Brown’s spending forces delay to 'tax freedom'

UK workers are breathing a sigh of relief after working three days longer this year to reach Tax Freedom Day – the calendar event when hard-working Brits finally pay off their annual tax bill.

Yesterday’s landmark achievement for workers and small businesses fell later this year because of Gordon Brown’s lavish public spending, mixing with national insurance and council tax rises.

As a result, last year’s tax freedom date of May 27 was missed, and extended to May 31 (this year) so that taxpayers could put in the extra to pay Brown’s bill.

According to experts at the Adam Smith Institute, the Chancellor’s £450bn annual spend has effectively pocketed every penny earned by Brits for five full months.

They said his controversial strategy of freezing tax thresholds amid a growing economy has translated into raising more revenue, with an expected 11 per cent increase filling the Exchequers coffers than was retrieved a year ago.

If tax cuts fail to be implemented, as called for by the IFS and other leading economists, then tax freedom day next year is likely to be pushed out until June 2. By 2009, experts expect it is likely to fall on June 7.

More positively, taxpayers have been advised to use the event as a starting pistol to shape up their tax affairs in order to make significant savings.

PricewaterHouseCoopers is one such adviser suggesting hard-working Brits should examine the tax breaks they have available, through capital gains allowances, inheritance tax schemes and Isas.

Shrewd taxpayers can also top up pension pots and transfer savings accounts to non-tax paying spouses.

According to figures from IFA Promotion, British adults waste £113m every year by failing to transfer funds.

Meanwhile, self-assessors failing to meet the Inland Revenue deadline for returning tax forms waste about £418m a year.



 

1st June 2005

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