Chancellor George Osborne to reveal taxpayers' spending statement

 
Example new HMRC statement An example of how the new style of statement will display the way tax income is spent

Chancellor George Osborne is to set out plans in the Budget to give 20 million people a detailed breakdown of how their taxes are spent.

The plan, to be introduced in 2014, will set out how much people pay in direct taxes such as national insurance and income tax, outlining proportions used for education, health and welfare.

A Treasury source said it was "right" that people knew how taxes were spent.

It is part of attempts by ministers to make the tax system more transparent.

For example, someone earning just over £25,000 would pay £5,700 in direct taxes. Of that, more than £1,900 would go on welfare and pension payments, nearly £1,000 on health and £750 on education.

And £360 - some 6% - would go on national debt repayments.

The statement will not take account of indirect taxes such as VAT and fuel duty, although ministers are planning an online calculator to show people how much of these taxes they are paying too.

In November, Exchequer Secretary David Gauke announced the government's vision for greater tax transparency.

Speaking at the launch event, he said: "At the moment, for a lot of people, the tax line on their payslip is the only time they see just how much they're paying in tax, but the government doesn't think that's good enough.

"We want to make tax more transparent and we want people to be more engaged with their own tax affairs."

John Whiting, from the Chartered Institute of Taxation, welcomed the idea, saying that while HMRC and the government were responsible for running the tax system, people needed to take some responsibility in their own tax position.

"Of course there are lot of issues," he added, "For example, linking systems together, setting up help systems for people to sort out queries, managing confidentiality issues.

"But these should be soluble and shouldn't stop the idea being taken forward."

Where does your tax go?

Salary £15,000 £25,000 £50,000

Source: HM Treasury

Welfare

£812.71

£1,900.71

£4,727.67

Health

£424.55

£992.91

£2,469.68

Education

£317.80

£743.26

£1,848.73

National interest on debt relief

£155.26

£363.12

£903.20

Defence

£140.71

£329.08

£818.52

Police

£65.50

£153.19

£381.04

Overseas aid

£24.26

£56.74

£141.12

European Union

£12.13

£28.37

£70.56

Other

£485.20

£1,134.74

£2,822.48

Tax total

£2,438.12

£5,702.12

£14,183.00

 

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Budget 2012

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  • rate this
    0

    Comment number 710.

    I think it is a great idea but the figures should be broken down further still to seperate things like state pensions from unemployment beneift and housing benefit etc so we can see how expensive our current generous benefits system is for each person paying tax. It may increase the appetite for change away from the culture of allowing people to live forvever on state handouts.

  • rate this
    +76

    Comment number 401.

    Put the data online and be done with it.
    1. Publish once - data consumed by millions
    2. A small team is all that's required to create the content.
    3. No burgeoning bureaucracy.
    Also give a breakdown of how our 'road tax' and tax on our motoring insurance premiums are spent. I am not naive enough to hope for this level of transparency.
    The hole in my thinking; trusting the source of the data.

  • rate this
    +9

    Comment number 294.

    A good idea generally but it would be best to have categories like 'Welfare and Pensions' broken down into how much is spent on administration and how much in actual welfare and pension payments. This is the positive step towards increasing productivity in society.

  • rate this
    +24

    Comment number 292.

    The devil is in the detail. It's one thing to get a figure for, say '"Welfare & Pensions" - but that doesn't reveal where each slice of that big chunk of money goes. Some will assume that most of it goes to 'scroungers'. Others will insist that most of it goes to the needy. With no detail, both sets of prejudices will run unchecked.

  • rate this
    +18

    Comment number 173.

    If the government dips its hand into my pocket and takes my money and spend it on my behalf, then I think I have a right to know where my taxes are being spent on my "behalf"...

    Linking what we pay to what we get back for it is a first step to assesing whether or not we think it is worth it ...

    Why would anyone think, that tax payers knowing where their money is spent is anything but a good?

 

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