Budget and taxes Flashcards
What is the role of the treasury?
The treasury is the government department who has overall responsibility for economic and fiscal policy. The treasury is responsible for directing public spending and taxation policy.
There responsibilities include:
Public spending: including departmental spending, public sector pay
and pension.
Financial services policy: banking and financial services regulation, financial stability, and ensuring competitiveness in the City
*Strategic oversight of the UK tax system
*The delivery of infrastructure projects across the public sector
*Ensuring the economy is growing sustainably
What is the office for budgets responsibility?
The office for budget responsibility provides independent data about the economy.
They provide statistics on the state of the economy.
Create likely economical forecasts and judges whether the government will meet their economic targets.
What is the budget?
It finalises the government’s spending plan and taxations for the next coming financial year.
The chancellor of Exchequer presents it and also their analysis on the state of the economy.
It has to be passed through the house of commons as the money bill. The house of lords gets no say in the passing of the bill.
What are examples of direct tax?
Income tax, inheritance tax(40% of tax on 325,000+) , corporation tax (tax on company profits), capital gains tax (tax on second home etc.)
Name the different types of taxes
Direct tax- taxes on income gains (progressive taxes) the more you earn the more you pay.
Indirect taxes- (regressive) taxes on spending, not linked to the individuals pay so hit the poor more.
What are some indirect taxes?
You do not have to buy some of these things so it can be argued that indirect tax is fairer. VAT=value added tax. Airport passenger duty, depending on the distance from London to their capital (four bands)
What does recession mean?
The fall of confidence in banks meant a money shortage and a drop in demand for goods leading to unemployment.
What is inflation?
Inflation refers to the cost of living going up and the value of currency going down.
What is gross domestic product?
The gross domestic profit is the value of goods and services produced over a year in the country.
It is a domestic index and includes the value of foreign companies in that country.
What are interest rates?
If you borrow money, interest rates are the amount you are charged for borrowing that money.
Who are the monetary and policy committee?
The monetary and policy committee is chaired by the governor of the bank of England.
They are given an inflation target to meet by the chancellor of Exchequer and their only weapon to meet this is interest rates.
