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The Treasury is facing a 'double whammy' of slow-downs in capital gains tax earnings, Chas Roy-Chowdhury has warned.
The head of taxation at the Association of Chartered Certified Accountants (ACCA) predicted that CGT receipts are due to decline steeply in two areas: second properties (both rented and purchased) and securities trading.
He added that the decline in mortgage lending and the aftershocks of Bradford & Bingley's demise as a popular mortgage lender for buy-to-lets will also have effect on the amount of money heading to the Government's coffers.
Plus, he said, 'capital gains receipts from shares will decrease because there is a fall in share prices. The market will again push down the level of capital gains tax that people pay to the taxman.
'Overall, even if the stock market begins to rally, the ACCA suspects there will be sharp declines in the amount of CGT that goes to the Exchequer over at least the next year.'
ACCA forecast that related income tax receipts will dwindle, too: first with the level of rental income declining, and then with a fall in income tax payments, as businesses' profitability reduces and the levels of dividends lessen.
