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Brace Yourselves

Less than a month ago, I described the new tax on public sector pensions and cuts in departmental spending as a minibudget.

This month’s minibudget has just been announced, though the full details will not be available for a few weeks.

Early predictions include increased excises on the ‘Old Reliables’ – tobacco, alcohol and fuel – and increases in some or all income tax rates.

Two months in, the government is predicting that the tax take will be down 10% on 2008.

Fuel prices may be hit particularly hard – carbon taxes go down well with the junior coalition partners in the Green party.

In short, the energy price cuts announced today may be shortlived.

Even with the extra costs, the government will still borrow eighteen billion this year.

Taxpayers will take another hit in the official budget in October, after the taxation commission reports.

Already there are mutterings about property taxes, and tax breaks on the lower paid are being rebranded as “40% of our workforce are outside the tax net, where four fifths of all taxpayers pay at a rate of 20%“.

The one untouchable is corporation tax, guaranteed to stay at 12.5%.

Clearly some taxpayers are more equal than others.