Jonathan Riley, Head of Tax, Grant Thornton UK LLP said:
"Is George Osborne the new record breaker? Playing with the lyrics of the theme tune of the 1970’s TV programme – a programme from his childhood – it seems that hypothecation is all you need.
"The Autumn Statement and Spending Review takes the chancellor’s approach to hypothecating taxes to new levels.
"We have seen the main rate of Corporation Tax reduced – to 18% by the end of this Parliament – but this being replaced by the cost of the living wage and the apprenticeship levy falling on corporates – both taxes by any other name. Details of the latter were announced today and this will see a tax of 0.5% of payroll being imposed – equivalent to increasing the take from Employers National Insurance by around 7%. And although for nearly all there will be a rebate to refund the amounts paid by all, this will add a bureaucratic burden.
"Hypothecation also featured in relation to the tampon tax – with the £15million raised being directed to charities that help to protect women. And there was also hypothecation with social care in mind as a 2% levy was imposed on Council Tax to fund these services.
"The abolition of the block grant to local authorities replaced by the ability for local councils to raise money and spend it as they deem best is another example of direction from the centre in all but name.
"Overall, this seems to be the direction for the Chancellor. To keep the "take” from the economy from taxation broadly the same but to be more directive as to how revenues are spent. And with a consequential increase in complexity and compliance burden – especially hard for dynamic, growth orientated businesses.
"All in all, the Autumn Statement almost set a record for its political guile, scale and depth. Perhaps the Chancellor will end up blowing his own trumpet, just as Roy Castle did at the end of his long running show!"