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Hammond eyes tax windfall to reduce deficit

13-03-2018

Philip Hammond is unlikely to make significant spending commitments in the Spring Statement next week, despite forecasts of a £7.5bn windfall for the Treasury. The OBR is expected to revise down its forecast for the 2017-18 deficit to around £42.4bn from £49.9bn, thanks to higher than normal tax receipts from January’s self-assessment tax deadline. But a Treasury source said: “This is not the moment to make spending commitments. We have made great progress towards repairing the public finances but our debt is still too high.” The Telegraph’s leader agrees that a financial surplus is best spent on funding tax cuts. Elsewhere, Stella Amiss, head of tax policy at PwC, commented: “The chancellor appears to be steadfast about not announcing any major tax changes on March 13. This is good to see, from a legislative and practical point of view.” Meanwhile, Labour’s John Mc Donnell says the time has come for radical changes on investment and tax to make the UK fairer and more equal. In an interview with the BBC, the shadow chancellor said that Mr Hammond should use the Spring Statement to announce the end of austerity.

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