21 October 2026
If you are covering the latest tax receipt data, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:
“A week out from the Budget, these figures show just how much the tax system has already been stretched to produce ever-increasing receipts through fiscal drag. If recent Budgets have been something of a smorgasbord of tax changes, this one increasingly looks like it will be more meat and two veg.
"Fewer headline-grabbing changes would be no bad thing after such a prolonged period of tinkering with the tax system. Yet despite these significant tax receipts, it is clear the government is still struggling to meet its fiscal needs. How the Chancellor balances the books while also balancing his political fortunes will soon be revealed.
Income Tax and National Insurance
“The Treasury collected £253.5 billion in PAYE income tax and National Insurance receipts between April and September, £18.2 billion more than over the same period last year.
"With expectations building that this Budget will contain fewer big tax changes, these figures are a reminder that the government does not necessarily need to keep pulling new tax levers to raise more revenue. Fiscal drag is already doing much of the dirty work.
"Frozen income tax thresholds combined with rising wages mean more people are gradually paying more tax, while others are being pulled into higher tax bands. This happens without any change to the headline rates of income tax and shows just how effective fiscal drag has become as a revenue raiser for the Treasury.”
Inheritance Tax
“Inheritance tax receipts reached £4.7 billion between April and September, £0.3 billion more than over the same period last year.
"While we are not expecting any big changes to the inheritance tax landscape at next week’s Budget, the regime is already set to change drastically in a matter of months as most unused pension funds and death benefits are brought into the inheritance tax net from April 2027. This is likely to drastically increase tax receipts in the future.
"Given the scale of that change, we can only hope the government takes another look at the gifting rules. Increasing the gifting allowances would give people greater scope to pass money down during their lifetime as more wealth is potentially dragged into the inheritance tax net. That may be wishful thinking, but the existing gifting allowances look increasingly out of step with the scale of the changes coming down the track.
Capital Gains Tax
“Capital gains tax receipts stood at £1.13 billion between April and September, £1 million more than over the same period last year.
"Following reports that CGT is going to be left alone at this Budget, it will be interesting to see whether the rumour mill alone has caused a spike in people realising gains because they were worried the tax was going to change.
"CGT is a particularly volatile area of tax because people have some control over when they realise gains. It was right for the government to signal that CGT was not an area lined up for change, but that may have come too late for some. Weeks of speculation can influence behaviour even when ultimately nothing changes.
"If we do see a meaningful increase in receipts, it will be worth watching whether that points to people bringing forward disposals ahead of the Budget. The possibility that people have made significant financial decisions based on changes that never materialise shows the problem with allowing the pre-Budget rumour mill to run for too long.”
