Are we paying more tax than ever?

Posted on

Alex Cobham of the Tax Justice Network noted an odd claim by the government on Wednesday. They said in an amendment to a Labour motion tabled in parliament that

 “the UK is collecting more tax than ever before.”

Alex set out to check and as he said (and I quote with permission):

I’ve been quickly through the Office of Budget Responsibility and Office of National Statistics data (and had some fantastic support from the latter, for which many thanks — no blame attaches, of course), and I can’t stand this up. Here’s a graph, of total (central government) tax receipts, with and without National Insurance Contributions (which OBR do include in tax). This leaves out local government tax — business rates and council tax.

UK tax receipts

Neither in the most recent period, nor across the coalition government’s term to date, can I see any pattern that could support the statement. In each case, tax receipts are lower in the last one year and the last four years are lower than most of the preceding thirteen. (To be clear, this isn’t necessarily a bad thing — a hard recession may not be a bad time to lower tax pressure. I’m just looking at the government claim here.)

Surely such a basic error wouldn’t be made in a parliamentary amendment, so there must be some other explanation. The only thing I can think of is that the government are referring to tax receipts in current, cash terms — but that would make no sense at all for a comparison over time, in fact it would be seriously misleading. So maybe there’s something I’m missing.

No Alex, you're not missing anything. They're just being seriously misleading. They are referring to cash. And that is a wholly inappropriate claim. And we are not paying more tax then ever.