Mr. Osborne was keen to emphasise that cutting government spending was the alternative to raising taxes. But we have already seen that restriction of reliefs such as for Capital Allowances, and pension contributions, plus cutbacks in benefits and credits, will affect taxpayers large and small.
Very large businesses with high energy bills are smarting, after discovering that many will have to pay more under the Carbon Reduction Commitment Scheme, and they will no longer benefit from reinvestment as previously promised. This may affect the majority of taxpayers indirectly, through higher prices on goods. But for most taxpayers, it may be how the Review influences HM Revenue & Customs, that has most effect.
The department will have to cut expenditure by 15% - ostensibly by efficiencies such as better use of IT. But the actual saving will almost certainly come from reduced manpower: current estimates range between 10,000 and 20,000 jobs may go. And IT is not widely regarded as HMRC's strongest suit. There are real fears that industrial action may be unavoidable.
However, £900M has been 'ring-fenced' to be invested over the next four years, specifically to claw back £7Bn of the taxes lost to evasion, fraud or "criminal attack" on the tax system, and avoidance. Again based on past history, (such as the recent Disclosure Opportunies), this is expected to prove optimistic. This 'tougher stance' will also extend to greater scrutiny of the tax affairs of all people earning more than £150,000 a year, and a 5-fold increase in prosecutions for tax evasion. one wonders whether HMRC's increased attention on avoidance will extend to MPs...
In the meantime, taxpayers and agents can probably expect further delays and errors, in their dealings with HMRC.
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