Did Labor mislead the British public over the budget?

Unlock Editor's Digest for free

FT editor-in-chief Roula Khalaf picks her favorite articles from this week's newsletter.

Rachel Reeves was adamant. During a visit to Washington in May last year, she told the FT she had no plans to become prime minister to raise big taxes.

But on Wednesday, the prime minister announced a budget that would see $40 billion in tax increases, the biggest in a generation.

She argues that Labor discovered a black hole in public finances after it entered government, giving it greater freedom to go beyond its manifesto promises to raise small and niche taxes on the oil and gas industry, private equity, private schools and non-governmental organizations. do. .

In many areas, from national insurance to inheritance tax, the budget broke previous promises or guarantees.

financial rules

In November 2023, Reeves told Bloomberg that he had no intention of changing the fiscal rules that apply to the Treasury. When asked if she could borrow more money using a less difficult debt target, she responded that she wouldn't manipulate the numbers or create something to get a different result. She added: We will use the same model that the government uses.

She said the same just weeks before the election and told the FT in June that she would adopt the same definition of national debt as the previous government.

But on Wednesday the Prime Minister confirmed his move to target public sector net financial debt (PSNFL) as a measure of the national debt in a move designed to free up billions of pounds for long-term investment.

national insurance

Labor's manifesto states very clearly that the party will not increase national insurance.

In May, Reeves claimed: If we win the election we will not increase income tax or national insurance.

It was not until August, after the general election, that Chancellor of the Exchequer Darren Jones began to subtly change the language of the pledge.

Jones said several tax measures should be considered in the October 30 budget while honoring his promise to the public not to increase income tax, employee national insurance or VAT, adding a staff caveat not in the manifesto.

Reeves on Wednesday raised the employer NIC by 1.2 percentage points to 15% and lowered the threshold at which employers start paying tax from 9,100 to 5,000 from April next year. This measure will raise $25 billion a year until the end of the OBR forecast period.

capital gains tax

Early last year Reeves signaled that a Labor government would not manipulate capital gains tax.

Asked on BBC Radio 4's Today program in March 2023 whether Labor would raise CGT, she said: I have no plans to increase capital gains taxes.

People who start their own businesses may want to sell them when they retire, she said. We want the UK to be the best place to start and grow a business.

Reeves announced on Wednesday that CGT on most assets, including share sales, would rise from 10% to 18% for low-rate taxpayers.

For higher earners, CGT increases from 20% to 24%. There have been some splits, with rates paid on second homes remaining at existing levels of 18% and 24%.

Relief from disposal of business assets

In September 2023, the Times reported that Labor was planning to abolish or scale back business asset disposal relief, which allows people who own more than 5% of a company to sell their shares at a rate of just 10% more than usual. 20% CGT.

A Reeves adviser told the FT Labor had no such plans.

But on Wednesday the Prime Minister announced that the CGT rate for entrepreneurs selling shares in a company would rise to 14% in April 2025 and to 18% a year later.

Inheritance tax loopholes for stocks and companies

In 2023, Labor is said to be considering ending the Inheritance Tax Business Relief, which exempts shares in unlisted companies or significant stakes in companies from inheritance tax.

At the time, Labor denied there were any such plans.

Reeves announced on Wednesday that corporate IHT relief for Aim listed shares would be cut and sellers would have to pay 20% tax. She said the company's heirs would pay IHT at 20%, above the initial threshold of $1 million.

Inheritance tax farmland loophole

In 2023, Labor has denied rumors it would end the inheritance tax exemption for investments in farmland regularly used by the super-rich.

Steve Reed, then the shadow environment secretary, told a conference of the Rural Land and Business Association that Labor had ruled out scrapping relief payments for farmers.

Asked whether Labor intended to remove the tax relief, Reed said: “We have no intention of doing so and we have no intention of changing the APR.”

On Wednesday, Reeves announced that transfers of farmland worth more than $1 million initially would be subject to a 20% estate tax.

The Treasury said Wednesday night: The budget delivers on manifesto promises not to raise taxes on workers and promises to introduce strong fiscal rules and invest to grow the economy.

Meanwhile, difficult decisions have also been made to repair the 22 billion black hole this Government has inherited, and as the Prime Minister said, these have included decisions she did not expect or want to make.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos