Lower tax after Brexit

I am all in favour of lower taxes after Brexit. People voted to get rid of Vat on domestic fuel, so Mr Osborne should get on and do that. Lower Corporation tax rates were not part of the offer. Is Mr Osborne planning an early budget to cut this tax? If so will he legislate to remove Vat  on domestic fuel which would boost consumer spending power and help the lower paid most.

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44 Comments

  1. Posted July 4, 2016 at 5:34 am | Permalink

    Surely until at least A50 is triggered we have to abide by EU law, thus lower fuel taxes [1] will; have to stay, just as the tampon tax will, more reasons why A50 should have been triggered a week ago is you lot really want a Brexit and not just a leadership coup.

    [1] by which you mean domestic energy, as that is what the Brexit campaign was about, it would be nice to think he might abolish VAT on petrol and Derv though…!

    • Posted July 4, 2016 at 7:00 am | Permalink

      One tax change that could be done very easily is a change to the 2015 VAT Place of Supply rules. An ESC for companies under the VAT threshold could have been done as part of the EU (Ireland and France both gave their small businesses exemption, resulting in several firms we trade with moving bases from Spain and Denmark to France) but the British government was unwilling.

      That could be done while EU law still applies, would immediately cut costs for the smallest companies (an estimated 8M of them), benefiting those on low incomes, and means that certain smaller US technology firms would resume trade. It also means that physical goods won’t get hit when the VAT rules expand to cover them.

    • Posted July 4, 2016 at 5:47 pm | Permalink

      You are very keen on evoking Article 50 Jerry
      But there is no rush until informal talks with the EU nations start and provide a good idea of intentions and wishes of all those involved.
      Get a basic framework agreed first.
      PS
      The Commission is not the same as EU nations.

      • Posted July 5, 2016 at 7:39 am | Permalink

        I am very puzzled by the different views on A50. Some say it is an elephant trap which the EU will use to delay exit for ever. Junker’s mob want it immediately and say no negotiations until it iis declared. This suspicious. On the other hand the Remaniac big business plotters, along with Mrs Merkel and the US foreign office, are doing all they can to delay it. I guess Junker and mob can stand any more od Nij taking the piss in their talking shop, Mrs M wants our money to pay for her disasters and the US wants us to stay in order to be their mouthpiece for US/EU foreign policy.

        But we can open the elephant trap and make exit certain- but be careful not to fall into it. Be a clever elephant and step back. We hold the cards. Al we say is, we wish to stop payments and will do so unless matters are resolved quickly. We are putting in the same controls on migration as apply to non-EU now and will buy a US type counting system. We will not apply tariffs on EU imports or refuse passporting of financial services. Back in your court.

        They will then either spend years arguing with each other until tariffs are forgotten, or they apply them to cars and dairy, in which case the Germans have unemployment and the French farmers will be dumping chees and milk on Scooter Boy’s doorstep. Meanwhile we buy Japanese, Minis, GMs, Jags and Land Rovers and the Cornish and Somerset Brie makers make a fortune.

        And Junker buys in more Cognac, no doubt paid for by EU taxpayers.

        All this could go if Mrs May carries out her stated plans.

      • Posted July 6, 2016 at 2:02 pm | Permalink

        @Edward2; What “informal talks”, there will be none, we have been told by the EU, and the EU is the 27 other member states because the EU27 are governed by EU rules. If the EU27 nations could act independently then many of the reason for Brexit would not exits!

        @stred; A50 is no elephant trap, that is, unless the UK makes it one by digging ourselves into the hole.

  2. Posted July 4, 2016 at 5:49 am | Permalink

    No idea what Osborne is doing (or why he is still in his job). Maybe now he’s not even pretending to balance the books by 2020 he’s just going to spend as much as he can to boost his own popularity ? Who knows.

    A grim choice for Tory leader – Leadson who said Brexit would be a disaster 3 years ago and May who said Brexit would be a disaster 3 weeks ago. Well done Gove.

