Buried in the small print of the Autumn Statement documents are predictions about the Exchequer’s future tax take, says the Times.
It shows massive increases in the amounts collected through income tax (up 38% to £155 billion over the next 5 years), inheritance tax (up 60%), stamp duty (up 89%) and capital gains tax (more than double). The reason is not higher tax rates but ‘fiscal drag’, with thresholds for taxes rising at a rate lower than inflation. For example, the 40% income tax threshold next April rises by just 1% to £41,865. After four years of below-inflation increase in the threshold under Chancellor Osborne, the number of higher rate taxpayers has risen from 3 million to 4.3 million and will top 5 million by the time of the next election. If the Chancellor uses sneaky tricks like this to raise more tax, says the Times, it’s no wonder tax avoidance has become so popular.