Why has spending gone up and tax revenue gone down if lots more work?

[Cyclone]

This is true, I don't work and I don't claim anything.

 

The employment figures are massaged and sexed up to a point where they are essentially a fantasy.

The tax take is lower for quite a few reasons, higher low tax threshold, lower high tax threshold, child/working tax credits, hmrc cuts & inability to make corporations pay their dues likewise wealthy folks. The economic crisis leading to reduced mortgage take up, fewer people moving round the property ladder, less building & construction. More people on low hours so not breaking tax threshold. People are generally being a little more cautious with their spending it seems, so vat take is lower..

 

The list of reasons is massive.

 

The OP is specifically talking about income tax though, not VAT, not stamp duty, not corporation tax, etc...

[Janus]

In a chart (from Titanic link), the figures for government income appear to have increased year on year. Here are the last 5 years (the chart goes further back).

 

2010: 510 billion pound

2011: 555 billion pound

2012: 577 billion pound

2013: 593 billion pound

2014: 620 billion pound

2015: 648 billion pound

 

I haven’t seen figures for expenditure, but they may be on that site somewhere.

[ubermaus]

Tax allowances have been increased, for the bottom allowance quite significantly. This might go part way to explaining the very small drop in income tax revenue. Although it's probably a combination of the other factors that people have been mentioning, job share, zero hours, lower pay on average, etc...

 

Re:welfare, that includes a lot of social care and pension payments, as we live longer the pension bill, the care bill and the cost to the NHS is only ever going to increase.

 

---------- Post added 13-03-2015 at 08:20 ----------

 

 

Out of work benefits are a pretty small fraction of the figure you mentioned at the start.

 

---------- Post added 13-03-2015 at 08:21 ----------

 

 

Are you busy making things up again Mecky. Next you'll be telling us that the economy has halved.

 

You are pretty spot on here. They did raise the tax threshold for low income which obv impacts on the ability to raise tax from this band.

 

At least low income do in theory have a little bit money to spend in the economy.

 

---------- Post added 13-03-2015 at 14:08 ----------

 

Saying that, its all a fudge...the figures are massaged. Saying 'we've cut unemployment' is true and all well and good but only about 5% of the story.

[Cyclone]

This question is baffling me as we approach the Election.

 

The Government probably quite legitimately claims there are millions more people in work than when they came to power yet the figures from their own department show the following:

 

Welfare spending has increased from 99 to 112 Billion

Income Tax revenue has gone down from 202.9 to 202.5 Billion

 

So how can this be, surely the logical assumption would be more people in work then less spent on Benefit and more received in taxation.

 

I suppose the obvious answer is the jobs are very low hours and low paid, and/or we are having to retire much later so people are still working that would previously have been retired.

 

Without wishing to doubt their figures, how can this anomaly be explained?

 

I've tried to find some source for these figures, but this is the best I've come up with;

 

Income tax is an annual tax on individuals’ income arising in a given tax year

(6th April to the 5th April the following year). It is the UK Government’s largest

single source of tax revenue, with income tax receipts net of tax credits

contributing £157.8 billion to total current receipts of £622.3 billion in 2013-14

from

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/403272/Income_Tax_Liabilities_Statistics_-_February_2015.pdf

 

13 - 14 being the last completed tax year of course.

 

And the most recent historical one saying

 

Income tax is an annual tax on individuals’ income arising in a given tax year

(6th April to the 5th April the following year). It is the UK Government’s largest

single source of tax revenue, with income tax receipts net of tax credits

contributing £152 billion

 

That's 12 to 13 from this document

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/403305/Income_Tax_Liabilities_Statistics_-_April_2014_final.pdf

 

And it appears to contradict what the OP is claiming, as income tax NET of tax credits has increased by 5.8 billion from 12/13 to 13/14.

[truman]

They are in here!

 

http://www.ukpublicrevenue.co.uk/total_revenue_2014UKbn

 

So it's not just income tax.. there's capital tax in there as well...it doesn't split them up...how do you know income tax receipts are down? Genuine question..

