Tax system overhaul will be needed to fund NHS, says thinktank

Alicia Farmer
October 31, 2018

Amazon shares were down more than 5 percent Monday.

Netflix and Apple, the others in the so-called FAANG group of stocks, were down 8 percent and 3.6 percent respectively.

Chancellor Philip Hammond reserved his most dramatic Budget announcement yesterday to declare that he would raise the income tax thresholds a year early.

I don't think it's a very good idea.' Some 32 MILLION Britons are in line for a tax cut of up to £860 each after Chancellor speeds up plans to lift thresholds for basic and higher rates Philip Hammond dramatically announced that the basic and higher thresholds are to go up faster than expected as he delivered what could be his last pre-Brexit Budget.

If that happened Hammond would be unlikely to start austerity up again or push sizeable tax increases through parliament, Johnson claimed, and would most likely allow borrowing to "take the strain". The tax will be based on self-assessment by the companies.

The Chancellor said: "We can look confidently to the future and set our course for where this remarkable country will go next".

It said successive governments after the first and second world war had typically raised taxes to respond to higher spending, which was required because of the shock to the economy from war.

Workers whose earnings fall between the Scottish higher rate threshold and the threshold for this in the rest of the United Kingdom would be taxed at 41%, as well as having to pay 12% National Insurance Contributions (NICs), Spice said, noting the employee NICs fall to 2% above the United Kingdom higher rate threshold.

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The changes had been due to come into force in 2020.

"The rules have simply not kept pace with changing business models and it's clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the United Kingdom without paying tax here in respect of that business", said Hammond.

Funnily enough, Hammond decided not to mention that part in his Budget speech, leaving journalists and others to dig around in the small print of the full Budget Red Book to find out that he was taking with one hand after giving with the other. The rules have simply not kept pace with changing business models. "I would be preparing for more hard years ahead".

"Given the dominance of the US tech giants, it is hard to see the Trump administration taking kindly to the digital sales tax as the United Kingdom sets out its stall for the best possible trade deal with the US", Dan Neidle, a tax partner at law firm Clifford Chance told the BBC.

Hammond said on Monday that if a global solution emerges, Britain would consider adopting this instead of its levy.

Sterling showed little reaction to the spending plan that emerged from the chancellor's traditional budget-day red briefcase, while London's FTSE 100 stocks index handed back some of the day's strong gains.

Amazon and Netflix declined to comment.

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