Tax bills jump by £8.9bn year on year

Latest figures from HMRC reveal that the total government tax 'take' jumped £8.9bn year on year in the latest five month period. Total HMRC tax receipts for April to August were £342.2bn, according to figures published today. According to analysis by experts, the Treasury earned £194.4bn from income tax, CGT and NIC alone in the period April to August. Inheritance tax receipts in the period were £3.5bn, £0.3bn higher than the same period last year. Helen Morrissey, head of retirement analysis, Hargreaves Lansdown, said frozen tax allowances - frozen to 2028 - were taking their toll on taxpayers. She said: “When you factor in that National Insurance rates have actually been cut back quite substantially in recent times it makes you wonder about how much bigger the tax take could have been. “It does however, show the impact of frozen tax allowances in steadily increasing the amount people have to pay. Unless the government decides to end the freeze we’ve got several more years of this stealthy tax grab to deal with.” She forecast that in the upcoming Budget CGT rises were possible as Labour had promised not to increase most income taxes. She added: “Inheritance tax also looks likely to be in the government’s sights.” Andrew Tully, technical services director at platform Nucleus, said: “Growth in IHT receipts continues its upward trajectory following record highs in the last few years. The Office of Budget Responsibility predicts the IHT take will be £9.7bn in 2028/29 which means the impact of this tax is set to continue growing strongly.” Alastair Black, head of savings policy at Abrdn, said: "With no reform in sight, families are bracing to fork out over £8 billion in inheritance tax this year alone. With Labour’s Autumn Statement on the horizon, a tax raid could be imminent.” Laura Hayward, tax partner at wealth management firm Evelyn Partners, said: “Rising IHT receipts are a fact of life for the Treasury but even at the current rate of 9.4% on the year they aren’t rising fast enough to help fill the “black hole” that the Government says it has identified in the public finances. “It’s by no means certain that the Chancellor will target the transfer of wealth to raise more tax revenue, but if she does then including defined contribution pension pots in the value of estates for IHT purposes seems to the front-runner in the line-up of possible changes.”

Tax bills jump by £8.9bn year on year

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