George Osborne told MPs yesterday that cutting the top rate from 50p to 45p raised an extra £8bn in tax revenue, a claim regurgitated without checking by most of the press today.
Figures from the HMRC do show that in 2013-14, after the top rate in tax was cut, taxpayers paid £8bn more to the exchequer.
But even the Financial Times was forced to admit, near the end of its article, this was misleading:
The increase is likely to be largely a result of wealthy taxpayers delaying taking bonuses and dividends until the rate cut took effect. In 2012, the Office for Budget Responsibility forecast that £6.25bn of income would be shifted from 2012-13 to 2013-14. Together with a small “underlying behavioural effect” it predicted that the rate change would cut liabilities by £3.4bn in 2012-13 and increase them by £3.3bn billion in 2013-14, at a one-off cost to the Exchequer of £100m-£200m.
Or to put it more simply, as Jolyon Maugham does:
tax receipts were artificially low in 2012-13 (because people delayed receiving income until rates fell) and were artificially high in 2013-14 (when those delayed receipts were received). Combine those two numbers and you may well explain your £7bn jump.
(That £7bn refers to the HMRC projection, compared to the £8bn actual figure. The point remains the same)
The HMRC knew this would happen, and in fact they predicted in advance that tax revenues would fall and then artificially jump.
Osborne is proving to be dodgier than a snake-oil salesman.