FEEBLE GROWTH and dropping revenues are threatening the chancellor’s attempts to cut the deficit after it emerged the government’s tax take is down.
The Treasury narrowly kept within the Office for Budget Responsibility’s guideline of £126bn, in spite of borrowing £18.2bn in March. Official figures show a contraction on key tax figures, an ominous trend for the coming year.
Income tax revenue fell by 3.9% to £12.9bn and VAT receipts were down 1% to £9.4bn, while central government spending is up 4.2% year-on-year and total debt tipped over the £1tn mark.
The OBR said the drop in income tax returns was a result of the fall in financial sector bonuses, while corporation tax receipts were depressed by unusually large repayments and accrued VAT receipts were flat on a year ago.
Daniel Soloman of the Centre for Economics and Business Research told the Evening Standard: “The fly in Mr Osborne’s debt-reduction ointment will probably be slow GDP growth.
“This is a problem for the government’s debt-reduction strategy because slow growthgoes hand-in-hand with comparatively modest tax takings.”
Making Tax Digital will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs
MHA MacIntyre Hudson has partnered with cloud accounting software provider Xero ahead of the government’s requirement for digital records
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
Does Darwin's theory apply to taxation? Colin ponders...