Income tax and National Insurance receipts soar as tax hike looms
The latest HMRC Tax Receipts and National Insurance bulletin shows Income Tax and National Insurance receipts were up £16.2billion on the same period a year earlier – representing an increased number of paid employees.
Furthermore, the data shows July 2021 represented the highest month for Stamp Duty receipts – due to the high number of transactions following the relaxation of the Stamp Duty holiday.
Inheritance Tax receipts for April 2021 to August 2021 were £2.7billion, £0.7billion higher than the same period a year earlier. This is expected to be due to an increased number of wealth transfers during the pandemic.
Analysing the latest statistics, Ms Morrissey said. “Total tax receipts were up £84.7 billion compared to a year before, though this is largely down to defined measures put in place to help individuals and businesses through difficult times.
“Although the rise in Inheritance Tax receipts by £0.7 billion is down to increased wealth transfers which show the enormous personal toll of COVID-19, there is hope for a brighter future when it comes to the UK economy.
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British employers will no doubt struggle to keep staff on as the Government removes the support structure so many have been relying on.
At the same time, increasing the amount of National Insurance that companies have to pay will also make things more difficult for some British businesses holding on by a knife’s edge.
Andrew Snowdon, Partner and Head of Tax at UHY Hacker Young, fears that things are only going to get tougher.
He said: “With the furlough scheme being withdrawn at the end of the month, the increase in National Insurance will have made the cost of keeping jobs that much more expensive.”
Employers and employees will both have to pay an extra 1.25 percent in National Insurance following Boris Johnson’s announcement earlier this month.
Mr Snowdon added: “Unfortunately, this extra burden may have helped make the decision for employers who were in two minds over keeping the jobs of those on furlough. It will be the employees who suffer as a result.”
Meanwhile, dividend and self-employment tax will increase by 1.25 percent.
But figures from the Office of National Statistics (ONS) also hint towards recovery.
Its records show that in the three months up to August vacancies rose to over one million.
This marked a record high for vacancies, with the figure being over a million for the first time since records began in 2001.
ONS data shows that the number of job vacancies in June to August 2021 was 1,034,000.
This is 249,000 above its pre-pandemic January to March 2020 level.
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