  3. Posted July 4, 2016 at 6:10 am | Permalink

    As I wrote yesterday, there should be a motion of “no confidence” tabled immediately regarding the chancellor to force his removal and replace him with someone who does not share his defeatist attitude.

  4. Posted July 4, 2016 at 6:13 am | Permalink

    Osborne has zero credibility and must go as soon as possible. Someone competent is needed to sort out the huge and over complex mess he has made of the tax system. Also to reduce the endless government waste and incompetence, and get taxes down to sensible levels again.

    He will doubless conveniently blame the mess on the Brexit vote, but Osborne’s failure to grasp basic economics, control waste and set sensible, simpler and lower taxes and run efficient government is the main problem. We also need to move to cheaper, reliable energy systems and stop all the subsidies for the pointless unreliables.

  5. Posted July 4, 2016 at 6:19 am | Permalink

    If he does anything to help the poorer people – – he will only take more back than he gives. The poor, from the UK at least, are only here to be punished. . BUT . . The poor, and the criminal, who arrive from abroad are well looked after for absolutely NO contribution whatsoever. Example – Albanian gangster/murderer – £2k a month benefits- -English pensioner who contributed all their life – -a LOT less.

  6. Posted July 4, 2016 at 6:21 am | Permalink

    I wouldn’t worry, if Mrs May is foisted on us Brexit is a distant dream. The Conservative Party is about to show us just how democratic it isn’t.

  7. Posted July 4, 2016 at 6:24 am | Permalink

    Perhaps Mr Osborne is going to put in place some sensible measures in his last few weeks as Chancellor. Who knows, if they are really sensible maybe he will be kept on by the new PM. Here are a few other ideas: get rid of the 45p rate of tax and cut the top rate to 35%; hugely simplify the tax system, get rid of loopholes, combine NI and IT etc; get rid of the punitative £90k charge on non doms and stick to £30k; cancel HS2 and Hinkley Point; get started with Heathrow and numerous other needed projects such as the A14. Get started properly with shale gas, cut down on green crap. We need a redoubling of focus on NATO as our most important alliance so boost defence at the expense of overseas aid – the world will be a better and safer place for it.

  8. Posted July 4, 2016 at 6:26 am | Permalink

    John today Mr Hammond is trying to suggest we cannot get away from open door immigration -and that we will have to have it come what may and dismissive of people that believe we can manage migration he also says (childishly) we can’t have it all and nothing in return. He is really defeatist and pathetic I feel. Surely our negotiating position is incredibly powerful: Largest EU Export Market/Sea ownership/tax rates positioning (which could help or hinder EU trade) /largest Financial centre/Funding contributions to the EU /NATO Protection – surely there is lots to negotiate around and any one of those big pieces of negotiation can be traded against limiting migration to those we actually need to live and work here, rather than those who just want to move here and contribute nothing. I don’ty believe Hammond and he needs to understand his comments are alienating Conservative voters – the majority of which the part depend on. UKIP will take masses of votes if the Conservatives let us down on negotiating hard and winning immigration control measures – especially if we have to give up anything we currently have. Can you talk to the guy and get him to back Britain and stop being so wet!?

  9. Posted July 4, 2016 at 6:33 am | Permalink

    Odd outcomes of the Referendum indeed.
    1. Mr Cameron is gone but yet still here.
    2. He is the PM but not acting as the PM.
    3. The Cameron is still,… still getting paid.
    4. The Great Threatener of the British people, Mr Osborne, is still in position. Still running down the Country. Still threatening. Still being paid.
    5. Grandees, vaguely reminiscent of cheap cigars, of all parties, for whom no-one has the slightest respect, arrive periodically on our shores from heaven knows where and offer unwanted advice to us all; to their respective political parties amidst calls for one or two of them to be imprisoned for the rest of their natural lives.
    6. We are still very much in the EU. Nothing has changed

    Politicians are all fervently discussing whether tax should be placed or not placed on tampons

  10. Posted July 4, 2016 at 6:34 am | Permalink

    An interesting one. Surely in the short term keeping large companies in the UK, unless you think their threats to leave are over done, will keep their tax and that of their employees, maybe attract more thus increasing the tax take further and give us a greater bargaining chip. This might finally get the ‘remainers’ to shut up and stop running down this country for their own selfish purposes.

