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Subdued share trading to hit tax income

The UK government is set to suffer a significant fall in tax income related to share trades as activity on the UK stock market has now fallen back to 2002 levels. The government banked a record £4.2 billion in the 2007/8 tax year due to the 0.5% stamp duty charged on each and every share transaction. However, the figure for this year will be nearer £3 billion and many experts believe it is unlikely to hit the record £4.2 billion in the foreseeable future.

The UK government has many different forms of tax income and income streams connected solely to the UK economy. So as a consequence, when the UK economy is subdued and investment markets are concerned about the short to medium-term outlook the government will immediately take a hit on income from this particular area. The truth is that the overall recovery in UK government income hinges fairly and squarely at the door of the UK economy which illustrates why the government is keen to inject more capital into this area.

Many people may be surprised to learn of the significant downturn in stamp duty income from the UK stock market bearing in mind that shares have been surprisingly buoyant of late, when you take into account the economic background.

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