Chancellor hits tech giants in the pocket

Desiree Steele
November 4, 2018

Scottish Liberal Democrat leader Willie Rennie said: "With Brexit threatening living standards across the United Kingdom the Chancellor has neither ended austerity nor addressed the fundamental problems in the economy".

Setting out his income tax cuts, Mr Hammond said the personal allowance will rise to £12,500 and the higher rate threshold will rise to £50,000, both from April 2019.

John McDonnell has said Labour would vote for a Brexit deal if it "protects jobs and the economy" as he tried to argue that his party's position was in line with what British business wanted.

The analysis by the thinktank (pdf) found that welfare cuts would continue to affect the poorest households, despite Hammond's announcement that austerity was coming to an end.

While total spending, including the effect of inflation, is set to rise, spending as a fraction of national income will fall slightly.

"Mr Hammond said it would put "£130 in the pocket of a typical basic rate taxpayer".

The measures include £1 billion over five years to help the transition on to the new system and a £1,000 increase in the amount people can earn before losing benefits at a cost of up to £1.7 billion a year.

Britain's finance minister Philip Hammond called out on tech companies in his annual budget speech, saying that it is not "sustainable" or "fair" for digital platform businesses to generate income in the United Kingdom without paying the appropriate amount of taxes. The chancellor added that the new tariff will not be an online sales tax levied on consumers.

"When we first said it in the summer we suggested we might have to raise taxes, we would have to raise taxes, to fund part of that".

"The reality of today's budget is that Scotland continues to be hit by United Kingdom austerity and the decision to leave the EU".

"But what the OBR gives the OBR can take away". With a no-deal Brexit looking increasingly likely, the United Kingdom needs to attract new investment into the economy and build relationships with trade partners.

The chancellor was able to promise more spending in his budget after forecasts for tax collection were raised, the Institute for Fiscal Studies said.

Budget documents published this afternoon show that, after raising an initial £5m in 2019/20, in the 20201/21 year the tax is expected to generate revenues of £275m.

Theresa May has insisted austerity is ending after Jeremy Corbyn claimed public services will suffer hardship for years to come following the Budget.

The tax will be "narrowly targeted at United Kingdom revenues" gained through those models, he added.

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