[Titanic99]

I've tried to find some source for these figures, but this is the best I've come up with;

 

 

from

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/403272/Income_Tax_Liabilities_Statistics_-_February_2015.pdf

 

13 - 14 being the last completed tax year of course.

 

And the most recent historical one saying

 

 

 

That's 12 to 13 from this document

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/403305/Income_Tax_Liabilities_Statistics_-_April_2014_final.pdf

 

And it appears to contradict what the OP is claiming, as income tax NET of tax credits has increased by 5.8 billion from 12/13 to 13/14.

 

HEre's the link again for Government revenue

 

Income and Capital taxes 2009 £202.9 Billion 2014 202.5 Billion

 

It seemed to peak back in 2008 at £210.9 Billion

 

http://www.ukpublicrevenue.co.uk/total_revenue_2008UKbn

 

---------- Post added 13-03-2015 at 21:36 ----------

 

So it's not just income tax.. there's capital tax in there as well...it doesn't split them up...how do you know income tax receipts are down? Genuine question..

 

True, I would suspect that Income Tax makes the bulk of that figure up though.

[psynuk]

If your only looking at those two things; unemployment and income tax figures your never going to get a satisfactory answer.

The income tax take is apparently lower because the income tax rules/thresholds have been messed about with as have the employment stats.

 

also, for instance, If I'm on benefits (JSA) claiming the full range available then get a job of 30 hours pw but it pays min wage I'll not be contributing anything to the income tax take, and may even cause a higher benefit bill due to working/child tax credits.

 

On the opposite end of the scale theres a lot of people being paid a nominal wage and taking their income from dividends/shares etc which helps remove them from the income tax take.

 

There's thousands of permutations of these examples, but to look at those two stats in isolation is fairly pointless as one of them is completely untrustworthy and the other is provided by the same folks that provided the latter.

[truman]

If your only looking at those two things; unemployment and income tax figures your never going to get a satisfactory answer.

The income tax take is apparently lower because the income tax rules/thresholds have been messed about with as have the employment stats.

 

also, for instance, If I'm on benefits (JSA) claiming the full range available then get a job of 30 hours pw but it pays min wage I'll not be contributing anything to the income tax take, and may even cause a higher benefit bill due to working/child tax credits.

 

On the opposite end of the scale theres a lot of people being paid a nominal wage and taking their income from dividends/shares etc which helps remove them from the income tax take.

 

There's thousands of permutations of these examples, but to look at those two stats in isolation is fairly pointless as one of them is completely untrustworthy and the other is provided by the same folks that provided the latter.

 

The figure Titanic quotes also includes Capital tax..ie tax on selling assets etc..it could be that it is this section that has fallen and not income tax...

[tzijlstra]

People are still forgetting the 5p taxcut for the highest earners, so I will repeat, the highest earners are the biggest contributors to the income tax, lowering their taxes has taken a chunk out of the income tax revenue for the state.

[Titanic99]

If your only looking at those two things; unemployment and income tax figures your never going to get a satisfactory answer.

The income tax take is apparently lower because the income tax rules/thresholds have been messed about with as have the employment stats.

 

also, for instance, If I'm on benefits (JSA) claiming the full range available then get a job of 30 hours pw but it pays min wage I'll not be contributing anything to the income tax take, and may even cause a higher benefit bill due to working/child tax credits.

 

On the opposite end of the scale theres a lot of people being paid a nominal wage and taking their income from dividends/shares etc which helps remove them from the income tax take.

 

There's thousands of permutations of these examples, but to look at those two stats in isolation is fairly pointless as one of them is completely untrustworthy and the other is provided by the same folks that provided the latter.

 

I can see your point of view in people going into low paid jobs and paying no tax. However, I can assure you 100% they don't continue to receive full Benefit when this happens so I'd believe it very reasonable to assume that if there are 2 million more people in work, then the Benefit bill should have reduced.