23 April 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:
“Data out this morning reveal the government’s continued stealth tax regime raked in record amounts in the 2024/25 tax year. While indicative of a significant boost for government coffers that will bring some relief to the Chancellor, the figures also serve as a reminder of the painful burden placed on UK households.
Income tax and NICs up £17.6 billion
“PAYE income tax and NICs receipts for April 2024 to March 2025 came in at £486.9 billion, up by a huge £17.6 billion compared to the same period last year. Frozen income tax thresholds, which have now remained stagnant since 2021, have seen an increasing number of people paying income tax for the first time, as well as dragging many into higher rates each year.
“Without an explicit tax hike, and therefore without technically breaking its promise not to increase taxes on working people, the government has generated billions in extra income. What’s more, with employer national insurance payments rising from this month, this tax take will continue to climb.
CGT take slows
“Alongside the heavier income tax burden, the government has hammered Capital Gains Tax in recent years. The Annual Exempt Amount once sat at a relatively generous £12,300, but is now just £3,000 and means many more people are having to pay CGT on even relatively small gains. More recently, the Chancellor increased the basic rate of CGT from 10% to 18% and the higher rate from 20% to 24%. As a result, Capital Gains Tax receipts have continued to climb, but there are some indications that people are thinking twice before realising gains.
“CGT receipts hit £399 million in March 2025, bringing the 2024/25 tax year’s total to £13 billion. This is slightly lower than last year’s £14.5 billion. The higher rates and lower AEA could see more investors defer sales as they attempt to mitigate the tax, so we could see a slowdown in CGT receipts despite the harsher measures.
IHT receipts hit new record
“Inheritance Tax receipts for April 2024 to March 2025 are £8.2 billion, which is £0.8 billion higher than the same period last year setting a new record. IHT thresholds, including the £325,000 nil rate band and the £175,000 residence nil rate band, are frozen until 2030. With several years of the freeze remaining, an increasing number of families will find themselves needing to pay often hefty tax bills.
“Property prices have grown rapidly in recent years, particularly in areas such as London and the South East, which in many cases will leave little to no room for additional assets to be left to loved ones before the tax is applied. Additional policy changes, including restrictions on Agricultural Property Relief and Business Relief from April 2026, as well as unused pensions falling within the scope of IHT from 2027, will place additional strain on families.
“IHT has long since been a deeply unpopular tax, and its reputation is unlikely to improve any time soon. What was once viewed as a tax on only the wealthiest of families has spread to middle income families, many of which may not even realise they are affected.
“Tax bills are becoming increasingly difficult to mitigate, and this will only worsen as the freeze on the various thresholds continues and as policy changes set in. Seeking professional financial advice will be key to ensuring no more of your money goes to the taxman than is absolutely necessary.”
