§ Mr. HowardTo ask the Chancellor of the Exchequer if he will make a statement on the methodology used to calculate Treasury corporation tax forecasts. [R] [115305]
§ John HealeyCorporation tax is forecast using a microsimulation model on a sample of company tax assessments. The main tax determinants, such as trading profits, of the sample cases are projected forwards based on economic assumptions; annual tax liabilities and losses are assessed; and the results scaled up to give forecasts of total corporation tax liability. Estimates of receipts and repayments in each financial year are then compiled. Any changes in liabilities arising from Budget and other changes are allowed for. A separate model is used to produce forecasts of corporation tax on North Sea oil and gas.