Interactive Investor

Bumper tax haul after Covid lockdown costs

25th January 2022 12:52

Jemma Jackson from interactive investor

interactive investor comments on latest HMRC tax receipts data.

  • Total HM Revenue and Customs receipts for April 2021 to December 2021 are £507.7 billion, which is £114.1 billion higher than in the same period a year earlier.
  • Inheritance Tax (IHT) receipts for April 2021 to December 2021 are £4.6 billion, which is £0.6 billion higher than in the same period a year earlier.

Commenting, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The bumper tax haul will be welcomed by the government, which needs every tax pound it can get to help pay for the mammoth Covid-19 economic support packages, as well as its other spending commitments. But it is a major headache for taxpayers who have to pay them – especially amid the cost of living crisis.

“The uptick in IHT takings feels unsavoury in the context of the pandemic. The reality is the value of property and investments have and will drag an increasing number of estates into paying the charge in the coming years because both the nil rate band and residence nil rate band have been frozen until at least April 2026.

“The date of the next Budget is yet to be confirmed, but whenever it is, a cocktail of spending cuts and tax rises to get the UK economy back on an even keel from the damage done by the coronavirus crisis remains on the cards. The previously announced freeze to personal tax thresholds is a tell-tale sign of the difficult measures to come. The most important thing is to make as much use of current allowances before any changes are made.”

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