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
    +1

    Comment number 724.

    This won't improve transparency, it could be summed up as:

    How much tax you paid: Too much
    What was it used for: Subsiding the lifestyles of the wealthy and middle classes, and paying for sky, mobile phones and alcohol and breeding rights for the unemployed

  • rate this
    +1

    Comment number 723.

    Do we really spend more on servicing the debt interest than defence?
    If this is correct it is truly shocking.
    What a mess these idiot politicians have got us into!
    Still it hasnt affected them so no problem then.

  • rate this
    +3

    Comment number 722.

    720. phedro

    yes, we did get some assets in return, but the government just sold off Northern Rock to Virgin for beans, they could have held out and had a successful bank, or sold it for much, much more.

    --

    Sorry, I didn't realise we had a financial wizard in our midsts.

    Read this.

    http://www.independent.co.uk/news/business/news/northern-rock-will-make-the-taxpayer-9bn11bn-7462571.html

  • rate this
    +1

    Comment number 721.

    What exactly does "National interest on debt relief" actually mean?

  • rate this
    -2

    Comment number 720.

    709. rememberdurruti
    Bailing out lame duck banks?
    --
    Hasn't cost the tax payer a penny as Labour borrowed the money to do it and they did get some assets in return.


    yes, we did get some assets in return, but the government just sold off Northern Rock to Virgin for beans, they could have held out and had a successful bank, or sold it for much, much more.

  • rate this
    0

    Comment number 719.

    Hopefully we will also see a break down as below...

    Top 275,000 (over £150K) average £400K income (110Bn)

    Tax Avoidance adds £153K (£42Bn) & Evasion £110K (30Bn)

    That's £6,275 for each working person (29 million)

    12% of this (23Bn) gives 7 Million on minimum wage a living wage & enables them to take part in and help fix the economy & saving benefits

  • rate this
    0

    Comment number 718.

    709. rememberdurruti

    Bailing out lame duck banks?

    --

    Hasn't cost the tax payer a penny as Labour borrowed the money to do it and they did get some assets in return.

    Mind you we are having to pay interest on the money borrowed and that comes under "National interest on debt relief".

  • rate this
    0

    Comment number 717.

    Okay. So to sum up: 1. Of those that think it's a good idea, most are suggesting additional, or more precise, sub-headings. 2. Of those that dismiss the idea, most think the figures will be pogled anyway. 3. Of the remainder that think it's a good idea, most hope it will show up lazy benefits dodgers or the virtues of the private /self-employed sector. As you were, then, Great Britain.

  • Comment number 716.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    0

    Comment number 715.

    Not sure how useful this will be.

    Will it include the national insurance paid by myself and also by my employer on my behalf?

    Will it include council tax ?

    Will it give sufficient breakdowns in each catagory so the information will be of any use?

    Doubt it!

    Sounds like a another public sector non job for someone !

    Don't Waste My Tax Money on this!!

  • rate this
    +1

    Comment number 714.

    700 Your assumption is correct - the dominating figure in welfare spending is in fact the old age pension (not including public sector pensions either) by a very large margin. This is the largest category and largest growth - since unlike everything else it has been protected and enhanced it will only increase pressure of every other area of spending.

  • rate this
    0

    Comment number 713.

    674.SeeDubya

    "the figures attributed to HM Treasury don't add up. The total for a £50,000 earner is given as £14,183 but the numbers in that column add up to £14,913.
    Presumably the "other" figure has been massaged downwards. . ."

    Actually looks like it's been massaged upwards: the £50k guy pays around 2½ x the £25k guy for everything else and 3x as much for "other"

  • rate this
    +3

    Comment number 712.

    I'm all for information and transparancy, but only if we have the ability to use that information to change our circumstances.

    So will the government give us the option to change the % given to sectors or an opt-out.

    Now that would be worth having!!!

  • rate this
    +4

    Comment number 711.

    On Welfare - what proportion of this is the administration of the incredibly complex system and what proportion actually gets given to people? Of the proportion given to actual people how does this break down into different categories? Without that kind of breakdown these numbers would be at best useless and at worst a form of propaganda.

  • 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
    +2

    Comment number 709.

    Bailing out lame duck banks?

  • rate this
    +1

    Comment number 708.

    Please someone on here start a list of legitimate tax avoidance measures.

  • rate this
    +14

    Comment number 707.

    This is yet another sneaky ruse designed to marginalise & direct anger against the poor & disabled. We're in the midst of an undisguised war against the poor being waged by the wealthy. It sickens me. Before anyone decides to accuse me of being in receipt of benefits; I'm a 50% tax payer, have been so even during the really punitive tax years and I'm happy to contribute to society & it's people

  • rate this
    -5

    Comment number 706.

    696. Paul

    True, but I have a feeling that there are certain instruments used to avoid the tax legally.

    Having said that, if someone chooses to send their offspring to private education instead of using the state, then there should be a certain tax rebate, for not using the state system. The same should go for health.

    There would have to be conditions and limits imposed to prevent abuse.

  • rate this
    +4

    Comment number 705.

    I'd like my statement to include a few other items:

    The cost of Trident - per tax payer
    The cost of reorganisations reviews and quangos dedicated to increasing the profits of private companies.
    A figure for the increased cost of PFI road network per mile
    The amount of tax per tax payer avoided through murky scams

    Oh yeah, and the point of Pickles.

 

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