Rolling coverage of the latest economic and financial news
- Introduction: UK borrowed £22.3bn last month, an October record
- UK borrowed £215bn since April – a record
- Retail sales jump in early Christmas rush
- National debt now 100.8% of GDP, not seen since the early 1960s
- Rishi Sunak to put squeeze on public sector salaries
Speaking of tax….a new study has found that tax abuse by multinational companies and avoidance by rich individuals is costing countries $427bn a year.
This includes the impact of shifting profits out of the countries where they were generated into tax havens, where corporate tax rates were low or non-existent.
Related: $427bn a year lost to tax abuse by firms and rich individuals, study finds
HM Revenue and Customs (HMRC) has reported that UK tax receipts have slumped by over £70bn so far this financial year.
Its latest Tax Receipts & National Insurance Contributions report, published this morning, shows a sharp fall in takings since April.
“A large part of this relates to taxes deferred, particularly in relation to VAT (£38.7bn fall for the first 6 months) where businesses were permitted to defer all payments due for a period. Some of this cash will come back over the next couple of years.
The fall in Corporation tax is huge – almost £12bn over the first 6 months, suggesting total corporation tax receipts will be down by more than a third over the year as a whole. In October alone, receipts were down by almost £7bn, although this was partly offset by about £3bn higher receipts from the largest companies in September due to a change in their payment pattern.
The figures will be particularly unwelcome to Chancellor of the Exchequer Rishi Sunak as they further limit his scope for action as he prepares to deliver his economic forecast on Wednesday 25 November.
‘Some of the shortfall will reflect time-to-pay agreements negotiated by businesses. Provided those businesses survive, this tax will become payable in due course. It will be interesting to see how the Chancellor factors this into next week’s statement.
The slight rise in alcohol duty will be accounted for as people shifted their purchases from restaurants and pubs to supermarkets and off-licences. It also seems that people in the UK are smoking more.