Corporate taxes

It's important to think about the overall effects of taxes. Business rates bring in a handy £30 billion a year for government - abolishing them won't help local shops

The basic question of whether our tax system is fair is at the heart of many of our public debates. Discussions of whether ‘the rich’ or companies are paying their ‘fair share’ is regularly in, or underlying, the news headlines. These are important questions. If we want to ensure that we can raise the revenues to pay for the public goods and services that we all want, we need to be able to have sensible debates about how much tax we raise, who we raise it from and how we spend it.

IFS Director Paul Johnson writes in The Times.

Today, the Labour party will announce that they would not implement planned corporation tax cuts and would reverse most of the cuts introduced since 2010. This would be the first time the main rate of the modern corporation tax in the UK had been increased. The policy could raise around £19 billion in the near term, but substantially less in the medium to long run because companies would respond by investing less in the UK.

IFS Director Paul Johnson writes in The Times.

This presentation was given at the launch of the IFS Green Budget 2017.

The autumn statement, business rates, and local government

The impact of funding cuts and business rates retention in the North: latest IFS research

Last month, researchers at the Institute for Fiscal Studies launched first paper the from a new programme on local government finance. This paper looked at a range of issues including, changes in councils’ spending and revenues over the last seven years, and issues related to the evolving English business rates retention scheme (BRRS). Today, we publish two spreadsheets with information for individual council areas: a spreadsheet showing changes to councils’ spending on services between 2009–10 and 2016–17; and a spreadsheet showing relative gains and losses from the BRRS since it was introduced in 2013–14.

The results of the latest business rates revaluation reveal a growing divergence in property prices between London and the rest of the country. Increases in the value of non-residential property in the capital are set to raise rates bills by 11%, on average, increasing the tax take by over £700 million. This will be offset by reductions in bills and revenues in most of the rest of England, and especially the North, as property values fall behind. Growing differences in property prices reflect broader evidence of a growing divergence in economic performance over the last few years. And it will contribute to the ongoing trend of the UK government becoming more and more dependent on revenue from London to fund services across the whole – which may pose difficulties if more revenue sources are devolved to the local level. This observation discusses this and other issues related to today’s revaluation figures.

This presentation was given at the IFS post-Budget presentation on 17 March 2016.

This presentation was given to the Communities and Local Government Committee on 22 February 2016.

This presentation was given at the launch of the Green Budget 2016.