Success for Ipswich MP's tax plans

MP Ben Gummer
Image caption Ben Gummer MP is delighted his plans for itemised tax statements have been well received

We told you back in January that Ben Gummer's idea for a personalised tax statement had been well received.

Well, it appears we're going to see tax in a completely different light from now on, thanks to the MP for Ipswich.

It looks like the government has decided to take up Ben Gummer's idea of giving us itemised tax statements so that we know how every penny of our tax is spent.

"This is great news and I am absolutely delighted," says Mr Gummer.

"This can only be good for democracy as it will hold governments to account for the decisions they make on your behalf."

The first tax statements will be delivered in 2014 to 20 million people: eight million who fill out a self assessment form every year and a further 12 million who get a letter from the Treasury notifying them of a change to their tax code.

The remaining nine million taxpayers will start to get the letters at a later date.

"Everyone should know how the government spends their money," Mr Gummer told us.

"The fact that it hasn't happened so far tells you a lot about why there's such a big distance at the moment between politicians and members of the public."

Mr Gummer launched his idea in a 10 minute rule bill in Parliament earlier this year.

'Water cooler moment'

"There can be no substitute for something that lands on the doormat at the same time across the country and corresponds with our entire tax paid. It would, in a way, be a national water cooler moment," he told the Commons.

And to prove what he had in mind he produced the itemised tax for a person on a salary of £25,500, who under last year's tax regime would have paid tax of £5,979.

The breakdown showed that:

  • £2,080 went on pensions and benefits (including £212 on housing benefit and £296 on incapacity benefits);
  • £1,094 on the NHS;
  • £824 on education,
  • £339 on defence;
  • £160 on the police;
  • £44 on prisons;
  • £92 on roads,
  • £71 on railways... and so on.

And it would throw up some interesting debating points: our earner on £25,500 would have paid £59 towards overseas aid and just £28 to the European Union.

"How many times have each of us been told on the doorstep that all our money goes to Europe, or Africa, or Trident?" said Mr Gummer.

"Armed with a tax statement, taxpayers would have a precise and accurate understanding of how their tax pounds are really spent."

It will cost the Treasury 40p to send out the letters but Mr Gummer says they would spend this money anyway to send out tax returns.

At the time, many in the Labour party dismissed the idea as a gimmick, now their questions over whether the idea would ever be adopted look like being answered.