HM Income & Customs (HMRC) has reported a big enhance in tax receipts, offering a much-needed increase to the federal government following criticism over the current price range.
In line with main audit, tax, and enterprise advisory agency Blick Rothenberg, whole tax receipts have grown by £24 billion over the previous yr in comparison with the earlier 12 months.
Tom Goddard, a Senior Affiliate at Blick Rothenberg, commented: “The total tax receipts continue to grow year on year after a slight blip in August (where they were just under a billion pounds lower than August 2023) with total tax receipts up £24bn over the last year compared to the 12 months prior. This provides some much-needed financial optimism for the government after a tumultuous budget which had many fearing the worst.”
He added: “The total tax collected over the last 12 months is now over £842 billion and getting closer to the £850 billion mark, which will likely be hit in the next month with December traditionally being a good month for revenues.”
Goddard highlighted that Labour’s dedication to growing the nationwide residing wage will additional increase HMRC’s highest income stream—earnings tax. “Those increases, and indeed those from the Employers’ National Insurance contributions, won’t, however, filter through until after April 2025,” he famous.
Regardless of this, there has already been an approximate 8% year-on-year enhance in earnings tax receipts, surpassing the present 2.3% Shopper Value Inflation (CPI) determine, which itself rose by 0.6% within the final month. “Not only are those wages for the UK’s lowest earners going to continue driving this increased tax taking, but Labour’s affirmation that income tax thresholds and the personal allowance will remain frozen until the 2028/29 tax year will continue to drag more and more people into the higher and upper rate tax bands,” Goddard defined.
He additionally addressed the current give attention to UK inheritance tax, stating: “This tax brings in a relatively modest amount to the total tax take, with the prior 12 months’ total being just shy of £8bn, which is effectively 0.9% of the total HMRC receipts in the same period.”
Goddard added that it’ll take time earlier than any proposed adjustments to Agricultural Property Reduction (APR) and Enterprise Property Reduction (BPR) affect tax revenues. “Changes in those two reliefs won’t come through until April 2026, and Inheritance Tax itself is only payable until the end of the sixth month after the date of death. So, at best, anyone caught by that is not going to show through until the November 2026 figures are released.”
