Interactive Investor

Tax receipts data reveals scale of tax grab

Income tax receipts soar more than wages (13.2%), IHT rises 10% from last year and students pay 94% more interest on student loans.

22nd August 2023 10:52

by Alice Guy from interactive investor

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Mechanical claw representing a tax grab 600

Government data on tax receipts during April to July 2023 reveal that some key taxes have risen more than inflation in the last year.

Additional government data on tax receipts this year also reveals rising tax revenues compared with the same period in 2022.

Tax receipts compared with last year

Apr-Jul 2023

Apr - Jul 2022


% difference

Income tax










Corporation tax





Interest on student loans





Source: Public sector current receipts

Alice Guy, Head of Pensions and Savings, interactive investor says: “The tax receipts figures reveal the astonishing efficiency of fiscal drag to raise more tax revenue for the government. Several key taxes have risen by more than inflation during the last three months, with income tax generating £9.9 billion more than the same period during 2022, a rise of 13.2%.

“The fact that income tax has risen more than wages, shows the impact of frozen tax thresholds, forcing us to pay tax on more of our income during the past three months. If we feel poorer, it’s partly due to the cost-of-living crisis, but it’s also due to a bigger tax bill as frozen thresholds mean that more and more of our income goes on tax over time.

“Rising interest rates have pushed up the cost of student loans in the last year, with interest on student loans raising an eye-watering 94% more than in the same period in 2022.

“Paying more into your pension is a great way to minimise your tax bill if you can afford it. It only costs £80 for basic-rate taxpayers to contribute £100 to their pension. And it’s an even better deal for higher-rate taxpayers, who can contribute £100 to their pension for an after-tax cost of only £60.”

Commenting on IHT, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The IHT tax bill has surged higher yet again - but there really should be no element of surprise. 

“IHT continues to be an effective cash cow for the government, generating £2.6 billion between April and July 2023 alone - £200 million higher than in the same period a year earlier. The deep freeze of the nil rate and residence nil rate bands until at least April 2028, means an increasing number of estates will be caught in the IHT net over time. While a forecasted dip in property prices could limit growth in the government’s IHT takings, the Office for Budget Responsibility expects IHT to raise £7.2 billion in the 2023-24 tax year rising to a massive £8.4 billion by 2027-28.

“IHT continues to shift away from being a tax on the wealthy, as originally intended, to one paid by more modest estates thanks to growth in house prices (over the long term) and solid investment returns over the long term. While no one likes to think about their own mortality, it is important to have your finances in order before you shuffle off the mortal coil to ensure that the taxman doesn’t take more than his fair share.

“You can reduce IHT liability by making use of gifting allowances, trusts and pensions (which are normally free from IHT). It is worth consulting a qualified adviser to work out the value of your estate and how much tax you might be likely to owe.”

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