Tax figures point to economic recovery, claims BDO

by Calum Fuller

More from this author

28 Aug 2014

  • Financial Director
  • Comments
BDO logo

FIGURES showing increasing yields in key areas of tax are pointing to improving economic performance, BDO has claimed in its first Tax Tracker report.

An increase in income tax receipts, up 4.1% on July last year at £18.6bn, illustrated an improving job market, while stamp taxes, paid on economic activity such as property and share transactions, were up 11.7% at £1.3bn. They were bolstered by the strength of the London property market and the buoyancy of UK equity markets, the top ten firm said.

BDO based its conclusions on official figures from the Office for National Statistics.

VAT receipts showed an increasing number of transactions in the economy, and hit £8.9bn. Presented as a three month average (May-July 2014), in order to smooth out fluctuating payment dates within a quarter, receipts were up 7.4% on a three month average compared to the same three month period last year.

Although corporation tax receipts of £7.3bn represented a seemingly disappointing 3.9% fall compared to July last year, the shortfall can partly be attributed to the 1% reduction in the headline rate in April to 21%. The direct impact of such a reduction would have been a 4.5% decrease, so July's fall in receipts still represents an increase in corporate output, BDO said.

Tax partner Richard Rose said: "Although the overall picture in terms of borrowing is less positive than forecasted these July figures are still encouraging.

"An increase in VAT receipts and stamp taxes compared to the same period last year are a clear and direct indicator that the economy is picking up. Receipts from these transactional taxes respond more quickly than income and corporate tax receipts and the strong performance is a reflection of increasing confidence across the economy."

Visitor comments

blog comments powered by Disqus
display:none

Add your comment

We won't publish your address


By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

Submit

Newsletters

Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials

Careers

Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you

Briefings

budget-management

Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.

cchcover

iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.