Tax receipts – a moment of quiet confidence for the Chancellor?

This morning HMRC published its latest data on tax receipts and National Insurance contributions for the UK. Here’s a quick summary.

Total HMRC receipts for April - December 2021 were £507.7 billion. That’s an increase of £114.1 billion on the same period in 2020. Comparisons against receipts in the same period last year are not representative as they were heavily impacted by the effects of the pandemic.

Receipts from personal taxes – income tax, capital gains tax, National Insurance contributions and the apprenticeship levy – are higher than at any time in the last four years.

VAT receipts have recovered, mainly because significant payments of VAT were previously deferred as part of the VAT payment deferral scheme.

Corporate taxes – corporation tax, bank levy, bank surcharge, petroleum revenue tax and diverted profits tax – paid in December 2021 were higher than at any time in the previous four years. This mainly reflects the recovery of the economy and company profits following the pandemic.

Stamp taxes and the annual tax on enveloped dwellings also peaked in December 2021. With the stamp duty holiday no longer having an influence on these figures, the surge in receipts reflects the strength of the property market and the number of people wanting to complete the purchase of new homes before Christmas.

Fuel duty receipts are beginning to recover but remain below pre-pandemic levels. It remains to be seen whether the impending removal of most coronavirus restrictions will cause a rapid increase in fuel duty receipts, or whether hybrid working and the transition to electric vehicles will result in a long-term reduction.

Alcohol duty receipts for April - November 2021 are consistently higher than the pre-pandemic years. The Christmas peak is almost unchanged.

The Chancellor will be quietly pleased with these figures. His focus will now turn to the impending self-assessment tax receipts which traditionally make January the biggest tax payment month of the year.