  11. Posted July 4, 2016 at 6:45 am | Permalink

    News Alert:
    Mr Osborne is on telly at 8.10am. He could have handed in his most welcome resignation less publicly. So why is he going to appear?

    • Posted July 4, 2016 at 6:47 am | Permalink

      Correction: The Shadow Chancellor. Still gainfully employed and, entitled to speak to us all unlike any other politician similarly titled..

  12. Posted July 4, 2016 at 6:50 am | Permalink

    Out of all the things to “negotiate” on May’s decision to focus on the position of EU nationals already living here is the least effective and the most likely to increase the Reamain support here – maybe that is why she has chosen it (Cameron said the same recently). While there may be an influx (or MORE of an influx) of EU nationals coming here before we leave it is perfectly easy to say the position of EU nationals who obtained NI numbers before today is not under threat. She is flatly contradicting the Leave campaign on this point which shows the risk of having a Remainer in change. Really if this is the best “negotiating” she can do there is no hope.

  13. Posted July 4, 2016 at 7:10 am | Permalink

    Before he gets the boot, he wants to bring down the tax burden on his family’s wallpaper factory.

    A swift move on IHT possible as well; say one million each to start. Also, remove the requirement to pay the IHT before Probate can be granted; so doing away with the need to stick your expected IHT bill into a Trust fund.

    While he is handing out goodies, do away with “payments on account” for taxable events that happened this year, but won’t happen next year. And, the new digital tax accounts requiring most businesses, self-employed people and landlords, to filing and paying “at least” quarterly.

  14. Posted July 4, 2016 at 7:16 am | Permalink

    More State means more tax. This is a maxim. The Eurostate introduced the concept of a tax on everything and VAT currently bumps up the cost of practically everything by a fifth. Not good for consumers, not good for business and is a tangible obstacle to economic growth. So often we hear arguments for a punitive Progressive Tax system coming from the very people who push VAT the most. VAT the tax that hits everyone and in particular effects basic needs, such as heating and food, must go. It is a stealth tax of the worst kind.

  15. Posted July 4, 2016 at 7:21 am | Permalink

    It’s time Osborne was gone he is yesterays man. Nothing he proposes will get through Parliament and he will likely damage the economy with his petulant streak.

  16. Posted July 4, 2016 at 7:45 am | Permalink

    Vat on fuel will be a help but a attack on the subsidies that we are all paying for would lower the bills and help those millions in fuel debt and poverty. It would also give a tremendous boost to high energy industries.

    A tax that left all land owners with 20% net profit out of their leasing payments for turbines on land and sea would raise far more income, after all it would be a tax on unearned income.

  17. Posted July 4, 2016 at 7:50 am | Permalink

    Has the current PM lost complete control of his Chancellor? The Conservatives need to get the replacements in quickly: PM, Chancellor and Governor. if the Conservatives cannot sort out these positions after a Brexit vote, it is bound to worry the world whether they can move the country on … Lords Lawson and Owen have indicated – get on with it.

  18. Posted July 4, 2016 at 7:54 am | Permalink

    The real question is why is Osborne still there at all? He has zero credibility, is clearly economically illiterate, issued dishonest threats and forecasts to try to con the referendum voters. He is still even now running the country and economy down as are the BBC. Above all it seems he always wanted to prevent any referendum at all.

    If left in place he is likely to work against the democratic will yet again.

