Analysis of HMRC’s tax receipts for 2018-19 tax year show a total increase in takings of £29bn, for that year alone.
HMRC’s revenue from personal taxes was £622.8bn. The highest figure on record. And that’s without significant tax increases and raising the Personal Allowance amount.
How much revenue was generated by each tax?
The tax taking is divided into the individual tax totals:
- Income tax: £190.5bn
- National Insurance Contributions: £137.2bn
- VAT: £131.7bn
- Capital Gains Tax: £9.2bn
- Insurance Premium Tax: £6.2bn
- Soft Drinks Tax: £240m
Compared to the 2014-15 tax year HMRC raked in £27bn more, just in income tax in 2018-19. And bear in mind, this is with Personal Allowance increases. The Insurance Premium tax figure is more than double the takings from 2014-15.
The Treasury received £1.5bn in one year in Capital Gains Tax. This can be put down to landlords selling off their properties, as financially detrimental tax changes started to come into effect. For example, no longer getting mortgage interest tax relief.
Did any of our taxes have a fall in revenue?
Yes, only one. Stamp Duty Land Tax fell in 2018-19. This is because of the change in the rules for first time buyers.
What about Inheritance Tax?
In 2018-19, Inheritance Tax revenue increased by 3.1% on the previous year. This takes them to their highest level under two different measures, as a proportion of GDP and in total annual revenue. Inexplicably, March 2019 saw a jump of 44.4% on February’s figures.
The 2019-20 tax year sees us with an increased threshold for the nil rate band to £150,000. This means that the first £150,000 of your inherited estate is tax free. The government intends this to improve the position of the bequeathed.
But, as reported in The Independent, Quilter’s Rachael Griffin points out the flaws in the system: “However, our research shows that despite the residence nil rate band being in effect since 2017, just 41 per cent of people are aware of this complicated part of the inheritance tax landscape. Government claims that it has given the public all the tools it needs to navigate this tax system, but it’s as complex as assembling flat pack furniture with instructions written in a foreign language.”
“In the modern world families are increasingly becoming more complex and we need a tax regime which functions with this in mind. These kinds of rules should be rethought so people have the freedom to gift to whoever they want and are not constrained by antiquated societal rules. A simple IHT regime gives people far greater opportunity to best plan their estates and make the most difference to future generations.”
Did you know there was a £325,000 nil rate band before? Or that there’s a £3,000 gifting limit?
As with all tax issues, just because the information is available doesn’t mean that everyone can understand how it applies to them. For HMRC as the experts, it’s probably really easy for them to forget this. That’s why consulting a trusted tax expert is the smartest way to ensure you’re totally tax efficient. Particularly if HMRC’s guides and webinars stop making sense. It’s a bit like watching a How to wire a plug video and then deciding you’re ready to tackle a whole house rewiring. You’re probably missing a few bits of quite crucial information. Don’t get a shock from your tax affairs. Get some professional help to check your numbers.
