Budget 2017 Where Are the Stealth Taxes

Last updated on 09/03/2017

Budget 8 March 2017Budget 2017

Where Are the Stealth Taxes?

With increased spending on the NHS, which takes up around one third of total UK spending yet the Government trying to reduce public debt and prepare a ‘war chest’ for Brexit, we looked at the small print in the Budget report to establish where you are going to be taxed more to fund this given that income tax rates have not increased and personal allowances are rising.

  • Insurance premium tax will be raising nearly £1bn pa by 2020/21.
  • Corporation Tax relief on interest debts and offsetting losses will save over £1.2bn a year by 2020/21. This is to stop foreign companies trading in Britain, borrowing money rather than investing money to develop their business and also then offsetting losses from overseas parent businesses.  A well-known coffee/café firm has not paid taxes in the UK for 10 years!
  • Little help for the young. Changes to apprenticeship funding will save over £3bn pa by 2020/21.
  • Digital Tax records efficiency will save nearly £1bn pa by 2020/21.
  • Changes to social housing will save around £0.75bn pa by 2020/21.
  • Likewise, reduced TV licence help for over 75s will save £0.75bn pa by 2020/21.
  • Cars are another big deal: increased new car excise duty will raise just under £1.75bn pa by 2020/21. A hit on foreign car manufacturers.
  • Company Car Tax increases will raise an additional £0.8bn pa by 2020/21. Another hit on foreign car manufacturers.
  • Tax credits only applying up to 2 X children will save nearly £2bn pa by 2020/21.
  • Even a ‘pop’ soft drinks levy will raise £0.4bn pa by 2020/21.

Remember, these figures are year on year, this is not a cumulative saving over the next 5 years, these are yearly savings/increased revenues.

Here’s a summary of some of the ‘stealth’ taxes that will fund the NHS, create a Brexit ‘war chest’ and hopefully reduce the national deficit, now running at £66,000 per household:

 

 

Revenue increase £m 2017/18

Revenue increase £m 2018/19

Revenue increase £m 2019/20

Revenue increase £m 2020/21

Revenue increase £m 2021/22

2% Increase Insurance Premium Tax

£520m

£840m

£840m

£845m

£855m

National Insurance Increases

£180m

£150m

£155m

£155m

£155m

Remove Salary Sacrifice Advantages

£85m

£235m

£235m

£235m

£260m

Pension Money Purchase Allowance down to £4kpa

£65m

£70m

£70m

£70m

£70m

VAT Flat Rate Scheme up to 16.5%

£165m

£135m

£135m

£130m

£125m

Soft Drinks/ Pop Levy

£0

£385m

£390m

£385m

£380m

Corporation Tax Restriction how much debt interest can be offset against profits

£1105m

£1140m

£1080m

£980m

£1020m

Corporation Tax Reform Loss Relief

£495m

£355m

£305m

£255m

£215m

Apprenticeship Employer Support

£2630m

£2720m

£2810m

£2925m

£3045m

Working away temporary accommodation expenses

£255m

£235m

£245m

£260m

£270m

Digital Tax Records/Systems

£0

£10m

£400m

£805m

£965m

Social Sector Housing support aligned with Private Sector Housing

£0

£440m

£570m

£660m

£740m

Vehicle Excise Duty (new cars)

£175m

£675m

£895m

£1340m

£1735m

Company Car Tax 2% increase 2017/18/19

£200m

£410m

£420m

£420m

£445m

Company Car Tax 3% increase 2019/20

£0m

£0m

£305m

£315m

£325m

Over 75’s TV Licence

£0m

£180m

£430m

£735m

£765m

Tax Credits limited to 2 Children

£310m

£765m

£1205m

£1615m

£1990m


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