UK government’s tax take this year remains around GBP 630 bln, but this is projected to go down, says David Harris of Invatrust Consultancy.
Tax revenues will likely take a hit ahead, fuel receipts are going down, and are predicted to be GBP 11bln lower ahead. VAT revenues are going down, and revenue from corporations and personal taxes are set to take a hit too.
Government spending is projected to increase ahead, with revenues to the treasury set to go down, the UK government faces a stiff challenge ahead.
Will UK see increase in taxes to fill the treasury sink hole?
Harris explains how the government can close the spending and revenue gap.
1 – Introduce new taxes
2 – Broaden tax base
3 – Scale back on relief
New taxes are going to be seen for sure. Harris believes that the pension industry remains the soft target, and might be exposed to taxation ahead, much like how personal tax is calculated.
Too many sink holes
The major issue is that the entire taxation system remains too complex. In this technologically advanced world, it will be more efficient to pay taxes directly, ignoring the middlemen. The logic is simple, pay for what you spend. Apart from plugging the administrative holes, the UK government will be required to cut down their spending to avoid this spending-revenue imbalance.