21 December 2023
If you are covering the latest HMRC tax receipts and National Insurance contributions statistics, please see the following comment from Shaun Moore, tax and financial planning expert at Quilter:
“New figures from HMRC this morning reveal PAYE income tax and National Insurance receipts from April to November 2023 climbed to £263.5bn while inheritance tax receipts hit £5.2bn, £12.1bn and £0.4bn higher than the same period last year, respectively.
“This significant growth shows just how much of an impact the Chancellor’s frozen thresholds continue to have. However, the 2% cut to National Insurance from 12% to 10% for the main rate of Class 1 employee NICs announced at the recent autumn statement will bring a welcome increase in take home pay for workers in the new year. The 2% cut to NI will allow basic rate taxpayers to save a maximum of £754, and in the coming months we can expect to see the total PAYE income tax and NI receipts to slow somewhat, but it is unlikely to counter the rapid increase seen as a result of frozen income tax thresholds and inflation driven wage growth.
“Inheritance tax receipts, on the other hand, are expected to continue rising and we will likely see them beat the previous £7.1bn record before the end of the tax year. It had been widely rumoured that the government was looking to make changes to its IHT rules, but at least for now more families will be topping up government coffers as they are caught by the IHT net.
“IHT is a highly emotive tax that can split voters, so we can expect it to continue being a battleground policy for both the Conservatives and Labour as we near the general election. Though Jeremy Hunt opted not to make changes during his latest statement, we are expecting a budget to take place in March during which it could resurface if the Tories view it as a vote winner. Either way, some form of simplification of the tax is overdue.
“Financial planners can help people manage their tax affairs to optimise their money. The rules and restrictions surrounding aspects of IHT such as the residence nil rate band can be difficult to navigate, and with an increasing number of people facing unexpected IHT bills, seeking professional financial advice can be highly beneficial in terms of ensuring you plan effectively to mitigate unnecessary costs.”
