Tax

Exchequer Returns June 2017 - Peter Vale commentary

Peter Vale Peter Vale

A strong set of tax receipts for June means that overall the figures for the first half of the year are close to forecast and comfortably ahead of the same period in 2016.

While income tax receipts remain sluggish, June saw a substantial surge in corporation tax receipts. This is significant as many large companies make their first tax payment in June, thus auguring well for full year corporation tax receipts. There was concern earlier in the year that corporation tax receipts were starting to slip, but the last two months will have done much to allay those fears.

So overall, after a sluggish start to 2017, tax receipts now appear back on track. VAT in particular has been a strong performer thus far, indicating consumer confidence has not been unduly dented by Brexit concerns.

Separately today we saw the EU continue its drive for more tax transparency, with the passing of proposals in the European Parliament that will see greater public reporting of the tax profile of large groups. Despite concerns over the release of commercially sensitive data, something that has been acknowledged in the proposals, it appears inevitable that in due course full transparency will be achieved by the EU. Unless other trading blocs follow suit, this could jeopardise the competitiveness of member states.