21 August 2025
If you are covering the latest HMRC tax receipts and National Insurance contributions figures, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:
“HMRC’s latest tax receipts reveal a mixed picture for the UK’s fiscal health, which is increasingly being shaped by frozen thresholds, shifting policy, and growing uncertainty ahead of the Autumn Budget.
“Between April and July 2025, PAYE income tax and National Insurance contributions reached £160.6 billion, up £13.5 billion year-on-year. With income tax thresholds still frozen, more workers are being dragged into higher tax bands, while businesses are having to shoulder rising employer NICs. This stealth tax strategy continues to deliver for the Treasury, but not without some consequences.
“Meanwhile, inheritance tax (IHT) receipts continue to climb, reaching £3.1 billion between April and July – £0.2 billion higher than the same period last year. With nil-rate bands frozen until 2030 and property values still elevated, more estates are being pulled into scope. And with pensions set to be included from April 2027, the IHT net is tightening further.
“Looking ahead, rumours of a lifetime cap on tax-free gifts are causing some concern. Such a cap would mark a fundamental shift in how families pass on wealth, potentially capturing not just strategic transfers but also routine support between generations. Tracking lifetime gifts would be administratively complex and could lead to unintended behavioural shifts, from premature asset transfers to increased use of trusts. Any reform must balance revenue goals with the vital role intergenerational support plays in the UK economy.
“Meanwhile, housing market uncertainty is mounting. Reports suggest the Treasury is weighing new levies on high-value homes or gains on primary residences. If either of these were to materialise in the Autumn Budget, transactions could seize up as sellers consider sitting on their hands in the hopes that another government might reverse the changes. That would risk even tighter supply and, paradoxically, could push prices higher by intensifying competition, compounding problems for first-time buyers.
“With the Autumn Budget nearing, the government faces a delicate balancing act. Revenue needs are real, but so is the risk of overreach. Tax policy must be proportionate, predictable, and mindful of behavioural responses. Otherwise, it risks undermining both public confidence and the tax take itself.”
