Published: Tue, October 30, 2018
Health Care | By Cedric Leonard

Digital services tax: What the Budget 2018 announcement really means

Digital services tax: What the Budget 2018 announcement really means

But those forecasts could easily change for the worse, leaving the chancellor in a tight spot, the IFS said.

"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".

John McDonnell said people would continue to "suffer" despite the Chancellor's £30bn giveaway Budget.

"Given the dominance of the US tech giants, it is hard to see the Trump administration taking kindly to the digital sales tax as the United Kingdom sets out its stall for the best possible trade deal with the US", Dan Neidle, a tax partner at law firm Clifford Chance told the BBC.

However, analysis shows the wealthy will benefit more than the worse off.

The cuts were criticised as "tax cuts for the rich" by shadow foreign secretary Emily Thornberry on Monday.

Mr McDonnell said: "The fairest way to do it, if you're changing the allowances fine, that puts more money in some people's pockets and they spend in the economy and it increases demand".

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The personal allowance, which is the minimum income someone can earn before paying tax, will rise to £12,500 from £11,850.

The shadow chancellor has rubbished Philip Hammond's claim that austerity is "finally coming to an end".

The higher rate threshold, the income at which someone becomes liable to pay the 40 per cent tax rate, will rise to £50,000 from £46,350 at the same time.

The Chancellor shelved his pledge to eliminate the UK's budget deficit in favour of giveaways to workers, cuts to business rates, more cash for Universal Credit and increases in public spending.

The two items above have prompted certain quarters in the Labour party to say that the ruling government is preparing for a general election to come next year, and that the moves above are to gather support from the public ahead of it.

'Nearly 90 per cent goes to the top half. Some of these are middle earners, we're talking about head teachers and people like that who have had a rough time as well as everyone else'.

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