UK businesses paying billions more in tax

UK businesses paying billions more in tax
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Peninsula Team, Peninsula Team

(Last updated )

The latest tax figures show a hike in revenues for the Treasury as total revenues hit £580.8bn in the first nine months of the tax year

The total figure was £26bn higher than the same period last year with income tax, National Insurance contributions and capital gains tax receipts at an all-time high of £294.5bn from April to December 2023, exceeding last year’s figure by £13.4bn.

Corporation tax receipts were up significantly, which was no surprise after the rate went up 6% to 25%, from April 2023. Overall, business taxes including corporation tax raised £68.1bn in the first nine months of the tax year, up £9.2bn in 2022.

In December 2022 the total amount of corporation tax collected was £10.8bn, this is now up to £14.5bn, almost an increase of £4bn on the year. Additionally, this has more than doubled since December 2019 when HMRC took £6.1bn. There was also a drop of £900,000 from December 2021 to December 2022.

Self assessment receipts were half a billion pounds less than the previous year, bringing in £16.6bn between April 2023 and December 2023.

VAT receipts shot up to £125bn, £8bn more than in 2022. This rise was consistent with hikes in prices due to inflation running around 10% for months, resulting in generally higher costs despite buying habits staying relatively unchanged.

The decline in property sales and achieved prices has resulted in a significant fall in receipts from stamp duty land tax (SDLT) and wider stamp taxes have taken a hit of £4bn this year, decreasing to £11.7bn. In December 2022 the total taken in SDLT was over £14bn and has not exceeded this amount since.

This was the lowest amount of stamp taxes collected since December 2020.

However, SDLT relief for properties under £250,000 will be halved to £125,000 in March 2025, bringing more property buyers into the tax.

Jonathan Stinton, head of intermediary relationships at Coventry Building Society said: ‘If ever there was a tax which is ripe for change, it’s stamp duty. For too long, temporary measures have been used when only a permanent solution will do.

‘Fewer people moved home last year, yet homebuyers still spent over £10bn in property tax. That’s an enormous spend which is only going to increase until real change happens.’

Inheritance tax (IHT) is set to have a record year and has already raised £400m more than 2022, currently at £5.7bn.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown said: ‘Inheritance tax may only be paid by 4% of estates but this hasn’t stopped our IHT bill surging to an estimated £5.7bn for the year so far. It looks increasingly likely that we will see another record-breaking year with IHT set to top last year’s £7.1bn by tax year end.’

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