Latest news with #stealthtax
Telegraph
21-07-2025
- Business
- Telegraph
Exposed: The councils quietly raising tax by more than 300pc
Voters in rural England are being hit with a 'local stealth tax' which has seen parish and town council levies quadruple overnight. Across the country, householders are facing huge increases in the amount parishes are charging because cash-strapped district councils are stopping funding services they have run for years. This means parish councils are forced to step in and provide these services, which include vital amenities such as public toilets and parks. But while the amount that districts can increase council tax is capped, there is no cap for parish councils, meaning some areas have seen eye-watering increases. In April, a total of 11 parishes increased their council tax precepts by more than 300 per cent. In Waverley, South Yorkshire, it rose from £63.47 a year in 2023-24 to £288.46 in 2024-25. The highest parish council tax increase was Wharton in Westmorland, where the precept went up by 1,783 per cent from £1.67 to £31.45. Elliot Keck, head of campaigns at the TaxPayers' Alliance, said councils were devolving services such as public toilets and CCTV because they could no longer afford to fund them without breaching the council tax cap. He said the government should impose a cap on parish council tax increases, just as there is for higher bodies. 'Parish precepts are set to be just the latest stealth tax squeezing household budgets, if funding pressures in local government continue,' he said. 'Most town councils are uncontroversial bodies, operating important amenities for what is a small charge on top of council tax bills. But more and more, we are seeing local taxpayers hit by extraordinary hikes in what they're charging, on top of increases at the other levels of local government. 'The government should be consulting on a referendum cap to be placed on parish precept rises to ensure residents aren't hit by surprise bills which they had no say on.' The charge made by parish and town councils – the lowest tier of local government – is added as a 'precept' onto the district's council tax bills. County and unitary councils have their bills capped at 5 per cent, while districts cannot increase their bills by more than 3 per cent. But there is no cap for parish and town councils, which provide services such as allotments, village halls, parks, litter bins and public toilets. In Somerset, cost-cutting measures have led to sharp increases in parish council precepts. Facing £35 million in budget cuts, the county council announced the devolution of services to town and parish councils. They withdrew funding for public toilets, CCTV, visitor centres and other local amenities and asked parish councils to cover the costs. Yeovil parish council precept rose 90 per cent from £145 to £276, and Taunton's by 173 per cent from £110 to £299 in 2024-25. Meanwhile, Somerset Council increased their council tax, excluding parish precept, by 4.99 per cent in 2024-25. Similar cuts were made by Wiltshire in 2019. It had to make £27 million in savings, forcing Chippenham parish council to take on services and increase its parish precept by 40 per cent. These services included a large historic park, a community and arts centre and some small play areas. The parish also took on more road sweeping duties. Chippenham was forced to institute a parish precept rise of 38 per cent in 2019-20. Shadow communities secretary Kevin Hollinrake said: 'The Labour Government is forcing up council tax across the board through their fiddled funding. 'Parish councils have had no compensation at all from Rachel Reeves's job tax, leading to a double whammy of soaring council tax on top. 'Labour's flawed plans for top-down unitary restructuring also threaten to lead to cost shunting from the old councils down to parish level, cooked up in Whitehall but with town and parish councils to take the blame.' A spokesman for the Wharton parish council said its increase was so high because of an administrative error the year before.
The Sun
13-07-2025
- Business
- The Sun
Angela Rayner's costly employment rights package is a ‘stealth tax on workers,' report finds
DEPUTY PM Angela Rayner's costly package of employment rights is a stealth tax on workers, a report has claimed. The measures, which could cost firms £5billion a year, will be passed on to staff through smaller pay rises and hidden taxes which reduce wages over time, the Institute of Economic Affairs said. Report author Professor JR Shackleton said: 'Politicians love to announce new employment 'rights ' because they think employers pay the bill – but that's an illusion. 'Every mandate, from parental leave to holiday entitlements, acts like a stealth tax that gets passed back to workers through smaller pay rises than they would otherwise receive. 'The only difference is that no money is raised for the Exchequer. ' The Employment Rights Bill will make this much worse, imposing billions in hidden costs that workers will ultimately bear themselves." Shadow Business Secretary Andrew Griffith said: 'This socialist government doesn't understand business but must listen to those who do.' A Government spokesperson insisted: 'Too many workers are trapped in insecure, low paid work, with weak protections that are poorly enforced. 'Through our transformative Plan for Change, this Government will deliver the biggest upgrade to workers' rights in a generation, contributing to economic growth, and our measures have strong support from businesses and the public.' The legislation returns to Parliament today as Peers scrutinise the legislation at the report stage. Angela Rayner says lifting 2-child benefit cap not 'silver bullet' for ending poverty after demanding cuts for millions 1
Telegraph
13-07-2025
- Business
- Telegraph
Rayner's employment law forcing ‘stealth tax' on workers
