HMRC Reports Record Tax Collection in 2023/24
The latest figures from HMRC have painted a picture of the UK’s fiscal landscape, with a record-breaking £827 billion in taxes collected in the 2023/24 tax year. This marks a significant 5% increase from the previous year. Notably, income tax receipts saw a substantial leap, jumping 10% year-on-year to an impressive £273.3 billion.
Amidst the economic shifts, PAYE income tax receipts experienced an 11.4% growth, while self-assessment income tax saw a slight decrease of 1%. The reduction in employee National Insurance Contributions (NICs), following cuts introduced in November 2022 and January 2024, was reflected in the fall to £60.9 billion, down by 6% from the previous year.
Joe Neal, Tax Manager at Blick Rothenberg, highlighted that the increased tax takings were largely from salaried employees, who faced higher taxes due to wage increases averaging 6.1% in the year to January 2024. These pay rises, intended to combat rising living costs, inadvertently nudged many into higher tax brackets.
Air passenger duty also saw a significant uptick, rising by 21% to £3.8 billion, a reflection of the post-pandemic resurgence in air travel and changes to duty rates. Conversely, stamp taxes witnessed a notable decline, with Stamp Duty Land Tax receipts plummeting by 24% to £11.6 billion.
Paul Falvey, a tax partner at BDO, pointed out that middle earners were most affected by the freezing of tax thresholds, which contributed to the rise in income tax germany receipts through PAYE. The slight decline in self-employment could be attributed to IR35 rules pushing freelancers onto payrolls.
The housing market’s slowdown was evident in the reduced Stamp Duty Land Tax receipts, correlating with a 17% drop in home buying and lower housing transactions throughout the year.
Inheritance tax also continued its upward trend, with receipts increasing by 5.8% year-on-year to £7.5 billion. Neal from HMRC emphasized that high inflation and wage growth, coupled with frozen tax thresholds, were key factors behind the record tax takings for various taxes including income tax germany, VAT, and corporation tax.
Business taxes and VAT collectively rose by nearly £20 billion, with corporation tax receipts alone surging by 11.6%, reflecting the increase in the main rate to 25%. Nigel Holmes from Ryan underscored the impact of higher taxes and inflation on businesses and stressed the importance of seeking professional advice to maximize tax relief claims.
Neal also expressed concern over the decrease in self-assessment income tax receipts, suggesting that sole traders and partnerships may be facing reduced profitability due to inflationary pressures. He referenced the government’s £200 million funding initiative announced in the Spring Budget as a potential support for small businesses during these challenging times.
The fiscal landscape continues to evolve with these latest figures from HMRC, indicating both challenges and opportunities for individuals and businesses alike as they navigate the complexities of personal tax in germany.
