Pre-budget briefing: Taxation
In advance of the 2017 Budget, the UK Women’s Budget Group has written a briefing on the impact of changes in taxation policy on women and on the funding of public services and investment.
Key points from the briefing:
- Income tax cuts benefit men disproportionately more than women because women earn less than men and rely more on public services that tax revenues fund.
- Successive increases in the personal tax allowance and higher rate threshold (implemented since 2010 and planned ahead till 2020) will cost the Treasury £19bn per annum by 2020.
- The Women’s Budget Group welcomes the Chancellor’ promise in AFS 2016 to consult on ways to ensure that the taxation of different ways of working is fair between different individuals while sustaining the tax base as the economy undergoes rapid change.
- The Women’s Budget Group calls on the Chancellor to abolish salary sacrifice schemes and other forms of income tax allowances to incentivise behaviour, which are unfair to those earning below the tax threshold, and instead use the revenue to invest in relevant public services.
- Inheritance tax should be used more forcefully to reduce wealth inequalities and therefore taxing receipts progressively within the income tax system should be pursued, rather than taxing bequests separately.
- Successive cuts to fuel and alcohol duties and corporation tax rates also benefit men disproportionately and together cost a total of £22bn per annum by 2020; these are short-termist and populist cuts whose foregone revenue could instead be invested in long-term social infrastructure. Social care, for example, would need £14bn per annum by 2025 to be provided free to older people with critical or substantial needs in England.
- Cuts to central government funding of Local Authorities should be reversed as unfair and ineffective in delivering adequate public services, given that poorer LAs can raise less money but need to fund greater use of vital services. Women stand to lose most from this inequality as they often live on lower incomes and are more reliant on those services (as employees or users).
Download full briefing here