Here’s another example of the OBR shrugging its shoulders at coalition policy.
The Office of Budget Responsibility reviews the Lib Dem-backed crackdown on tax avoidance and concludes that it will have no impact on compliance rates.
This is a bit embarrassing for the Treasury, particularly given they expect the policy to raise at least £7bn by the end of the parliament. Much like the coalition immigration policy, the OBR is almost saying the government may as well have not bothered.
They of course put it in a slightly more diplomatic way:
The Spending Review 2010 settlement for HMRC included overall resource savings of 15 per cent. This assumed 25 per cent efficiency savings and a £900 million investment to addressthe tax gap and tackle tax avoidance and evasion.
This included measures to increase criminal prosecutions, tackle offshore evasion, extend HMRC’s coverage of high risk areas and the greateruse of debt collection agencies.
Inevitably there are always large uncertainties about the effects of both the efficiency savingsand additional investment. As a result, we have not included the impact from either factor in the November forecast.
Jim Pickard
Kiran Stacey