ifs Archives - WRLO Accountants

Tax cuts may have to be scrapped due to ‘economic bind’, warns IFS

WRLO Accountants — Fri, 02 Feb 2024 09:20:30 +0000

Tax cut promises may need to be scrapped as a result of the UK being in an ‘unfortunate economic and fiscal bind’, the Institute for Fiscal Studies (IFS) has warned. The next government is likely to face some of the most difficult economic and fiscal choices the UK has faced outside of pandemics, conflicts and financial crises, according to an IFS report. The IFS said that a combination of high debt interest payments and low expected growth is forecast to make it more difficult to reduce debt as a fraction of national income than in any parliament since at least the 1950s. The think tank also warned that whilst tax rises and cuts for public services are built into current government plans, public services are ‘showing signs of strain‘ and are‘performing less well than they were in 2010’. IFS Director Paul Johnson said: ‘Now more than ever, as a country, we face some big decisions and trade-offs over what we want the state to do and how we’re going to pay for it. Those looking to form the next government should be honest about these trade-offs. ‘If they are promising tax cuts, let’s hear where the spending cuts will fall. […]

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Autumn Statement cuts won’t stop tax revenues rising to highest ever levels

WRLO Accountants — Mon, 04 Dec 2023 12:57:44 +0000

The tax cuts announced in the 2023 Autumn Statement won’t prevent tax revenues rising to their highest ever levels, the Institute for Fiscal Studies (IFS) has warned. The IFS stated that announcing tax cuts in response to ‘highly uncertain’ changes in assumptions about the UK’s medium-term economic prospects ‘does not feel like a recipe for good management of the public finances‘. It also acknowledged that the Chancellor’s cuts to the rates of National Insurance contributions (NICs) put money back into the pockets of 27 million workers. However, it said the bigger picture means that the changes give back less than £1 of every £4 that has been taken away from households through changes to NICs and income tax announced since March 2021. However, the business group did welcome the Chancellor’s decision to make Full Expensing permanent but noted that the move indicates that the Autumn Statement was an event focused on medium-term growth. Paul Johnson, Director of the IFS, said: ‘The growth outlook has weakened. Inflation is expected to stay higher for longer. Higher inflation pushes up tax receipts by more than it pushes up spending on debt interest or social security benefits. ‘His immediate cut to national insurance will […]

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December 2022

WRLO Accountants — Tue, 06 Dec 2022 09:15:44 +0000

In this month’s Enews we consider news from the Autumn Statement, household incomes and business forecasts. We also update you with the latest on auto-enrolment and exports. With information on the Digital Services Tax and advisory fuel rates, there is a lot to update you on. Tax burden rises following Autumn Statement CBI praises Chancellor for ‘delivering stability’ in Autumn Statement IFS warns of fall in household incomes OECD warns UK on course for biggest economic downturn Auto-enrolment has helped workers save £114 billion into pensions UK businesses anticipate growth in exports Digital Services Tax has raised £358 million Advisory fuel rates for company cars Tax burden rises following Autumn Statement The UK’s tax burden will rise after Chancellor Jeremy Hunt reduced the threshold on the top rate of tax and announced freezes on other taxes in the Autumn Statement. The threshold for the top 45% additional rate of income tax was cut to £125,140 from £150,000. The government is also fixing other personal tax thresholds within income tax, NICs and inheritance tax for an additional two years, until April 2028. The Dividend Allowance will be reduced from £2,000 to £1,000 next year and £500 from April 2024. In addition, the capital […]

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