Amid much talk of further tax rises in the pipeline, to help offset the impact of Brexit and to support the Governments planned spending increase on the NHS, HMRC has announced that it had a record tax take in the 17/18 tax year.
The total take of just over £605 billion is up 5.4% on the previous year, an increase of nearly £1 billion over 16/17 revenues. With the exception of tax on hydrocarbon oils and capital gains tax, all other taxes registered an increase in the year.
Capital gains tax receipts dropped 7.1%, largely as a result of the reduction in the rate from 18% to 10% for non-higher rate taxpayers.
The figure of £605.8 billion in the year includes:
- £186bn in income tax
- £130.5bn in NI contributions
- £128.6bn in VAT
- £53.3bn in corporation tax
The compliance yield, which is the figure of taxes recovered that may otherwise be lost to UK PLC, went up over the year by £1.4bn to £30.3bn, £2.3bn ahead of the annual target. This points to a renewed vigour by HMRC to chase down and recover taxes.
In June this year, Prime Minister Theresa May, promised an extra £20 billion of spending on the NHS but subsequent analysis of the supposed Brexit ‘windfall’ has suggested this promise may lack substance and require hefty tax increases to help fund it and also prop up the economy during the transition period out of the EU. So, with a record year in the can and the likelihood of more tax increases being announced in the November budget, we may see ‘Record Tax Take’ as a headline being repeated year on year for the foreseeable future.