22 January 2026
If you are covering HMRC's latest tax receipt data, please see the following comment from Shaun Moore, tax and financial planning expert at Quilter:
HMRC’s latest tax receipts for December may look encouraging at first glance, but the headline figures flatter to deceive. While they offer the Treasury a positive way to close the calendar year, they increasingly reflect a tax system shaped by structural design choices rather than a genuine improvement in economic conditions or household finances.
Income tax and NICs
PAYE Income Tax and NICs receipts for April 2025 to December 2025 are £347.8 bn, which is £36.3 bn higher than the same period last year.
December is often boosted by bonus payments and year-end pay adjustments, which can temporarily inflate the figures. However, the more persistent driver remains fiscal drag. With income tax thresholds frozen, a growing number of people are being pulled into higher tax bands or paying more tax on the same real level of income.
While headline tax rates have not changed, the share of income being taken in tax continues to rise in the background. This means higher marginal rates are being encountered earlier in people’s careers, without any single moment that feels like a traditional tax rise.
Over time, this approach delivers a steady uplift in revenues, but it does so by gradually stretching household budgets rather than reflecting broad-based improvements in productivity or living standards.
Capital gains tax
Capital Gains Tax receipts for December came in at £231m, compared with £335m in 2024. However, CGT receipts from April to December total just over £1.8m just below last years figures for the same period.
In theory, the scope for higher CGT revenues remains 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.
In practice, the data continues to show how sensitive capital taxes are to behaviour. Faced with larger potential bills, investors often delay selling, reduce disposals or restructure their affairs, which can dampen receipts even under a tougher regime. As a result, CGT remains one of the most volatile parts of the tax system and an unreliable source of steadily growing revenue.
Inheritance tax
Inheritance tax receipts reached £6.6bn in December, which is £0.2bn higher than the same period last year.
Although growth in IHT receipts can appear relatively modest month to month, the longer-term trend remains firmly upwards. With the nil-rate band frozen at £325,000, rising property values and accumulated savings are steadily pulling more estates into the tax net.
What was once viewed as a tax affecting a relatively small minority is increasingly becoming part of mainstream financial planning, including for families who would not traditionally consider themselves wealthy.
That pressure is set to intensify further in the years ahead, particularly with pensions due to be brought into scope for inheritance tax from 2027.
How to plan
With the end of the tax year now only a few months away, all of these figures are also likely to sharpen minds for households concerned about how much tax they are paying. Making use of available allowances, such as ISA contributions, pension funding where appropriate, and the annual gifting allowance, can still play an important role in managing liabilities and preventing fiscal drag from doing even more damage over time.
For many families, planning ahead is becoming less about sophisticated tax avoidance and more about simply protecting as much of their income and savings as possible from a system that is becoming more demanding each year.
