19 December 2025
If you are covering the latest HMRC tax receipts data, please see the following comment from Shaun Moore, tax and financial planning expert at Quilter:
HMRC’s latest tax receipts highlight a tax system that is increasingly being shaped by design choices rather than short-term fixes. With the budget now behind us, it is clear that frozen thresholds are no longer a temporary measure but a central part of how revenues are being raised. These figures will certainly bring some Christmas cheer to the Treasury even if it represents a nation paying ever more tax.
Income tax and NICs
PAYE Income Tax and National Insurance receipts for April to November totalled £309.6bn, an increase of £32bn on the same period last year. This reflects the ongoing interaction between nominal pay growth and static thresholds, which continues to pull more people into higher tax bands even where real incomes remain under pressure.
While headline tax rates have been left unchanged, the share of income being taxed continues to rise. In the run-up to the Budget there was speculation that income tax rates might increase or thresholds could be lowered outright. Neither happened. Instead, the decision to extend the threshold freeze delivers a similar outcome over time, but in a way that is less visible and easier to sustain politically.
Rather than relying on eye-catching tax rises, the Chancellor has opted for a series of incremental decisions layered onto a system that steadily increases the tax take by default. For working households, this means higher marginal rates are increasingly encountered earlier, even without a single moment that feels like a clear tax rise.
Capital gains tax
Capital Gains Tax receipts for the latest month stood at £224m, with year-to-date receipts of £1.58bn. In theory, the scope for higher CGT revenues is clear. The annual exempt amount has been cut sharply in recent years, and higher rates on many assets have increased the potential tax due on disposal.
However, the receipts data continues to illustrate how sensitive capital taxes are to behaviour. Faced with larger liabilities, investors tend to delay selling, reduce disposals or restructure their affairs, which can dampen receipts despite a tougher regime. As a result, CGT revenues remain volatile and, at times, weaker than might be expected.
This helps explain why further increases to CGT rates were not considered by the government at the last budget. The Government has repeatedly emphasised the importance of encouraging investment and broader participation in capital markets, and pushing rates higher risks discouraging the very activity needed to support long-term growth.
Inheritance tax
Inheritance tax receipts rose to £5.8bn, up just £84m on the same period last year, but continues a trend that is now firmly embedded. At the budget, there were no major additional changes to IHT but the continuation of frozen thresholds will drag more people into paying it.
With the nil-rate band still fixed at £325,000, rising property values and accumulated savings mean more estates are being drawn into IHT, often among families who would not traditionally consider themselves wealthy. What was once viewed as a tax affecting a small minority is steadily becoming a broader concern.
That pressure is set to intensify further. From 2027, pensions are due to be brought into scope for inheritance tax, significantly expanding the tax base at the same time as thresholds remain unchanged. For many households, pensions now represent one of the largest components of wealth, meaning future liabilities could be far larger than people expect.
Against this backdrop, discussions around lifetime gifting limits carry added significance perhaps even one to broach around the Christmas dinner table. Any move in this direction would represent a meaningful shift in how wealth is passed between generations. While the detail of any future reform remains uncertain, the direction is clear: more estates, over a longer period, are likely to face inheritance tax.
Taken together, the receipts figures point to a tax system that is widening its reach rather than raising its voice. For households, this makes forward planning less about reacting to big announcements and more about understanding how gradual policy choices affect them over time.
