Recent figures show that HMRC collected £716bn in taxes in 2021–22, an increase of 22.5% over the previous tax year. Receipts from personal taxes including NICs were £394bn, ‘mainly due to strength in both employee earnings during 2021–22 and some self-assessed income streams and asset disposals during 2020–21, though also partly due to the deferred payments from the year before’ according to HMRC’s annual bulletin.
HMRC’s tax and NICs receipts statistics bulletin for August 2022 also shows that, from April to July 2022, receipts were nearly £27bn higher than for the equivalent period in 2021, with almost £18m of that increase coming from income tax and NICs – perhaps unsurprising given the number of people in employment increase by 874,000 over the same period and median pay increases of 6.6%.
Katharine Arthur, Partner at haysmacintyre, commented: ‘We are seeing the impact of the big freeze, with many tax threshold rates frozen until 2026, which has led to people tipping into higher brackets and therefore paying more tax. This has been compounded by inflation, explaining why total tax receipts have seemingly skyrocketed over the past two years.
‘The timing of this is fascinating, principally because it is hard to predict what either of our two potential Prime Ministers will do to resolve the issues. We’ll likely see blame on the pandemic, or the ongoing conflict in Ukraine, for what is essentially a rather non-Conservative tax policy. Will the new chancellor feel obliged to lower tax rates? Time will tell.’
Recent figures show that HMRC collected £716bn in taxes in 2021–22, an increase of 22.5% over the previous tax year. Receipts from personal taxes including NICs were £394bn, ‘mainly due to strength in both employee earnings during 2021–22 and some self-assessed income streams and asset disposals during 2020–21, though also partly due to the deferred payments from the year before’ according to HMRC’s annual bulletin.
HMRC’s tax and NICs receipts statistics bulletin for August 2022 also shows that, from April to July 2022, receipts were nearly £27bn higher than for the equivalent period in 2021, with almost £18m of that increase coming from income tax and NICs – perhaps unsurprising given the number of people in employment increase by 874,000 over the same period and median pay increases of 6.6%.
Katharine Arthur, Partner at haysmacintyre, commented: ‘We are seeing the impact of the big freeze, with many tax threshold rates frozen until 2026, which has led to people tipping into higher brackets and therefore paying more tax. This has been compounded by inflation, explaining why total tax receipts have seemingly skyrocketed over the past two years.
‘The timing of this is fascinating, principally because it is hard to predict what either of our two potential Prime Ministers will do to resolve the issues. We’ll likely see blame on the pandemic, or the ongoing conflict in Ukraine, for what is essentially a rather non-Conservative tax policy. Will the new chancellor feel obliged to lower tax rates? Time will tell.’
