THE Treasury has been rebuked over a claim the UK’s tax rate for those on “average salaries” is “lower than all G7 nations” following a cut to National Insurance contributions.
The assertion was made in social media posts after a fall in NI contributions announced by Chancellor Jeremy Hunt, which came into effect on January 6 and was viewed as a bid to revive the Tories' flagging popularity in the polls.
Following a complaint, the UK Statistics Authority has issued a statement saying it should have been made clear that this referred only to single workers with no children – and not to other family types for whom this is not the case.
The post was published on X/Twitter by the Treasury along with a graph on January 8 and has been viewed more than 760,000 times.
It stated: “REVEALED: After today's NICs changes, the UK's tax rate for those on average salaries is lower than all G7 nations based on the latest @OECD data.
“The government supports hard workers.”
The post prompted a complaint to the statistics watchdog from Labour MP James Murray, the shadow financial secretary to the Treasury.
He wrote: “This was sourced from OECD data, but failed to provide sourcing information that clarified it referred to only single workers with children.
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“When looking at other family types, such as one-earner married couples, the same OECD data shows that the UK has a higher effective tax rate than other G7 countries including Canada and the USA.”
In a ruling, Sir Robert Chote, chair of the UK Statistics Authority, said: “Under the principles of intelligent transparency, it should have been made clear that this referred specifically to single workers with no children and not to other family types for whom this is not the case.
“The Office for Statistics Regulation will continue to work with HM Treasury to ensure future communications are clear and comply with the principles of intelligent transparency.”
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Murray had also highlighted concerns about Treasury posts which referred to the average employee on a £35,400 salary saving £450 a year from the cut to National Insurance.
He pointed to a comments from the Institute for Fiscal Studies noting that combined with a planned freeze on income tax and National Insurance thresholds and allowances in April, it was “overall actually a tax increase”.
But the watchdog concluded the Treasury was “reasonably clear and transparent” that they referred specifically to the impact of the National Contribution changes taking effect on the day of the posts and “not to the wider range of personal tax changes taking effect this year that were referred to by the Institute for Fiscal Studies".
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