With the Euros having kicked off on Friday, and both Scotland and England competing, it promises to be a busy start to the summer for pubs across the country. Cheering on your team with a beer in hand is undoubtedly one of our nationâs favourite pastimes.
But with the average price of a pint now hitting ÂŁ4.75, Brits might find themselves watching their wallets as much as the football. How has one of our favourite tipples become so expensive? Well, after the usual overheads pubs have, tax makes up a big chunk of what you pay.
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A new TPA research note shows that ÂŁ0.60 of the cost is beer duty. With VAT applied on top of that, 29 per cent of the price you pay is going straight to the tax man. 300 million pints are expected to be drunk during the Euros which means that British drinkers will cough up ÂŁ180 million in beer duty and ÂŁ237.5 million in VAT during the tournament.
Shockingly, our beer duty is more than any EU nation with the exception of Finland. As someone whoâs no stranger to his local, I wasnât best pleased. Responding to the revelations, I explained: âExcessive rates of beer duty leave a bitter taste in the mouth for those taking part in one of the nationâs great pastimes, particularly when we outstrip most of our European neighbours.â
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In the run up to the general election, voters will be inundated with pictures of pints, poorly-poured by candidates and party leaders in a bid to connect with the electorates. Yet few will acknowledge how heavily our beers are taxed. Whoever forms the next government, if they canât bring themselves to cut the duty, at the very least they should promise not to add to it.Â
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This week was very much manifesto week, with the Conservatives, Labour, and Liberal Democrats all setting out their stalls. While this is supposed to be the moment we learn what the parties plan for office, there was little that hadnât already been announced and, when it came to matters of tax and spend, it was largely more of the same.Â
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The TPA team analysed the policy proposals and John OâConnell, our chief executive, had a few words to say on all of them.Â
Conservatives
âWith the tax burden on course to hit an 80 year high, Brits of all ages are looking for concrete measures to get runaway spending under control and fundamentally reform the tax system to deliver the economic growth the country needs. Cuts to national insurance and changes to stamp duty will be welcome, but do not go far enough. The harsh reality is that squeezed taxpayers cannot wait years to feel relief.â
Labour
âWith substantial spending commitments to pay for, a Keir Starmer government will inevitably be looking to find ways to dip deeper and deeper into the pockets of Brits, effectively guaranteeing years of further stagnation. No hikes to income tax, national insurance, and VAT is good news but, as the current government has shown, there are plenty of other ways to raid household budgets.â
Liberal Democrats
âReforms to IR35 rules offer a glimmer of hope in a manifesto otherwise dominated by a host of spending commitments and tax rises in other areas. Meanwhile, targeting capital gains tax risks damaging investment and harming growth at the worst possible time⊠The Liberal Democrats might know where to make spending pledges to appeal to voters, but taxpayers will know that policies have a price tag and will want to know that they wonât be left worse off.â
The Reform UK âcontractâ is due on Monday and weâll be sure to let you know our thoughts when we see it.
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TaxPayers' Alliance in the news
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Bury the death tax
Regularly cited as one of Britainâs most hated taxes, inheritance tax has developed from something only paid by the super rich to a concern for millions of taxpayers. With the current allowance due to be frozen until 2028, many more will be dragged into paying it.
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Speaking to the Times, our head of research, Darwin Friend, didnât hesitate in calling for the death tax to be buried once and for all: âA tax that was designed to only affect the wealthiest is now hitting hard-working households who are already mourning the loss of loved ones. The next government needs to scrap the death duty before more grieving families are hammered by HMRC.â Hear, hear!
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The productivity gamble
In this weekâs blog, our researcher, Shimeon Lee, takes a deep dive look at one of the ways the parties hope to fund all their spending commitments, and why itâs not such a sure bet.
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A big chunk of the economic growth both Labour and the Conservatives are relying on requires sufficient and sustained productivity improvements. As Shimeon explains, the projected improvements may well be overestimated: âproductivity growth in the public sector lags significantly behind the private sector. Between 1997 and 2019, public sector productivity increased by just 0.2 per cent per year while private sector productivity grew four times faster, 0.8 per cent per year⊠Whichever party wins the next election will only have the fiscal headroom to implement their spending plans if they can deliver productivity growth. This starts in the public sector, where the government must take a good hard look at how taxpayersâ money is being spent.â Have a read of Shimeonâs fascinating blog here.
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Itâs fair to say that public sector back slapping is a bit of a pet peeve for us ( see our work on council award ceremonies). The latest example comes from immigration enforcement civil servants who look to have splashed out ÂŁ16,800 on a jolly at a country club!
Whilst reward and recognition schemes can be important, costs must be kept under control when itâs taxpayers footing the bill!
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Benjamin Elks
Grassroots Development Manager
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