TAX NEWS - June 2010

UK Tax: UK government targets benefits, tax credits and pensions

The UK government has indicated that future budget cuts will take in areas such as benefits, tax credits and pensions as well as many other different departments and different spending plans. This is the first time the government has formally indicated which areas will suffer most from the expected £60 billion of cuts to be implemented in the short-term. However, is this enough?

This comes on the same day that Fitch, one of the worlds more renowned credit rating agencies, indicated that the UK government needs to reduce budget spending by at least £86 billion over the next five years, an increase of £15 billion on recent forecasts. This is placing more and more pressure on the UK government at a time when finances are tight and the UK electorate is becoming more and more concerned. David Cameron had initially stolen a march by announcing plans to cut budget spending by £60 billion but today's announcement by Fitch may push the government back to the drawing board.

The truth is that the UK budget deficits has been out of control for some time and ironically David Cameron is being criticised by the Labour Party as he attempts to cut spending.