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Government spending and taxation
Teacher’s please print off the notes to guide you
What the exam board needs you to know...
Lesson objectives
1. To be able to discuss government spending2. To be aware of how the Government taxes
workers3. How businesses are affected by changes in
government spending and taxation
Where do you think the
government will get 697
billion?
This is where some of the money comes
from that the Government gets to spend. Lets look at
all those now....
Income tax 150bn
Nat INs £99 bn
VAT
£81bnHow much does this add up to? Is it all
the money the Government needs?
Other taxes account for 218 billion
Income Tax
Now...Calculate
20,000 tax
VAT
• VAT (Value Added Tax) is a tax that you pay when you buy goods and services in the EU (European Union), including the UK. If you have to pay VAT on something, it will normally be included in the price you see.
How much extra income do you
think the 5% VAT increase
Will make for the Government to
spend?
The Government estimates it will
make£13 billion by
2015
Who was closest?
How does the UK compare to the EU on VAT rates?
Super hard question...
What affect will the VAT rise have on businesses and
consumers?
National Insurance
Who Pays National
Insurance?
Do people pay a voluntary NI
contribution to the Government?
Does what you pay in NI affect
any benefits
you could get?
NI – how much will you pay?
Where does the rest of the money that the government needs - come from?
National Insuranc
e
Income Tax VAT
?
Where does the rest of the money that the government needs - come from?
National Insuranc
e
Income Tax VAT
£149 billion
borrowed
What does the government spend all its money on?
Where does the money go?
Health 122 billion
Education 89 billion
Public Order 35 billion
International Development
6 billion
Defence, industry, housing, social services and other
208 billion
Benefits 194 billion
The government has to pay interest on all the loans (debt) that it has....
Debt interest £43 billion
So what about the shortfall?
1. Spend less
2. Tax more
Spend less – on what?
3000 less prison place
Reduction in benefits
Did you meet the Lesson objectives?
1. To be able to discuss government spending2. To be aware of how the Government taxes
workers3. How businesses are affected by changes in
government spending and taxation
Extras• BBC do you get back as much as yo
u pay in? Video
• BBC video where does the government get its money from?
• www.revisisonstation.co.uk
• BBC interactive graphics government spending cuts
These extras will require an Internet connection to play