's employment law reforms will act as a £5 billion 'stealth tax' on workers, a report has warned. The Deputy Prime Minister is planning a raft of reforms that will make it easier for workers to strike and introduce new 'day-one' rights against unfair dismissal and zero-hours contracts. But they will also work to suppress wages, effectively taxing employees by increasing costs for their bosses, according to analysis by the Institute of Economic Affairs (IEA). The think tank said smaller pay rises will equate to a £5 billion 'stealth payroll tax', based on the Government's own impact assessment of the cost on workers. Business groups have already raised the alarm over the reforms, which they say will make firms more reluctant to hire workers. The Employment Rights Bill, which returns to the Commons on Monday, contains measures to make it easier for workers to form unions and launch strike action. Andrew Griffith, the shadow business secretary, said they would result in 1970s-style union militancy and hammer struggling businesses. 'Labour's love-in with the unions is dragging Britain back to the worst economic mistakes of the 1970s,' he said. 'The so-called Employment Rights Bill is nothing more than a Trojan horse for union power and state interference. 'Far from protecting workers, it will price people out of jobs, deterring investment and sending small businesses to the wall.' In June, the Conservatives pledged to scrap the Bill if they return to office, warning the plans would 'grind our economy to a halt'. The IEA's report, by Prof J.R. Shackleton, argues that the plans will 'put the public through the wringer' and 'extort more pay from the government – which means, of course, the taxpayer'. The Telegraph understands the workers' rights plan has already been the subject of dispute between Ms Rayner and the Treasury, which is concerned about the impact on business confidence and economic growth. The Office for Budget Responsibility, Britain's independent fiscal watchdog, has said they will have a 'probably net negative' impact on a range of economic indicators, including employment, prices, and productivity. The Government's impact assessment found that the reforms will result in £5 billion higher costs for businesses, which the IEA said would be passed to workers in the form of lower wages. Ms Rayner has argued that the new rules will boost living standards, giving the public an 'upgrade to our growth prospects and the reforms our economy so desperately needs'. 'Billions in hidden costs' The professor of economics at the University of Buckingham said: 'Politicians love to announce new employment 'rights' because they think employers pay the bill – but that's an illusion. 'Every mandate, from parental leave to holiday entitlements, acts like a stealth tax that gets passed back to workers through smaller pay rises than they would otherwise receive. The only difference is that no money is raised for the Exchequer,' said Prof Shackleton. 'The Employment Rights Bill will make this much worse, imposing billions in hidden costs that workers will ultimately bear themselves. 'The Government is not protecting workers – it is harming them and undermining its own alleged number one priority to boost economic growth.' A government spokesman said: 'Too many workers are trapped in insecure, low-paid work, with weak protections that are poorly enforced. 'Through our transformative Plan for Change, this government will deliver the biggest upgrade to workers' rights in a generation, contributing to economic growth, and our measures have strong support from businesses and the public.'
The Sun
11-07-2025
- Business
- The Sun
Why Labour's economy plan means you'll need even MORE to retire
PENSIONERS will need to spend £15,000 a year more to have a comfortable retirement if Labour extends its stealth tax raid, analysis shows. Income tax thresholds were frozen until 2028 by the Conservative government. 2 2 But the prime minister has not yet ruled out extending the thresholds beyond this date as he attempts to fill a £22billion black hole in the public finances. A single pensioner currently needs a disposable income of £43,900 a year to have a comfortable retirement, according to industry trade body Pensions UK. But if the tax thresholds were frozen for two more years and higher living costs continue to rise then it would mean this figure would rise to £58,860 by 2030. As a result, pensioners would need £14,960 more a year than they do now. A comfortable retirement would allow you to spend £75 a week on food and £21 a week on takeaways, assuming that you own your own home and are mortgage free. In comparison, in 2020-21 you needed just £32,800 for a comfortable retirement. But the soaring cost of living has pushed up the amount you need each year to £43,900. As the cost of energy, food, driving and holidays have risen, pensioners currently need a higher income each year to make ends meet. If the amount of disposable income pensioners need continues to rise by the annual average of 6% each year and the income tax thresholds remain frozen then a pensioner would need £58,860 to live comfortably. Frozen tax thresholds have dragged millions of people into higher tax bands through a concept known as 'fiscal drag'. Craig Rickman, personal finance expert at Interactive Investor, says: 'Fiscal drag is a sneaky tactic of raising the tax burden over time, as it freezes tax thresholds so that people pay more of their income as wages rise with inflation. 'While it's not as obvious as raising tax rates directly, it could have a bigger impact over long periods – particularly when you see the length of time that some of these rates have been frozen.' He added that as tax thresholds are frozen for so long even lower earners will gradually pay tax on their income. Meanwhile, u-turns over the winter fuel payment for pensioners and plans to cut disability benefits have left pensioners feeling uncertain about their finances. How to save for retirement Anyone planning their retirement needs to do some careful calculations about how much they will need to afford the lifestyle they want. A good starting point is the government's state pension age calculator, which will tell you when you will receive your state pension. Visit to find out more. Pension calculators can also help you determine how much money you need to save to have the pension pot you want at retirement. The earlier you start saving, the easier it is as your money grows longer. And you're not on your own when saving for retirement. Your workplace will almost certainly contribute some money to your pension pot, too, and you get tax relief from the government, which reduces the amount you have to pay yourself. If you are struggling to make ends meet then don't worry, we have revealed how to legally pay less tax on your income. Plus our guide explains how to give yourself a secret pay rise and get up to £240,000 extra in retirement. Or if you are a grandparent then you could get a £6,600 boost for looking after children during the summer holidays. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@
Times
09-07-2025
- Business
- Times
Keir Starmer won't rule out ‘stealth tax' extension
Sir Keir Starmer has refused to rule out extending stealth taxes that would drag a million people into higher income tax by 2030. The prime minister told MPs that Labour would stick to its manifesto pledge not to raise income tax, national insurance or VAT. However, he refused to say whether the government would lift the freeze on income tax thresholds in 2028, as it has previously stated. Rachel Reeves, the chancellor, is looking to raise as much as £30 billion because of the the cost of the government's U-turns on welfare and winter fuel payments along with lower rates of growth. The freeze on income tax and national insurance thresholds was introduced by the Conservatives and attacked by Labour as a 'stealth tax' while it was in opposition.
