Worst decline in UK tax take since 1920s buried as MPs go on holiday
THE GOVERNMENT buried a slew of bad news yesterday, the day before politicians went on summer recess, including a giant £32bn slump in Treasury tax income due to the disastrous effects of the financial crisis.
Dire accounts from several departments were released in one go, where they would normally be staggered over time, in a bad news blizzard that was thought to have been planned to coincide with the recess.
The tax slump, revealed in a HM Revenue and Customs (HMRC) report, included a giant £21bn fall in VAT, corporation tax and stamp duty, fuelling fears the government’s spiralling deficit, as it forks out billions to bail out banks, is set to get worse than feared. In the worst such slump since the 1920s, a fall of £1,045 per UK taxpayer was revealed, meaning a 10p rise in income tax would have been needed to offset the falls seen in the 2008-09 fiscal year.
Also revealed yesterday was an admission that up to 10 per cent of tax credits paid out are the result of a fraud or error. This equates to almost £2.12bn in total.