20 December 2024
If you are covering the latest HMRC tax receipts and national insurance contributions figures, please see the following comment from Shaun Moore, tax and financial planning expert at Quilter:
IHT take soars
“Christmas has come early for the government, as this morning’s figures from HMRC reveal inheritance tax receipts for the period of April to November 2024 climbed to £5.7 billion, an increase of £0.6 billion compared to the same period last year.
“More and more people are being ensnared by inheritance tax, and this will only increase. With the IHT threshold frozen until 2030, coupled with pensions being added to the taxable estate from April 2027, the government’s coffers will get a substantial top-up in the coming years.
“Farmers will also start to add to these figures as Agricultural Property Relief becomes less generous. This could result in farming families facing bigger inheritance tax bills, which could force difficult decisions about the future of their farms. Additionally, the government’s changes to reliefs for AIM shares and Business Relief are also expected to boost its revenue.
CGT surge
“Capital Gains Tax (CGT) receipts have also increased, thanks to a combination of people selling off assets ahead of the widely anticipated CGT increases before the budget, as well as the impact of those tax hikes. October saw a marked increase in tax take, and this morning’s figures show November followed suit. CGT bills totalled £222 million in November, and there has now been a £230 million increase in tax take between April to November this year compared to the same period last year.
Rising PAYE and NICs
“PAYE income tax and National Insurance contributions (NICs) have also been rising exponentially, resulting in a total tax take of £277.6 billion so far this tax year, a £6.7 billion increase year on year. This is likely to continue rising as changes to employer NICs, including both an increase in the rate as well as a reduction in the earnings threshold at which employers begin to pay NICs, are expected to significantly boost the government’s revenues.
“Fiscal drag is a tried and tested policy on which the government has grown heavily reliant, and the latest budget will only exacerbate its impact. Looking ahead, the government’s tax take is expected to soar, all without increasing headline tax rates. However, it will need to tread carefully and monitor the long-term impacts of its policies on taxpayers, as well as ensuring they do not weigh too heavily on economic growth.
“Ultimately, with tax bills on the rise, careful financial planning tailored to people’s personal circumstances and financial goals will be vital.”