  19. Posted July 4, 2016 at 7:58 am | Permalink

    The WTO boss has said that George has started the negotiations with this announcement. Has he? Probably inadvertently. Although I believe his thinking was to stop business rushing to Luxembourg or such like for tax purposes and to get the rest of the world investing in the UK. It could of course be a revenge tactic to upset the Brexit apple cart by preempting it. His strategy in any event is finding ways to blame Brexit for his inability to achieve things. His announcement of dumping his goal to have a budget surplus because of Brexit was certainly his get out of jail card(not literally).

    In any event it is a good idea. Corporation tax should be abolished all together ASAP. Tax avoidance and Tax abuse would then be one stick the stupid left could not hit businesses with and the boost to the economy would be good.

  20. Posted July 4, 2016 at 8:17 am | Permalink

    Imagine Osborne teaching an Economics class

  21. Posted July 4, 2016 at 8:17 am | Permalink

    Far be it for me to suggest that our esteemed Chancellor seems to be trying to provoke a recession by reducing tax revenues just to prove that his predictions of doom and gloom were right after all.

    If this is the case then it is an action beneath contempt and unbefitted to the high office he holds.

  22. Posted July 4, 2016 at 8:17 am | Permalink

    Surely nobody can do anything until the European Communities Act is repealed. Until then we’re in a holding pattern.

    The new PM should start with some “totemic” measures after repeal which demonstrate change; legalisation of selling in any weights and measures, start of phasing out VAT (perhaps with the “tampon tax”) and so on. Just to demonstrate that being out means being out.

    The big question is whether the Brexit government is going to remove EU constraints and keep them removed rather than just replacing them with domestic equivalents. That is, whether it will move in the liberal/libertarian direction so desperately needed after Blair but which did not happen.

    The Brexit government should seize this unique opportunity to not just reduce laws or taxes, but for structural reform, slashing the bloated (and EU aligned) quangocracy and returning sovereignty not just to Westminster, but to the people. We stand at a point in history when such dramatic reform is possible, as in 1945 and 1979, when the people are crying out for change. The new government must not drop the ball we have handed to them.

    That means a PM who is bold and enthused by Brexit; and that means not Mrs May, who may have made a reasonable Prime Minister in the normal run of things, but is not the person to lead the nation at this unique moment.

  23. Posted July 4, 2016 at 8:35 am | Permalink

    Lower taxes have always been the prime mover in the economy ; we need this stimulus now more than anything else . Giving the voter something post Brexit is a way of showing ” thanks ” ; the VAT imposed by Brussels on Domestic fuel is just the sort of message the public deserve .

    I do not think we should delay showing to Brussels our determination to become free ; the sooner the air is cleared the better .

  24. Posted July 4, 2016 at 8:43 am | Permalink

    Surely VAT is an EU tax so therefore, once we leave, we can consign it to the bin on everything and replace it with a more sensible “purchase” tax or similar ?

  25. Posted July 4, 2016 at 9:07 am | Permalink

    Osbourne will simply use Brexit as an excuse for his failure, he has already dumped balancing the books, countless other so called targets will follow.

    Yes he has lowered some taxes, but he has raised countless others, he is no more a low tax Chancellor than Gorgon Brown.

    I have never had much faith in his abilities, and he does not understand the human nature of people and their actions to counter his own policies.

  26. Posted July 4, 2016 at 9:38 am | Permalink

    As we have a housing crisis shouldn’t the first priority to cut VAT on building work? It would show a clear benefit of leaving the EU.
    (Why the EU has to be more centralist in this case than the USA is a mystery to me.)
    I would suggest starting a petition for this.

  27. Posted July 4, 2016 at 1:20 pm | Permalink

    The next budget should be nothing to do with Mr Osborne at all, it should start to reverse his serial incompetence and his endless damaging tax increases.

    We need a new and competent chancellor for a change. One who cuts taxes, simplifies taxes and cuts the size of the bloated, over paid, over pensioned and largely incompetent state sector.

    Leaving the real job creators to do just that. Using the funds they then retain to invest (and the time they have released by the bonfire of red tape and the far simpler tax system).

