IFS Green Report - in the poo

The Institute of Fiscal Studies has published its annual study of the UK tax system. The report is over 300 pages in length and can be downloaded from the IFS website.

For the time challenged, a summary is that the UK is not in good shape, has a whopping budget deficit and a government which cannot make tax policy for toffee. Depressingly, the IFS paints a pretty bleak picture using the Treasury's own figures and then declares the Treasury's figures to be optimistic in any event.

To read that the UK is in the bottom 20% of comparable industrial countries for reducing its debt, and in the bottom 10% for reducing its structural budget deficit, hardly fills one with confidence even if, like the writer, you do not understand what these mean. Moreover, two out of three OECD governments now have net financial assets, but the UK is in the other third and has net debt.

Those right thinking people who agree with us in wanting a preferred CGT rate for equity investment, or who are similarly bemused at the peculiarity of the continued exemption from CGT on main homes, will be encouraged by the Report's comments on capital gains. It is an eye opener to read that the exemption from CGT for profits enjoyed on the disposal of main homes costs the Exchequer over £17 billion in tax foregone, which is three times the total CGT collected on the disposal of all other chargeable assets.