19 June 2026
If you are covering the latest tax receipt data from the government, please see the following comment from Shaun Moore, tax and financial planning expert at Quilter:
Inheritance Tax receipts drop again
“Inheritance Tax receipts for May are £1.4 billion, which is £37 million lower than the same period last year, marking another month of lower receipts compared to last year's record total.
“While monthly figures can fluctuate, the broader direction remains clear, with more estates being drawn into scope as thresholds remain frozen and asset values persist.
“Following Andy Burnham’s just announced victory in the Makerfield by-election, the wider debate around wealth taxation is likely to move further into focus. Burnham has previously argued for scrapping Inheritance Tax in its current form and replacing it with a broader levy on wealth or estates, often linked to funding social care.
“However, he has also indicated that any near-term policy would remain within Labour’s existing manifesto commitments and fiscal framework. That suggests more radical reform remains a longer-term prospect, likely tied to a future general election rather than imminent change.
“In the meantime, the direction of travel is already established. Frozen thresholds and the inclusion of pensions from 2027 point towards steadily rising liabilities, placing greater emphasis on early and proactive estate planning.
“We are also now firmly in the final year where pension wealth remains outside the scope of Inheritance Tax, with unused pension pots due to be brought within the taxable estate from April 2027. That will significantly increase the number of families facing a liability.”
Income tax and NICs continue to drive receipts higher
“PAYE income tax and National Insurance contributions for May stand at £92.2 billion, which is £7.5 billion higher than the same period last year, continuing the trend seen through the previous tax year.
“This reflects the sustained impact of frozen income tax thresholds. Fiscal drag is now a central feature of the system, steadily pulling more income into higher tax bands and increasing the overall tax take.
“Even as earnings growth moderates in real terms, the tax take continues to rise. For many households, higher nominal pay is increasingly being offset by a rising tax bill, limiting any improvement in take-home income.
“With thresholds frozen until 2031, more people will continue to move into higher and additional rate bands, reshaping the tax base over the remainder of the decade.”
Capital Gains Tax highlights sensitivity to behaviour
“Capital Gains Tax receipts for May are £168 million, £64 million lower than May last year, again demonstrating how variable this revenue stream can be.
“While monthly movements can be uneven, the broader trend reflects a much tighter regime following the reduction in the annual exempt amount and higher CGT rates on shares and other assets.
“CGT is particularly sensitive to behaviour, with receipts often driven by the timing of disposals rather than underlying market performance alone.
“Continued political discussion around aligning CGT more closely with income tax adds further uncertainty. Even the prospect of change can influence behaviour, potentially bringing activity forward or delaying it, which in turn makes receipts harder to predict.
“For investors, this reinforces the importance of using tax wrappers and carefully managing the timing of disposals as the regime continues to evolve.”
