How things change...

And while corporation tax was only major tax lever left after manifesto commitments, it is striking how argument made at successive elections completely turned on its head... ie continuing this chart with ydays OBR numbers takes it to 25% and £82bn from 2024 Image
...such commitments were not made ahead of the 2019 election, that contained the cancellation of the further planned cut from 19p to 17p...

Will be interesting to see if future manifestos preemptively preclude main tax rate rises, even in clear emergencies like a global pandemic
IFS warning that uncertainties around pandemic, the squeeze on spending, the speed of bounce back points to possible further tax rises - if Chancellors current balance budget principle to be met. where do they come from, if needed?
IFS: 4.5 million UC claimants face a £80 cut in monthly income in October (obviously the news yesterday was that it had been extended until then... )
IFS: 11% of adults will pay higher rate tax - 1 in 6 taxpayers, after threshold freeze... IFS says raising income tax rates would have been more progressive than freezing thresholds, but it is progressive - ie helps lower income more than high income
IFS points out that Chancellor if he wants to avoid corporation tax on banks hitting 33%, will have to find the money to change the Bank Surcharge Image
Assumption that 17bn raised from corporation tax hike per year to 25p does assume some profit shifting out of UK, but no hit to investment. IFS concludes long run yield will be lower...
Super Deduction is massive policy:

IFS point out it will subsidise some otherwise non economic investment in plant and machinery. And mainly bring it forward into the next two years, creating a hangover later...

But why not intangibles, human capital etc...
Super deduction effectively a massive corporation tax cut for those investing in plant and machinery, which for 2 years gives one of main benefits of freeports to whole country, takes C-tax take down about 0.5% of GDP to 1.7%..before subsequently goes, then C-tax leap to 3.2% GDP

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Faisal Islam

Faisal Islam Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @faisalislam

5 Mar
So the process on the NHS pay round should be this...

This 1% is the Government’s submission into the Pay Review Body process - others have made other submissions from £2k bonus to 15%...

Pay Review Body will report back in May.

Govt will then choose whether to accept or not Image
Government’s decision will rest on several factors - the 1% number is a reference to what is deemed affordable within current NHS budgets. Other factors play into the decision, chiefly recruitment and retention..
- this is the full NHSPRB Govt evidence:
assets.publishing.service.gov.uk/government/upl…
Govt also published Doctors and dentists evidence...

There is lots of very interesting information on trends particularly on the increasing reliance of NHS on non UK staff, and eg levels of sickness absence during pandemic:

assets.publishing.service.gov.uk/government/upl…
Read 6 tweets
3 Mar
Budget...
Chancellor Sunak: “What was originally thought to be a temporary disruption to our way of life has fundamentally altered it” - temporary disruption is a quote from the last Budget
Sunak: “It’s going to take this country – and the whole world – a long time to recover from this extraordinary economic situation. But we will recover.”
Chancellor “todays forecasts show our response to Coronavirus is working”....

OBR is predicting a swifter and more sustained recovery - returns to pre pandemic level middle of next year, Sox months earlier than expected...
Read 23 tweets
26 Feb
Understand Chancellor & PM met yesterday on subject of Freeports ahead of Budget

Applicants expecting announcement at next week’s Budget, after relatively quick process.

Locations to get tax breaks on biz rates, capital allowances, NI, as well as operating before customs border
Around two to three dozen applicants from ports (sea and air) were received by the deadline this month. Govt want to get them going this year.

Not mainly a Brexit thing (indeed one of the most famous examples is the art/ wine storehouse in Luxembourg, which HMT don’t want to do)
The other issue is displacement - will these facilities merely shift production within the country from non free ports. As Tees Mayor Houchen just told Nick, they have to be concentrated in specific product areas.

This issue will weigh heavily tho , particularly re rejected bids
Read 4 tweets
25 Feb
Following the confirmation hearing of the US Trade Rep Katherine Tai ... no mention of doing new trade deals in her opening statement: ustr.gov/about-us/polic…
Asked about whether US would get into TPP Tai did not make it sound a priority saying that 2021 is not 2015/16
NEW Biden’s US Trade Rep designate Tai says she would want to “review” US and UK trade talks in light of UKs deals with EU and new post pandemic economic situation... suggests the original objectives might be reviewed. Doesn’t sound quick.
Read 4 tweets
25 Feb
New numbers on furlough released - in January up to 4.7m from 4m. Also though evidence of a rather different second wave lockdown than last April... (peak 9m) gov.uk/government/sta…
This shows the pattern of which workers by sector are on furlough now and aren’t now versus were in first lockdown...

Significant increase in past month in retail/ wholesale, but half levels of last April... construction, manufacturing use of furlough have not gone up in Jan
On the link at the top there are some v interesting breakdowns by region, company size, gender (more women furloughed) and age... but this is very interesting - the 1m rise in furlough this year, 2nd lockdown has been in full furlough, not part time/ flexible furlough:
Read 5 tweets
19 Feb
G7 conference call chaired by PM - with President Biden and new Italian PM Mario Draghi - all looks rather different to last one... as usual EU there repped by VDL and Michel, in addition to the “7”.
G7 leaders promise to “build back better for all” and commits to “levelling up our economies so that no geographic region or person, irrespective of gender or ethnicity, is left behind”.. and support Tokyo Olympics as a symbol of post Covid global unity

g7uk.org/joint-statemen…
Also G7 promises to:
-strengthen WHO, fund Covax $7.5bn
- explore global health treaty
-‘continue to support our economies to protect jobs/recovery’ (NB no mention of public finances)
-debt relief for pandemic afflicted poorer countries
-net zero by 2050
- digital tax by mid 2021
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!