Treasury Committee criticises government tax targets

Treasury Committee criticises government tax targets

Tax targets set by the government are criticised by the Treasury Select Committee after yield targets from Swiss deal are badly missed

THE ACCURACY of the government’s tax targets have been queried by the Treasury Select Committee.

The yield from tax agreements such as the UK-Swiss deal has fallen well short of expectations, with that particular arrangement only generating a quarter of the £3bn target in 2013. The deal overall was thought to be worth £5bn to the public purse, but Office for Budget Responsibility figures show just £800m has been collected since it came into force in January 2013.

In a report on December’s Autumn Statement, the committee criticised the validity of such predictions.

With little more than a week until the Budget is due, the criticism adds to the pressure chancellor George Osborne is under following the disclosure by the OBR of a £20bn black hole in the public finances.

As a result, an additional year of public spendin austerity may be required in order to balance the UK’s books. The models, the OBR said, suggest the government should refrain from relying on an economic recovery to cover the shortfall.

Committee chair and Conservative MP Andrew Tyrie (pictured) said such projections on tax were “inherently extremely uncertain” and the government should avoid placing concrete figures upon them.

He said: “The committee warned in its report on the Autumn Statement 2012 that the forecast revenues from the UK-Swiss agreement – at £5.3 billion – were subject to uncertainty and that the proceeds may not meet expectations. These concerns appear to have been justified.

“Even after the event it is often very difficult to establish how much a particular measure has raised. The more transparency about the yield, and therefore each proposal’s effectiveness, the better.

“The OBR should look again at how the government accounts for projected revenues, based on previous experience.”

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

Professional Services Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine

Accounting Firms Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021

Making Tax Digital Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource