What Won't Be in Your Tax Statement | AccountingWEB

What Won't Be in Your Tax Statement

As the Budget bears down on us, it is interesting to note that what most of us would regard as a "leak" is now legitimised by terms such as "advance announcement".

George Osborne has become the master of the false advance announcement. The Chancellor appears to love releasing information about an unpalatable change to taxation in the days or even weeks leading up to a major announcement, which he then completely ignores when the big day comes.

This time around, will it be the 45% rate of income tax that turns out to be the early April Fools' Day joke? A Guardian poll suggests that two-thirds of the population regarded it negatively so there will be an incentive for populist Mr Osborne to drop it, at least until closer to the next election.

One advance announcement that is guaranteed to be enacted in the next couple of years is the policy of giving a tax statement to every taxpayer. Many of us will already receive equivalent documents from their local councils to explain where Council Tax goes.

The first one ever might have seemed mildly interesting but thereafter, this has just boosted the paper recycling bill for Camden. If nothing else, in view of the cost of preparing these documents, it would be good to have the opportunity to indicate a desire to recycle prior to printing.

We will all have a fairly good idea of the items that are likely to figure large in these new tax statements. The cost of providing health resources, paying for the elderly and the young who require educating will each prove to be significant.

Picking up on last week's column, the figure that I did not expect to see, even though it will be significant, even if just based on HMRC's estimates which are likely to be under-stated such is the lack of knowledge about the statistic, is our old friend the tax gap.

Even if this figure is a mere £35 billion, it will still take pride of place up with the big boys of public expenditure. Were the true figure ever to be discovered, it is highly likely that it would take several steps further up that league table.

If the statistics on the tax gap were published in this way, they would presumably show that it was costing the average taxpayer several thousand pounds a year. This would not only inform but also force the hands of the Treasury and HMRC and might even make them take substantive action (perhaps a full-scale amnesty?) to recover a much larger proportion of this money mountain that is just sitting there waiting to be collected.

So will this happen? Don't bet on it!


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