Tax revenues are forecast to be £690 billion in 2017-18. That is 34% of national income. Two-thirds of receipts are raised from just three taxes – income tax, National Insurance contributions and VAT. In 2018-19, receipts are forecast to reach their highest level since the 1980s. Relative to 2010, the taxman will be raising more from VAT and NICs, but less from income tax and substantially less from corporation tax. A handful of smaller, and, in some cases, new taxes have become more important. The next government will face a number of challenges, including the fall in income tax receipts as a result of the growth in self-employment.
In the run-up to the 2017 general election we will be publishing analysis on what has happened to taxes to date and what the parties are proposing.
IFS Mirrlees Review
In 2011, the IFS Mirrlees Review produced its final report, Tax by Design, presenting a picture of coherent tax reform whose aim is to identify the characteristics of a good tax system for any open developed economy, to assess the extent to which the UK tax system conforms to these ideals, and to recommend how it might realistically be reformed in that direction. Research also considers the ways in which the tax system affects firms’ decisions, including decisions over how much to invest, which assets to invest in and where to locate activities.
