HMRC’s tax take sees biggest leap since recession as taxes on rich bite

Publications that covered this story include economia on 26 October.
  • Tax receipts jump £35.6bn in just a year

Our latest research shows HMRC’s tax take has seen its biggest jump since the recession in the last year, rising by £35.6 billion.

HMRC’s receipts increased by 6.7% in the last year, going from £533.7 billion 2015/16 to £569.3 billion in 2016/17, driven by taxes that target wealthy individuals.

Some of the biggest rises in income were seen in taxes targeting the wealthy, including:

  • Capital Gains Tax – up 19% in a year from £7.1bn to £8.4bn
  • National Insurance Contributions – up 10% from £113.7bn to £124.9bn
  • Stamp Duty Land Tax – up 10% from £10.7bn to £11.8bn, driven by an increase in SDLT on homes worth more than £1 million
  • Inheritance Tax – up 3.8% from £4.65bn to £4.82bn

Andrew Snowdon, partner and head of corporate tax at our London office, comments: “The last year has been a bumper one for the taxman, primarily thanks to bringing in more money from wealthier individuals and entrepreneurs.”

“Too high a tax burden on entrepreneurs risks disincentivising them.”

“Income Tax receipts rose strongly, but that was driven more by increased tax take from entrepreneurs and the self-employed than from employees.”

“The many tweaks made to National Insurance Contributions over recent years have resulted in a big jump in income as more people pay higher rates of NICs. Entrepreneurs and other self-employed people that previously opted out of the state pension have been forced to pay NICs under changes introduced last year.”

“Changes made to CGT over recent years have also driven up returns from this tax.”