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Taxes (Accruals Adjustments)

Volume 408: debated on Thursday 3 July 2003

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To ask the Chancellor of the Exchequer (1) if he will list the accruals adjustment on taxes for each year since 1996–97 or the earliest year for which data are available, whichever is the later, with reference to the accruals adjustments on taxes figures in Table C8 of the 2003 Budget, HC 500; [121324](2) if he will list the reasons for the projected rise in accruals adjustments on taxes between 2002–03 and 2003–04, with reference to the accruals adjustments on taxes figures in Table C8 of the 2003 Budget, HC 500; and if he will make a statement; [121325](3) with reference to the accruals adjustments on taxes figures in Table C8 of the 2003 Budget, HC 500, if he will list for each tax for which the accrued receipts

(a) differed from the cash receipts in 2001–02, (b) are estimated to have differed from the cash receipts in 2002–03 and (c) or are projected to differ from the cash receipts in 2003–04, the difference between the cash receipts and the accrued receipts for (i) 2001–02, (ii) 2002–03 and (iii) 2003–04. [121326]

The following table summarises the accruals adjustments on taxes and national insurance contributions from 1996–97, consistent with the figures given in Table C8 of Budget 2003 (HC 500).

Accruals adjustments on taxes and national insurance contributions
£billion
YearCustoms and ExciseIncome TaxSocial security contributionsOther taxesTotal
1996–97-0.10.60.30.51.3
1997–98-0.40.30.60.30.9
1998–990.10.60.00.61.3
1999–20002.81.10.8-0.14.7
2000–010.60.91.70.53.6
2001–020.9-0.10.0-0.10.6
2002–030.30.2-0.7-0.1-0.3
2003–040.61.31.8-0.13.6
These accruals adjustments are defined as the difference between taxes accruing for the year and actual cash receipts in that year. They can vary considerably from year to year and from tax to tax reflecting changes to the timing of cash payments, changes to the tax system, behavioural changes by taxpayers and the rate of growth of the tax base. A combination of these factors explains the increase between 2002–03 and 2003–04. As explained in paragraph C85 of Budget 2003, this is partly because of the effect of the national insurance contributions measures announced in Budget 2002.