Successive Labour and Tory administrations have left income tax sacrosanct, dishonestly pledging to voters that they wouldn't raise tax, while reeling in more and more through NI and fiddling with personal allowances. Many, maybe most, taxpayers don't fully understand how NI works. Telling them the truth – that they pay 32% tax rather than 20% income and 12% NI – is a brave move by any chancellor.
Pity he, like a great many other media people, forgets or ignores Employer's contributions. That is a tax which reduces wages just the same as Employee's contributions, Income Tax and even Corporation Tax to an extent. The latter of which imo grants big businesses undue influence over Government policy through a 'no representation without taxation' mentality.
Regards the practice of pre-announcing things, here is a whopper. A brief look at the Treasury 2011 Budget Taxation overview
1.21 Alcohol duty rates — Legislation will be introduced in Finance Bill 2011 to
increase the duty rates for all alcoholic drinks by two per cent above the rate of inflation (based on the retail prices index) as announced in the March 2008 Budget. The changes will take effect on 28 March 2011. This will add four pence to the price of a pint of beer, 15 pence to the price of a bottle of wine, and 54 pence to the price of a bottle of spirits.
It's easy to see why politicians go native once they are in Government. It is far easier to carry over previous policies than come up with your own. I can only surmise that the civil servants will throughly dissuade any incoming Chancellor from rocking the boat for the life of the plans set out by his predecessor. It is pathetic.
Strange that there is an Office of Tax Simplification yet beer duty is being split into 3 classes:
2.20 Duties on high and lower strength beers — Finance Bill 2011 will introduce a new additional duty on beers over 7.5 per cent alcohol by volume (abv) in strength at a rate of 25 per cent of general beer duty. A reduced rate equivalent to 50 per cent of general beer duty will be introduced for beers exceeding 1.2 per cent abv and not exceeding 2.8 per cent abv in strength. These changes will be effective from 1 October 2011. An updated Tax Information and Impact Note is available at Annex A.
The Labour Government went down that road with Road Fund Licence, splitting it up and making it ever more complicated with each Budget.
As for Us and Them:
2.27 Subsistence Allowances paid to experts seconded to European Union bodies located in the UK — As announced in a Written Ministerial Statement made by the Exchequer Secretary to the Treasury on 16 December 2010 legislation will be introduced in Finance Bill 2011 to create an income tax exemption where subsistence allowances are paid to experts seconded to EU bodies located in the UK. Under the normal rules subsistence allowances are taxable as employment income. Experts seconded to EU bodies in other European member States are not normally taxed on any subsistence allowance they receive from the EU body. This measure will ensure that those on secondment to a body in the UK are not at a disadvantage. The exemption will apply in relation to subsistence allowances paid for any period commencing on or after 1 January 2011. A statutory instrument containing Regulations to create the associated NICs disregard will be made on or before 6 April 2011. A Tax Information and Impact Note for this measure is available at Annex A.
Income is income. Why aren't other member states being encouraged to tax it like we have done up till now?