A DRAMATIC FALL in corporation tax receipts should be a cause for concern for the government as it seeks to make further inroads into the deficit, top ten firm BDO has warned.
Figures produced by the Office for National Statistics show £1.36bn was brought into the public coffers from the country’s businesses in August, a 14% drop on the same month last year, when £1.58bn was generated.
Month-on-month comparison shows an even starker fall after £6.9bn was collected in July, meaning receipts fell 80%.
The figures also show income tax figures remained largely the same year on year, with £11.89bn collected in August this year, compared with £11.9bn in August 2014. Again, though, there was a significant fall month on month after July’s £19.7bn haul, which constitutes a 40% difference.
BDO tax partner David Brookes said: “Given that the government is aiming for a budget surplus by 2019/20, the negligible increase in tax receipts compared to last year will come as some concern.
“In particular the sharp fall in corporation tax receipts will need to be addressed and we would strongly recommend the backing of mid-sized businesses, particularly in their aspirations to expand internationally, to accelerate these.
“The notable year-on-year fall in stamp taxes should be seen in the context of an exceptional month for house sales last month resulting from a release of pent-up demand and we would expect things to normalise in this area over the following weeks.”
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,
While some resistance to change is to be expected, the degree of controversy surrounding HMRC's Making Tax Digital proposals has surprised the government
Kevin Reed discusses the worrying findings from HMRC on micro-businesses' problems handling Real-Time Information, and the latest thoughts on how accountants can provide value-added services