Press release

Exchequer returns April 2015 – Peter Vale commentary

Peter Vale Peter Vale

Strong Exchequer figures provide further evidence that people are continuing to spend. Of particular note are the very strong stamp duty figures for the first three months of the year.

This is yet another set of strong Exchequer figures, with tax receipts continuing to remain buoyant and well ahead of both last year and targeted returns. The figures for March include VAT receipts for the post Christmas sales period, with further evidence in these numbers that people are continuing to spend. The strong labour market is evidenced by higher income tax receipts, with more people at work earning more money.

The figures throw up some interesting statistics. Of particular note is the very strong stamp duty figures for the first three months of the year, likely evidence of both the increased activity and higher prices in the property market late last year. With indications that property prices have stabilised in recent months, we might expect to see this figure dip in the coming months.

Also of note is that capital gains tax receipts are significantly behind last year’s figures in percentage terms, albeit that we are only three months into the year. High CGT rates do not encourage compliance and it is possible that noncompliance partly explains the drop in receipts. With asset prices generally increasing, one would have expected CGT receipts to reflect this.

Overall, the figures will encourage many to believe that further tax cuts are on the way in October. If current trends continue between now and Budget Day, it would be a surprise if tax cuts were not a feature of the Budget Statement. We may get a better sense of the Minister’s thinking in his “Spring Statement” later this month.