The coalition government’s record on tax

In this briefing note, we assess the coalition government’s reforms to the tax system. Although it implemented some large tax rises early in the parliament – an increase in the main rate of VAT and in all rates of National Insurance contributions (NICs) – the government has also managed to find scope for significant tax cuts. Just three of these – increases in the income tax personal allowance (net of reductions in the higher-rate threshold), cuts to the main rate of corporation tax, and real-terms cuts to fuel duties – have a combined cost of £19.5 billion in 2015–16. But the coalition’s changes to the tax system go far beyond that, with a large number of smaller measures constituting the bulk of its activity.