Treasury

After today’s VAT changes: a) If you walked into a pasty shop and bought a pasty that has been kept hot in a cabinet (or in foil, or on a hot plate, or whatever), then you WOULD pay VAT. b) If instead that pasty had come straight out of the oven, then you WOULD NOT pay VAT. c) If the pasty was cold, or had been left to cool, you WOULD NOT pay VAT. d) If the pasty was cold, and then reheated in an oven or microwave before being handed over, then you WOULD pay VAT. e) If the pasty was being kept hot in a cabinet when you

Recently on Coffee House, and elsewhere, some people have been arguing that the deficit reduction isn’t happening fast enough. The latest, a paper from Tullet Prebon, argues that it’s wrong to say there are cuts. Its author, Dr Tim Morgan, reiterated its points on the Today Programme this morning. But it isn’t true — and the analysis itself proves it.   When this Government entered office, there was no credible plan to convince the bond markets that Britain was serious about dealing with its debts. So the new Coalition accelerated the pace at which the structural deficit was to be eliminated.   Some on the right and left disagree with

‘The smell would be even worse’, says Zoe, the social worker I’m shadowing for the week, ‘were it not for the clothes.’ Trying not to touch or breathe, I survey the mounds of sweaters and jeans and dresses interspersed across the bare floorboards. The place is a disaster — junk everywhere, filling the shelves, piling up the surfaces; the sound of broken taps from the kitchen; the living room a living ruin. I’m on a housing estate in one of the Home Counties and we’ve been called out to see about putting in place a ‘preventative measure’ for Mrs R, a 90 year-old woman at risk of falls. Not having

Exactly two years ago today, David Cameron launched the Conservative Manifesto — one of those rare moments in the Tory campaign where it all seemed to make sense. Cameron begged for a hearing: he was serious, he said, about changing government. It was about realizing that ‘Big Government isn’t the answer to the problems’ and that people outside government — like charities — were. This is why the charities debacle today is not just another Budget blunder. As I say in my Telegraph column, if Cameron tolerates the taxman’s proposed assault on philanthropy, he’ll be admitting defeat on what he described that day as his ‘fundamental tenet’. The best-paid 1

So, George Osborne has taken a look at the tax arrangements of some of the UK’s wealthiest people. And his reaction? ‘Shocked’, apparently — or so he’s told the Telegraph: ‘I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right. I’m talking about people right at the top. I’m talking about people with incomes of many millions of pounds a year. The general principle is that people should pay income tax and that includes people

George Osborne’s announcement that the Treasury is going to start looking at the dynamic effect of tax changes is significant. The aim, I understand, is for them to gather data on this which could then be used to work out the costs of various tax and spending changes. This would mean that most tax cuts would, in the Budget Red Book, cost the government less. The decision, though, about what system to use is no longer in the Treasury’s hands. The independent Office for Budget Responsibility now does all forecasts and policy costings so the decision on what model to use ultimately rests with them. Osborne made this announcement in

Will the Budget make a difference? Nowadays, we have a quick and easy guide: Box 3.1 from the Office for Budget Responsibility — otherwise known as the ‘blind bit of difference’ test. Sure, Budgets can make your hot takeaway lunch 20 per cent more expensive and your cigarettes cost £7.50 a packet, but the question, in a recession, is whether any stardust can be found between its pages. Whether it will be do anything for jobs, the deficit or economic growth. The Budget nowadays is handed to the OBR in advance of publication and assessed for its impact on the economy. The verdict: speeding up the corporation tax cut (another welcome move, and brave