TaxAdministrationDarling warned of £6bn shortfall

Darling warned of £6bn shortfall

Chancellor will have to lift taxes by £240 per household to eliminate accounts shortfall, economists warn

Chancellor Alistair Darling is under pressure to admit the slowing UK economy
has left a multi-billion-pound shortfall in his accounts at the equivalent of
£240 per household, prompting a hike in taxes or more borrowings.

Economists expect Darling to borrow as much as £42bn in 2008/09 as a slowing
economy eats into government revenues – a £6bn increase on
HM
Treasury
‘s previous plans for the year, The Daily Telegraph
reports.

Accounting firm
Grant Thornton
said the cost is equal to £240 for every household. ‘There is a consensus among
economic commentators that there is a black hole of unsustainable borrowing and
it is this hole that will have to be filled with tax rises eventually,’ Maurice
Fitzpatrick, an economist at the firm, said.

Grant Thornton’s forecasts of a £6bn ‘overshoot’ in borrowing are in line
with City economists’ predictions, which indicate additional borrowings from
£4bn to £6bn over the coming year, followed by more rises in the two following
years.

Further reading:

Union attacks tax cut campaigners

Resellers prepare for Budget 2008

Read
story in The Daily Telegraph

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