A GCSE Information powerpoint about the Government and Economy by http://www.tes.co.uk/teaching-resource/Public-and-Private-Sector-6197407/

1. Title :Managing the Economy.
Aim: To learn how Government manages the Economy.
Osborne set to raise tax threshold
(UKPA) – 6 hours ago
Chancellor George Osborne is expected to take
hundreds of thousands more low earners out
of income tax by raising the threshold to
around £8,000 in his Budget on Wednesday.
Expectations of another increase in the
threshold - raised from £6,475 to £7,475 last
year - were heightened by Treasury Chief
Secretary Danny Alexander, who said the
Budget would set out "further real progress" Chancellor Osborne
towards the ultimate goal of taking anyone ( a government minister
earning less than £10,000 out of income tax. chosen by the Prime minister)

2. Government and the
Economy
• Keywords
• Government Economy Chancellor Prime Minister
• Tax Threshold Budget Pension
• Coalition Conservative Liberal Democrats Taxes
• Key People
• David Cameron
• George Osborne
• Nick Clegg
• Taxpayer

3. What is a Government
• The word Government has the key term Govern within
it.
• A Government has to be ruled by a majority
• Remember to Govern is to see over and to look after a
certain person or group.
• Therefore a Government is the name given to the
organisation of a country’s elected party.
• Due to our election we currently have a Coalition
Government.
• A coalition is the term given to a Government that has
been given due to election results to form an overall
majority.

4. Chancellor – George Osborne
• The current Chancellor is George Osborne
• He is chosen by the Prime Minister
• A chancellors role is to be responsible for
the income the country and its people.
• He sets a budget from which the country
will run its services.
Economy:
• He is in charge of the economy and how the The term is
country spends and collects its money. used to
• The money that is collected by Government describe the
is done through Tax. money cycle
• The two types of Tax are Direct and in which the
Indirect Taxes Government
runs the
country.

5. Direct Tax
• Direct taxes are Taxes (money) paid by taxpayers
through income or capital .
• Examples of Direct Taxes are Income Tax.
• Income Tax is taken directly by the Government
through wage distribution. The amount taken can be
found on a wage slip.
• Income Tax differs according to how much a person
earns.
• Other examples of Direct Tax include:
• Inheritance Tax (e.g. Money inherited from family)
• National Insurance (e.g. To contribute towards
pension)

6. Examples of Direct Tax
On this payslip
the Income Tax
taken from the
person is seen
as ‘PAYE TAX’
This payslip shows the
National insurance
contributions

7. Indirect Tax
• Indirect Tax is the term given to the money collected by
the Government on items or services we buy.
• The Government takes Indirect Tax through V.A.T. that
is applied on products or services that we buy
• V.A.T. stands for Value Added Tax.
• Examples of Indirect Tax is the VAT added to Gas,
Electricity or Fast Food that we buy.
• Other examples of Indirect Tax can also include Council
Tax
• (If you are over 18 and live in a property as your main
home, you will have to pay council tax for that property)
Like many taxes this is only paid according to how much
your property is worth).
• Some people don’t have to pay Council tax including
Students, Disabled people

8. Examples of Indirect Tax

9. What % of Tax do we pay?

10. Why Pay Tax?
• Originally used back in 1799 for Britain to fund
themselves for a war against France
• Today it is used for various reasons by the
Government
• The Government focus on Health, Defence, Education
etc.
• Taxes make up for 90% of the Government Revenue.
• It is also used to manage the Economy
• In 2008 the chancellor cut the rate of VAT from
17.5% down to 15% to try and help the economy

11. Duty
• There are certain items of extra Tax placed on
certain items because the Government wants less
people to use them.
• Examples of items that have Excise duty include:
Fuel, Tobacco and Alcohol.
• Do you think its fair for the Government to use
Excise Duty to control peoples behaviour?

12. How can Tax help poorer people?
Osborne set to raise tax threshold (rate)
Chancellor George Osborne is expected to take hundreds of
thousands more low earners out of income tax by raising
the threshold to around £8,000 in his Budget on
Wednesday.
Expectations of another increase in the threshold - raised
from £6,475 to £7,475 last year - were heightened by
Treasury Chief Secretary Danny Alexander, who said the
Budget would set out "further real progress" towards the
ultimate goal of taking anyone earning less than £10,000
out of income tax.

13. Key Words:
Chancellor = Government minister in charge of managing
the economy.
Direct Tax= Taxes in income , savings or for businesses profits.
Indirect Tax= Taxes on spending.
Income tax= Direct tax of income.
V.A.T= Value Added Tax is an indirect tax on products and services.
Duty = Indirect Tax added to goods such as fuel, tobacco and alcohol.
Pension= Money paid to people after they retire.
Interest Rate= a % of money that is added to loans or savings over time.

14. Today Chancellor Osborne has a problem.
He needs to pay back national debt because
if we don’t the repayments could become
too much. If he increases tax to pay the
debt he risks damaging businesses growth
and this will affect jobs and the economy.
If he damages business he will not He could try to get money to pay the
get as much tax back and have less
money to pay the banks. debt by cutting spending on public
services, such as Education. If he does
this he risks damaging education and
upsetting voters. What should he do ?

15. Tax V.A.T cut Tax V.A.T rise Banks
people have more people spend less. Government borrows
Money to spend. Business makes money and lowers
business makes more less money. Business tax. Business
money. Pay less tax and make
more money.
Banks Banks
Pensions: Government makes
Government pays Extra £60 per year
Sure banks have more
back loans and raises For all pensioners
Food and energy sales Money to lend
business tax. Business
Go up. Business makes Business activity
pay more tax and more money. increases.
make less money.
Interest Rates Interest Rates Interest Rates
Increased by 1% Increased by 1% Decreased by 1%
loans are more loans are more Borrowing increases
expensive. Sales expensive. Home Borrowers have more
of houses and owners stop spending Money. Spending
cars fall. business makes less increases. Business
money. makes more money.

16. Direct Tax : Income Direct Tax : Income Indirect Tax : Increase
tax raised. People tax falls. People in fuel duty. This
Have less money. Have more money. increases public and
Business profits fall. Business profits business costs. Business
rise. is harmed.
Indirect Tax : Decrease
in fuel duty. This
increases public and
business costs.
Business is harmed.

17. Title :Managing the Economy.
Aim: To learn how Government manages the Economy.
The government needs to get money from
people so that it can pay for public services
such as the army and hospitals.
There are two main types of tax.
1) Direct Tax = money taken out of
wages before the employee gets
their money.
2) Indirect tax= Tax that people have Chancellor Osborne
to pay if they buy or do certain ( a government minister
things. chosen by the Prime minister)