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New government tax rate reforms come into effect

A raft of tax changes come into effect today.
A raft of tax changes come into effect today. Credit: Tim Ireland/PA Archive/Press Association Images

Struggling families will lose thousands of pounds in the new financial year while Government tax reforms save 13,000 millionaires an average of £100,000, Labour claimed today.

Among a raft of changes coming into effect today are the largest rise in the personal allowance, which means that no one pays any tax until they earn more than £9,440, and a fall in the higher rate threshold to £41,450.

But a one earner family with children will be £4,000 worse off on average in the next 12 months under changes introduced since the Coalition took power, according to Opposition analysis of figures published by the independent Institute for Fiscal Studies (IFS).

Overall, Labour claims UK households will be £891 a year worse off on average in the new tax year as a result of cumulative benefits cuts and tax rises.

The Government's controversial decision to reduce the top rate of income tax from 50p to 45p will benefit 267,000 people on more than £150,000, including saving 13,000 earning £1 million an average of £100,000, it added.

Shadow chancellor Ed Balls said: "The whole country will today see whose side this Conservative-led Government is really on and who is paying the price for their total economic failure."

Labour: UK in G20 'relegation zone'

House of Commons library figures show the UK was in the G20 "relegation zone" in terms of economic growth since the Chancellor's autumn 2010 spending review, according to Labour.

These are embarrassing figures for George Osborne as he attends the meeting of G20 countries this weekend. "Britain has now flatlined for over two and a half years under this Conservative-led government.

In the global growth league table we're in the relegation zone with 17 out of 20 countries including America, France and Germany doing better than us.

This isn't good enough. The longer our economy stagnates the worse off people will be and the more long-term damage will be done.

We need urgent action now to kick-start our flatlining economy and help people struggling with the rising cost of living. Our jobs plan includes building thousands of affordable homes and giving tax breaks to small firms taking on extra workers.

– Shadow Chancellor Ed Balls

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Osborne: Tax avoidance a 'catalyst for change'

Public outrage over corporate tax avoidance must be used as a "catalyst for change" in the UK and the developing world, Chancellor George Osborne said.

Mr Osborne was in Moscow yesterday for a meeting of finance ministers from the G20 group of major economies which pledged to find ways to crack down on dodges by multinationals.

Writing in the Observer, the Chancellor said:

This year, we have an opportunity to turn concern over tax avoidance into a catalyst for change, creating a competitive tax system that supports businesses, but where everyone pays their fair share. Through our role in the G20 and our leadership of the G8, we can ensure this change benefits Britain's taxpayers and also helps meet our commitments to the poorest in our society.

Osborne joins global leaders to crack down on tax

The Chancellor George Osborne today joined global leaders in pledging to crack down on tax avoidance among the world's multi-million pound corporations. Back home Ed Miliband also had big earners in his sights as he tried to draw Nick Clegg into a row with his coalition allies over mansion taxes.

ITV News' political correspondent Carl Dinnen reports:

Read: Miliband promotes 'mansion tax'.

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Osborne: Britain is 'open for business' internationally

Chancellor George Osborne believes Britain has proven it is "open for business" by reducing its corporation tax rate over the course of the past two years.

Britain has cut its corporation tax rate by more than any other country in the G20 over the past two years, a message to the world that we are open for business that has seen companies return to Britain, and helping to create and secure thousands of jobs and millions in investment.

But our commitment to the most competitive corporate tax system goes hand in hand with our call for strong international standards to make sure that global companies, like anyone else, pay the taxes they owe.

That's why Britain, with Germany and France, asked the OECD to scrutinise the international rules, and we will together welcome their report to the G20 this weekend. The report shows this is an international issue that requires international action.

It shows the global economy has changed massively over the last decade, but global tax rules have stood still for almost a century, and Britain will lead the international effort to bring them into the twenty first century.

Finance ministers will this weekend look to reform global tax rules at the G20 in Moscow.

Osborne's bid to reform global tax rules

Finance ministers will call for an overhaul of tax laws at the G20 in Moscow.
Finance ministers will call for an overhaul of tax laws at the G20 in Moscow. Credit: Lefteris Pitarakis/PA Wire/Press Association Images

Chancellor George Osborne has renewed his call for international action to tackle so-called "profit shifting" by multinational companies as he unveils the next steps in his fight to reform global tax rules this weekend.

Calls for an overhaul of tax laws, including the controversial transfer pricing rules that were written almost 100 years ago, will be highlighted to finance ministers at the G20 in Moscow by the Organisation for Economic Co-operation and Development (OECD), which will present its report.

The work by the OECD comes as international companies such as Google, Facebook, Amazon and Starbucks have sparked controversy after it emerged that they all pay minimal tax on large UK revenues.

The Chancellor will announce that Britain will chair a new transfer pricing group which will look at how to reform the system which allows profits to be diverted to parent companies or to lower tax jurisdictions, via royalty and service payments.

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