    A win, win for everyone but the lawyers, bureaucrats and tax & red tape advisors

  28. Posted July 4, 2016 at 1:24 pm | Permalink

    If I may say so, these tax cuts are too small to hugely affect the macroeconomic outlook. And cutting corporation tax is sub-optimal, capitalism runs on sales – we need massive tax cuts for working people instead.

    Tax cuts should be introduced with the specific goal of increasing the budget deficit, since government deficit = private sector surplus by matter of accounting. And we need a much larger private sector surplus to achieve very high Chinese-style real GDP growth rates.

    • Posted July 4, 2016 at 6:23 pm | Permalink

      The way to get a larger private sector is to prune the largely parasitic (and hugely inconveniencing) state sector, reduce payments that augment the feckless. Also cut taxes, so that people and businesses have the money to reinvest and people have incentives to work.

      They will do this far better and more efficiently than the government does in general.

  29. Posted July 4, 2016 at 1:28 pm | Permalink

    Isn’t it about time we have a conservative national broadcaster

    Brexit shows there is demand for something other than the BBC

    • Posted July 4, 2016 at 4:49 pm | Permalink

      @adam, No, it shows that we need unbiased broadcasters, newsprint and news websites, regulated if necessary.

      • Posted July 4, 2016 at 9:46 pm | Permalink

        How very liberal and open minded you are Jerry
        One of the few unbiased people in the UK
        You must feel very proud

    • Posted July 4, 2016 at 6:30 pm | Permalink

      As far as I can see, other than Andrew Neil who is about in the middle, everyone else at the BBC has the usual absurd BBC, Guardian, Toynbee, Libdim, PC, Greencrap, dim art graduate, luvvy views – almost to a man or woman.

      A sort of BBC idiotic group think.

    • Posted July 4, 2016 at 7:05 pm | Permalink

      An objective and unbiassed national broadcaster who reported the news rather than “made” it would be a good start.

      • Posted July 5, 2016 at 7:20 am | Permalink

        It would have been interesting to hear the whole of Nigel Farage’s resignation speech. I read part of it referred to young people being mislead by the media. All the MSM permitted were clips of the final part.

        I suppose they were glad to see the back of him and think they will soon see the back of the 15-20m swivel eyed racist thick traitors to their funding organisation.

        Hopefully, somone will put a video on that actually works and is not broken down by adverts every few seconds.

      • Posted July 6, 2016 at 2:25 pm | Permalink

        @David Price; Indeed but that is not an exclusive problem with the BBC, something the anti BBC gang on this site forget, do they never watch Ch4 News for example (who is just as much a “national broadcaster” as the BBC is), and let’s face it Sky News is not always (to use their US sister channels tag-line) ‘Fair and Balanced’ either.

        Trying to make this out as a ‘BBC problem’ is as biased as many are attempting to depict the BBC thus.

  30. Posted July 4, 2016 at 2:48 pm | Permalink

    In the longer term, do you think that VAT could be replaced altogether with some form of sales tax?

    • Posted July 4, 2016 at 6:31 pm | Permalink

      Yes indeed it is an absurdly complex tax and with a huge admin. burden on business.

  31. Posted July 5, 2016 at 1:27 pm | Permalink

    I must be missing something. Before the referendum George Osborne promised us a punishment budget if we dared to Brexit, with £15 billion of expenditure cuts and £15 billion of extra taxes. Now he wants to cut corporation tax instead. Is he bipolar or just plain cuckoo?

    The markets have made exactly the logical response to Brexit, with the FTSE up (in contrast to the German DAX and French CAC) and sterling is down. Mark Carney’s illogical response is to promise more easy money and to extend credit to those who have over borrowed. In trying to cure a non-existent problem, he is in danger of creating inflation.

    These actions would DEstabilise the UK economy. Not the least of the items in the new PM’s in tray is to appoint a new Chancellor and Governor before the current incumbents can do serious damage.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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