22 May 2025
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:
"HMRC’s latest figures mark the start of a new tax year, but the story remains much the same. The government’s stealth tax strategy is still quietly drawing in ever-growing sums.
PAYE and NICs rising again
"PAYE income tax and NIC receipts for April 2025 came in at £47.9 billion, which is £2.9 billion higher than the same period last year. With thresholds still frozen, more workers are being dragged into higher rates of tax simply by receiving pay rises that don’t necessarily even keep pace with inflation. It’s a highly effective tactic for boosting Treasury receipts without overtly raising tax rates. Reeves signalled that the freeze was going to come to an end in 2028 but whether this promise can be kept will depend on the state of the nation’s finances as we approach the autumn budget this year. Further upward pressure will come from the rise in employer National Insurance contributions next month. The full impact of this policy change will become more evident in the months ahead as the changes bed in.
Inheritance Tax continues to rise
"IHT receipts for April stood at £0.8 billion, which is £97 million higher than the same period last year, continuing the steady upward trend seen over recent years. With property prices remaining high and nil-rate bands still frozen until 2030, more families are being caught by IHT, many without realising until it’s too late. Upcoming changes to business and agricultural relief from 2026, and the inclusion of unused pensions in estates from 2027, mean this trend is unlikely to reverse any time soon. For those who are worried about IHT, gifting remains the best defence against it, but this should be weighed against your own needs.
More to come?
"Leaked proposals from Labour this week suggest the Treasury’s appetite for revenue may not yet be satisfied. The memo reportedly included a raft of potential revenue-raising measures such as reinstating the pensions lifetime allowance, scaling back dividend tax reliefs, and a higher corporation tax rate for banks. Combined with speculation that the additional rate income tax threshold could remain frozen beyond 2028, it is clear the UK’s tax landscape is evolving quickly and may become more punitive.
"For households feeling the squeeze, the compounding effect of frozen thresholds and shrinking reliefs makes careful tax and financial planning more important than ever."
