Autumn Statement cuts won't stop tax revenues rising to highest ever levels

The tax cuts announced in the 2023 Autumn Statement won't prevent tax revenues rising to their highest ever levels, the Institute for Fiscal Studies (IFS) has warned.

The IFS stated that announcing tax cuts in response to 'highly uncertain' changes in assumptions about the UK's medium-term economic prospects 'does not feel like a recipe for good management of the public finances'.

It also acknowledged that the Chancellor's cuts to the rates of National Insurance contributions (NICs) put money back into the pockets of 27 million workers. However, it said the bigger picture means that the changes give backless than £1 of every £4 that has been taken away from households through changes to NICs and income tax announced since March 2021.

However, the business group did welcome the Chancellor's decision to make Full Expensing permanent but noted that the move indicates that the Autumn Statement was an event focused on medium-term growth.

Paul Johnson, Director of the IFS, said:

'The growth outlook has weakened. Inflation is expected to stay higher for longer. Higher inflation pushes up tax receipts by more than it pushes up spending on debt interest or social security benefits.

'His immediate cut to national insurance will put more money into workers' pockets when it comes in but won't be enough to prevent this from being the biggest tax-raising parliament in modern times. These cuts will also not stop tax revenues rising to their highest ever levels.'

Internet link: IFS website

About us

KBM UK Limited was established in 1987 as an accountancy practice offering quality business and accountancy solutions to owner managed businesses in London and surrounding areas.

Since inception, KBM has continuously raised the bar of its vision, expertise and technology to keep it abreast with the ever changing market trends.

Contact details

020 8992 9090

Accountants in Acton : KBM UK Limited, 1 Concord Business Centre , Concord Road , Acton, London W3 0TJ
Accountants in Luton : KBM UK Limited, 64 Alma Street, Luton, Bedfordshire LU1 2PL

Reg No : 05126385 | Reg Office : Acton office above

KBM UK Limited is registered as auditors and regulated for a range of investment business activities in the United Kingdom by the Association of Chartered Certified Accountants. Our registration details can be found on the Audit Register under registration number 1065993.

© 2024 KBM UK Limited. All rights reserved. We use cookies on this website, you can find more information about cookies here. powered by totalSOLUTION