At the heart of a fair society is a fair tax system: a tax system that rewards hard work and ambition; a tax system where the wealthiest contribute more; a tax system where work always pays. This is the tax system we are building.
In our tax changes, redistribution from top to bottom is underway. This year, the average rate of tax paid by the wealthiest has increased, whilst for those on middle to low incomes it has gone down. This is right.
Under this Government, the top 1% of earners will this year pay 25% of the total income tax collected. That is one pound in every four. The wealthiest 14% of the population will pay 60% of tax bill. This is a tax system that ensures the burden falls on those with the biggest shoulders; this is a tax system that is fair.
We are also tackling tax avoidance. We are shutting loopholes, action that has protected £15 billion of revenue and we have recovered £10 billion through the courts. Our next targets are companies like Amazon and Starbucks – it is a disgrace that they can pick and choose what tax they pay and it must stop.
By collecting more from those at the top, it means we can do more to help those at the bottom. This month, hardworking people will see their take home pay rise. This is because the Government is raising the personal tax allowance - the amount you can earn without paying income tax – meaning that 24 million ordinary working people across the country will be paying less tax.
This April, the allowance rose by £1300 to £9440 and next April it will reach £10,000. For 81,483 hardworking Swindon residents, this means an extra £700 in their pocket every year. For the 2.7 million lowest paid workers this means paying no income tax at all. For those on the minimum wage it means that your take home earnings double. This is what a fair tax system looks like.
Yet a fair tax system is not built on redistribution alone, information is also key. It is important that taxpayers know exactly what they are paying and what it is spent on. The Government will now include a spending summary with every end of year tax statement and I would also like to see changes to the tax rates displayed on pay slips, so you can see exactly what you are paying and why.
Finally, it was a privilege and an honour to attend Baroness Thatcher’s funeral on Wednesday. Who could fail to be moved by the hundreds of thousands who turned out to line the streets to pay their respects, sending her off on her next journey to the sound of rapturous applause.
