About Income Tax
An income tax is a tax imposed on individuals or entities that varies with respective income or profits. Income tax generally is computed as the product of a tax rate times taxable income. Taxation rates may vary by type or characteristics of the taxpayer. The tax rate may increase as taxable income increases.
Government spending plans 'a very big risk', says watchdog
... While Mr Hunt announced the cut to NI rates, he opted to leave NI and Income Tax thresholds untouched, meaning they remain frozen until 2028...
Autumn Statement: Hunt chose NI cuts over 'crowd-pleasing' tax cuts
...Chancellor Jeremy Hunt has said he rejected making " crowd-pleasing" tax cuts like Income Tax and inheritance tax in his Autumn Statement, in favour of cuts to help grow the economy...
Chris Mason: Three things really matter in Autumn Statement
... " By 2028-29, frozen thresholds result in nearly four million additional workers paying Income Tax, three million more moved to a higher rate and 400,000 more paying the additional rate, " says the OBR...
The hidden tax rise in the Autumn Statement
... While Jeremy Hunt announced a cut in National Insurance (NI) rates, he opted to leave NI and Income Tax thresholds untouched, meaning they remain frozen until 2028...
What the Autumn Statement means for you and your money
... NI works in a similar way to Income Tax, deducting a fixed percentage of the money you earn from your wages...
How much money does the UK government raise and spend each year?
... Where does the government s money come from? About a quarter of the money the government expects to raise this year will come from Income Tax, which people pay on the money they earn...
Hunt does not rule out tax cuts in Autumn Statement
... Chancellor Jeremy Hunt has not ruled out cutting Income Tax in Wednesday s Autumn Statement, as he insisted economic growth was his priority...
Laura Kuenssberg: Reshuffle deals drama but voters more worried about wallets
... There s also the potential political contradiction of while taking much more from millions in Income Tax...
Chris Mason: Three things really matter in Autumn Statement
By Chris MasonPolitical editor, BBC News
Amid The Hurricane of numbers and blizzard of words in the Autumn Statement, just three things really matter: Living standards, the tax burden, and tax cuts.
The government sought to sail The Statement on a breeze of rhetoric about tax cuts, from the Prime Minister down.
And, yes, they were flagged prominently and proudly in Jeremy Hunt 's words.
He acknowledged too - in my interview with Him - His political inheritance: The pandemic, as well as support paying our energy bills that shot up after Russia invaded Ukraine.
Each were huge and rare moments of colossal state intervention which the Conservatives argue were pragmatic, sensible and widely supported ideas - But ones that were going to have deep and long-lasting impacts on The Public finances.
And Then there is the current economic picture, which is sluggish.
Let's take a look at each of those three things I mentioned, in turn.
Firstly, living standards.
Here is what The Office for Budget Responsibility said about them: " Living standards, as measured by real household disposable income per person, are forecast to be 3. 5% lower in 2024-25 than their pre-pandemic level. "
This, the OBR adds, isn't as bad as they had previously forecast (and does underline how forecasts can and do Change - and Change significantly), But " it still represents the largest reduction in Real Living standards since Office for National Statistics records began in the 1950s. "
Graphs and rhetoric, spreadsheets and spin can't alter this.
So What about the tax burden, and tax cuts?
Again, let's look at what the OBR has to say.
The tax cuts will reduce the tax burden, compared to if the tax cuts hadn't happened, as you might expect.
But there's a twist.
" Tax changes in this Autumn Statement reduce the tax burden by 0. 7% of GDP, But it still rises in every year to a post-war high of 37. 7% of GDP by 2028-29. "
GDP is gross domestic product, or national income.
And The Principal reason the tax burden is continuing to grow, albeit at a slower rate, is the thresholds at which people start paying tax on their income, or start paying a higher rate, have been Frozen - as inflation has soared.
So millions of people have been dragged into paying a higher rate of tax, without the government doing anything.
Our economics editor Faisal Islam has written about this.
It prompts an interesting thought about what makes news and what doesn't.
When governments (or opposition parties) choose to Do Something by changing something, like putting up or cutting taxes, that makes news.
But the decision to opt for inaction, rather than Action - which still involves a decision - doesn't so easily make news.
And yet that decision, at repeated Budgets, has a huge impact.
" By 2028-29, Frozen thresholds result in nearly four million additional workers paying Income Tax , three million more moved to a higher rate and 400,000 more paying the additional rate, " says the OBR.
The Higher rate is charged at 40% on income just over £50,000 a year.
The additional rate is charged at 45% on income of a little over £125,000 a year.
All of this provides Labour with an easy target, right now.
But The Most bleak of inheritances if they win The Next general election.
Labour say they agree with the tax cuts in the Autumn Statement and they are not outright rejecting other measures in there either.
And they share a diagnosis with the Conservatives about what is at the root of so many of the UK's contemporary challenges: A lack of growth.
Trying to caffeinate a listless, lethargic economy is what the Autumn Statement is attempting to do.
And the opposition would face the same, grinding challenge in power themselves, if they get the chance.
Related TopicsSource of news: bbc.com
