21 March 2024
If you are covering the latest HMRC tax receipts and national insurance contributions statistics, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:
“Despite the cut to national insurance, the government’s tax take has continued to soar. New HMRC figures released this morning reveal PAYE income tax and NIC1 receipts for April 2023 to February 2024 were £369.1 billion, which is £23.4 billion higher than the same period last year.
“These figures include the first two months of the government’s 2% cut to national insurance from 12% to 10% for the main rate of Class 1 employee NICs, and this morning’s data suggests it has done little to slow the rate at which the government’s increase in tax take grows. Though the Chancellor confirmed at his spring budget that a further 2% cut will be implemented from 6 April, we can expect that the fiscal drag effect driven by frozen income tax thresholds will keep the government’s coffers well topped up.
“The Tories had been under significant pressure to make the budget a giveaway bonanza to help rally support as they near the election. Though the additional cut to NI which, when combined with the original 2% cut, allows basic rate taxpayers to save a maximum of £1,508 a year will be welcomed by households facing continued financial pressures, it could be a case of too little too late for the Conservatives. What’s more, national insurance is a crucial element of funding for public services and many people will be wondering how such a tax cut, alongside the suggested abolition of NI in the longer term, will impact the NHS, schooling and other state support.
“Inheritance tax receipts for April 2023 to February 2024 were £6.8 billion, £0.4 billion higher than the same period last year and just £0.3 billion off of its record breaking total take last year. Inheritance tax went untouched at the Chancellor’s spring budget despite rumours in the weeks beforehand, and this morning’s tax take figures illustrate exactly why the Chancellor would have been keen to leave it well alone.”
