20 June 2025
If you are covering the latest HMRC tax receipts and national insurance contributions data, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:
“HMRC’s latest figures for May 2025 mark another chapter in the government’s stealth-tax strategy. Despite no new headline tax rises, receipts continue to climb thanks to frozen thresholds and slashed allowances.
PAYE and NICs rise again
“PAYE income tax and National Insurance receipts for April to May 2025 came in at £84.6 billion—£6.1 billion higher than the same period last year. With income tax thresholds still frozen, many workers are paying a larger share of their earnings in tax simply due to modest pay rises, even when those increases fail to match inflation.
“This month’s figures also capture the first full month’s impact of the April changes to employer National Insurance contributions. The main rate of employer NICs rose from 13.8% to 15%, and the threshold at which employers begin to pay contributions was lowered from £9,100 to £5,000 per year. These changes are expected to generate an additional £8.6 billion annually and represent a clear shift in the burden towards businesses. While the policy may help shore up the public finances, it could also influence hiring decisions and wage growth in the months ahead.
Inheritance Tax continues its upward creep
“IHT receipts for April to May 2025 totalled £1.5 billion—£98 million more than the same period in 2024. With property values still high and nil-rate bands frozen until 2030, more estates are slipping into the IHT net, often without any deliberate wealth accumulation. Families can be caught off guard, particularly where no planning has been done in advance.
“And with future changes already legislated—including the tightening of business and agricultural reliefs, and the inclusion of unused pensions in estates from 6 April 2027—this upward trend is unlikely to reverse. For those concerned about inheritance tax, lifetime gifting remains a highly effective tool, but it must be carefully weighed against one’s own future financial needs. Utilising trusts can also be a good way of getting money out of your estate while still having a degree of control over how it is spent depending on the type of trust.
Tax pressures set to build
“As the country edges closer to the autumn budget, speculation continues about potential tax changes. Reports suggest Labour may look again at capital gains tax, dividend reliefs, and even consider further freezes to income tax thresholds. Combined with rising property and asset values, this could make the overall tax landscape significantly more punitive.
“In this environment, early and careful tax planning is essential. With thresholds still frozen and reliefs under review, the cost of inaction is only going to rise.”
