more welfare reform yet to be implemented the situation will only get worse.

“Many in our communities will struggle to put food on the table or pay their utility bills.

“As these financial pressures grow we would encourage the use of credit unions and urge those affected to seek trusted financial advice.”

The bedroom tax came into force on April 1 last year and affects social housing tenants in employment and those in receipt of housing benefits if they have any unoccupied rooms.

Households under occupancy have their benefits cut by around £13 each week for one bedroom or £22 for two bedrooms.

In Hartlepool, 1,581 households have been affected with the average weekly loss of housing benefit of £13.67 a week and the annual value of housing benefit reductions in Hartlepool is £1.123m.

Source – Hartlepool Mail,  31 July 2014

Special ‘tax’ on fast food takeaways called for in Newcastle

A special “tax” on fast food takeaways to help fund obesity programmes and deal with litter left by customers has been called for in Newcastle.

The suggestion follows the city being the first in the country to introduce a late night levy on bars and clubs to help police deal with drink-fulled crime and disorder.

It was proposed by Lib Dem councillor Greg Stone and follows a recent controversial planning application by McDonald’s for a site near Kenton School, the city’s largest secondary school with around 2,000 pupils.

The application is to go before the council’s planning committee later this month and has provoked a storm of protest from residents, local councillors and the head of Kenton School, David Pearmain.

In a motion put to a full Newcastle City Council meeting, Coun Stone asked for it to investigate the feasibility of asking businesses with negative socio-economic effects to help offset these by paying an annual “sustainable retail levy” to support initiatives such as local high street improvements, anti obesity schemes or financial inclusion projects.

It also asked for the council to consider greater controls on changes of use to things like hot food takeaways in identified local retail centres and streets.

The Lib Dem Opposition group’s motion highlights the findings of the council’s own Retail Health Check Analysis, which was instigated by the Lib Dem administration in 2010.

He asked for a report to be carried out to assess how the council is progressing with implementing its recommendations.

Coun Stone said the issue of local retail vitality and the “healthiness” of high streets is a concern, and the number of takeaways in the city is continuing to proliferate.

He said: “Local communities should have more say. I don’t want to ban takeaways but they do affect the local way of life and can lead to later problems.”

He said takeaways contributed to “toxic High Streets”, which also included the effect on them of pawn shops, money lenders and bookmakers.

Labour Coun Joyce McCarty rejected the levy idea, saying: “We don’t want to see another tax on small businesses. If we’re going to try and work with the businesses we need to look at issues case by case and deal with it as the need arises.”

There were also criticisms of the easing of planning laws by the Coalition Government which makes it easier for retail outlets to change to fast food takeaways.

In the amendment to the Lib Dem motion, which was accepted, the council agreed to continue to support local retail diversity and vitality as well as the introduction of “localist” retail planning policies to improve the health and vitality of local retail centres.

Source –  Newcastle Journal,  03 July 2014

Bedroom tax pushes northern households into debt

Northerners hit by the bedroom tax are cutting back on essentials such as food and heating, according to new research from the National Housing Federation.

 An Ipsos MORI survey carried out for the Federation found that nearly a third (32%) of people affected by the bedroom tax in the North say they have cut back on food and more than a quarter (26%) have cut back on heating as a result of the tax.

Nearly half (45%) of those affected in the North have needed to borrow money to help pay their rent since the introduction of the bedroom tax in April 20131.

The research also found that:

· Four in five (80%) of those affected in the North are concerned about falling behind on rent.

· Nine in ten (90%) of those affected in the North are concerned about meeting their living costs.

· Nearly three-quarters (74%) of those affected in the North are concerned about eviction.

National Housing Federation chief executive David Orr said: “People stung by the bedroom tax are being forced to make difficult choices on which bills to pay and which essentials to go without. They are living in fear that they will lose their homes and have resorted to borrowing from friends and family to try and get by.

“Housing associations have spent millions of pounds working more closely with their tenants, introducing projects to tackle fuel poverty and working with food banks to help alleviate food poverty. But these services have costs, which leaves less money for building new homes.

“The results of our latest survey are depressing. As we feared and warned, the bedroom tax is having a disastrous impact. The only solution is to abolish this policy which fails on every level.”

