Recent HMRC data shows that the Treasury collected £786.6 billion in taxes in 2022/23 – a 9.9% increase on last year’s total of £715.3bn.
Receipts from Income Tax, Capital Gains Tax and National Insurance Contributions hit £47bn in March 2023 – accounting for over half (57%) of the total tax take that month.
Meanwhile, property price increases mean more families are now over the Inheritance Tax threshold, which raised a further £7.1bn – around £1bn more than the same time last year.
Business taxes for 2022/23 also rose significantly, jumping by £17.5bn to £84.9bn. According to HMRC, this was partly due to higher offshore receipts as a result of Russia’s invasion of Ukraine and the new energy profits levy.
The surge in total tax receipts can be largely attributed to recent tax threshold freezes, often dubbed “stealth tax rises”.
The inheritance tax nil-rate band is frozen at £325,000 until 2026, while both the personal allowance and higher rate threshold for Income Tax will remain frozen until 2028.
The Office for Budget Responsibility (OBR) predicts that Inheritance Tax receipts will raise £45bn between 2022/23 and 2027/28. The OBR expects tax revenues to increase further in coming years as property prices surge and wages rise with inflation.
Contact us to talk about your tax liability. Please contact Martin Back on 023 8046 1232.