The key feature of today’s Exchequer figures is the strength of the VAT returns for March.
What is striking is that the ongoing Brexit uncertainty does not appear to be impacting on consumer spending. VAT receipts remain healthy, ahead of target and significantly ahead of last year.
We had expected more cautious consumer behavior, with income diverted to saving rather than spending. This doesn’t appear to be happening, although clearly a hard Brexit could significantly alter that dynamic.
Income tax receipts for March were positive after a relatively weak February, although that weakness means the figures for the year to date are behind target.
It’s still too early to draw any conclusions from the corporate tax figures. Notwithstanding that, and bearing in mind that the Minister had already stated that he expects a weaker 2019, figures for the year to date look strong.
So overall a good first quarter, particularly given Brexit uncertainty and global economic conditions.