Source – Berwick Advertiser,  04 June 2014

Tax credit debt collection is a double-edged attack on the poor

Mike Sivier's blog

140126facts

There’s more than a little of the piscine about the fact that our Conservative-led has set debt collection agencies onto poor families who have been overpaid tax credit due to errors made by HM Revenue and Customs.

Firstly, the move undermines the principle behind the tax credit system – that it is there to ensure that poorly-paid families may still enjoy a reasonable living standard. Tax credits are paid on an estimate of a person’s – or family’s – income over a tax year and the last Labour government, knowing that small variances could cause problems for Britain’s poorest, set a wide buffer of £25,000 before households had to pay anything back.

By cutting this buffer back to £5,000, the Conservatives have turned this safety net into a trap. Suddenly the tiniest overpayment can push households into a debt spiral, because their low incomes mean it is impossible to pay…

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Britain’s richest are even better-off – but how did they get that way?

Mike Sivier's blog

inflation

The Sunday Times Rich List has confirmed what some of us have been saying for years – that Austerity has funnelled Britain’s money into the hands of a very few, very selfish people.

The 1,000 richest Britons now own one-third of the nation’s gross domestic product, with their combined wealth rising from last year’s total of £449,654,000,000 to £518,975,000,000.

That’s an increase of 15.4 per cent, an average rise of £69,321,000 each and an average income of 518,975,000.

Average wages in the UK are stagnant at around £26,500, with average pay for the lowest earners having fallen by 14 per cent since David Cameron’s Tory government got its nose in the trough in 2010.

There are only two points to make from this.

Firstly, bearing in mind Gary Barlow’s recent appearances in the news for taking part in a tax avoidance scheme: How many of these 1,000 very rich people…

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Coalition drags out the pain with promise of many more cuts

Mike Sivier's blog

140205cuts

The BBC has reported findings by the Institute for Fiscal Studies, showing that the Coalition government will be less than halfway through its planned spending cuts by the end of the current financial year (March 31).

The organisation said 60 per cent of the cuts were still to come.

This raises a few urgent questions. Firstly: This government was formed on the promise that it would balance the books by 2015, which presupposes that its entire plan for doing so would be in place long before then. We know that this ambitious claim was dismissed after years of failure, but part of the reason for this failure was that George Osborne stopped a recovery that was already taking place, and which would have led to economic growth of 20 per cent by now, if it had been allowed to continue (according to Michael Meacher MP). My question, therefore…

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Bedroom Tax – South Tyneside v Government

A GOVERNMENT minister has been challenged to a face-to-face meeting with South Tyneside councillors concerned at the impact the ‘bedroom tax’ is having on borough citizens.

> Good luck with that. The Jarrow marchers in the 1930s walked the length of England to London, only to have government ministers refuse to meet them when they got there.

 

South Tyneside Council chief executive Martin Swales is to write to Tory MP Kris Hopkins, the current housing minister at the Department for Communities and Local Government, calling for the meeting.

> Make him come here.

It comes after a motion expressing concern over the scheme was carried unanimously at a full council meeting last week.

The motion – signed by ten South Tyneside councillors – stated that the tax ‘discriminates unfairly against the poorest in our society’ and welcomed a commitment by Labour Leader Ed Miliband to ‘repeal this draconian legislation’ if the party returns to power at next year’s General Election.

> Given Labour’s  other plans for the poor, I should wait a while before we all start cheering (and voting).

A total of 2,770 council tenants in South Tyneside have been affected by the tax, which has seen a cut in housing benefit for households with one or more bedrooms deemed to be spare.

Hundreds of council tenants in the borough have fallen into rent arrears since its introduction.

Nationally, one in three council tenants affected by cuts to housing benefit have fallen behind on rent since the policy took effect in April, according to figures from the Trades Union Congress.

Since March there has been an £81,000 rise in  South Tyneside council rent arrears, with the total amount owed to the local authority now standing at £1.8m.

The motion stated: “South Tyneside Council notes with concern that 2,770 council tenants have been affected by the bedroom tax.

“The council believes that the bedroom tax discriminates unfairly against the poorest in our society, and that by forcing residents to leave their homes can lead to instability of close-knit local communities and neighbourhoods.”

> Suprisingly ( or perhaps not…) they don’t seem to have connected the above  with the rise in begging on the streets in South Shields, reported yesterday.

Source – Shields Gazette, 21 Jan 2014