The Spending Review and tax measures
26 June 2013
The Chancellor announced more resources for HMRC but it's not clear how far this will go beyond earlier Government commitments. More HMRC resources are always a sensible move for the Chancellor as HMRC is the revenue raising part of government. These resources will be focused on tackling tax evasion which is a criminal activity; it's always been a major part of HMRC's efforts to keep the black economy under control.
There was little specifically on tax. The Chancellor's statement, especially the emphasis on intellectual capital and sticking to his plans, are consistent with his Budget speeches, including the patent box regime and keeping Britain open for business.
Whether the freeze on council tax is good news depends on whether you are a big consumer of local authority services. The Government is not raising in taxation anything like the amount it is spending, while trying to bring debt under control, so a freeze in tax inevitably means cuts of some description.
The big unanswered question is what will happen in 2015? Whoever is Chancellor in 2015 will have a strong temptation to introduce a noticeable tax rise in one of the big three taxes - income tax, national insurance (NIC) or VAT.
For more analysis on the Spending Review 2013 visit www.pwc.co.uk/spendingreview