More in work, but income tax revenues set to slide

INCOME tax revenues are likely to come in lower than expected despite rising numbers of people in work, the official public finances watchdog has warned.

Robert Chote. Picture: Contributed

Robert Chote, head of the Office for Budget Responsibility, said the expected shortfall was because many of the new ­employees were going into relatively low-paid work.

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The revelations will be a further blow to Chancellor George Osborne’s attempts to tackle the deficit, which has remained stubbornly high since the recession even as unemployment fell faster than had been expected.

Chote said: “This continued story of earnings growing less rapidly than expected and employment growing more rapidly than expected does perhaps suggest that we’re more likely to be disappointed than to over-achieve on income tax receipts this year.”