Bank and apprenticeship levy raise £37bn since 2010

HMRC has collected an additional £37bn from new taxes introduced over the past decade, according to research from UHY Hacker Young

Charges on the banking sector, untaxed overseas investment activity and unhealthy lifestyle choices are swelling the Treasury’s coffers, the firm found.

Up to year-end 31 May, eight new taxes and levies have been brought in since the coalition government came into office in 2010. The firm calculates these raised £7.6bn in 2018/19, up from £7.4bn the previous year.

The newest tax, the soft drinks levy, has cost industry more than £300m in the year since it was introduced in April 2018.

According to UHY Hacker Young’s analysis, the highest yielding new tax was the bank levy, generating £20.4bn since its introduction in 2011.

Second place goes to the apprenticeship levy, generating £5.5bn since its debut in 2017, while in third place is the bank surcharge, which has pulled in £5.3bn since 2016.

The bank payroll tax has brought in £3.4bn, followed by the Swiss capital tax (957m), annual tax on enveloped dwellings (£954m), diverted profits tax (£369m) and the soft drinks industry levy (£318m).

UHY Hacker Young warns that the significant success of these new taxes could encourage the government to introduce more taxes. There is mounting pressure to introduce a ‘sin tax’ on vaping products, while the World Health Organization is also encouraging the introduction of a ‘trans-fat’ tax that could result in an industry-wide levy on businesses that produce foods high in harmful fats.

Clive Gawthorpe, partner at UHY Hacker Young, said: ‘Adding new taxes and placing a heavier burden on businesses does not seem to fit in with the government’s aims to simplify tax.

‘These new taxes have already brought in billions of pounds in a relatively short space of time. Each new tax adds more and more of a burden on businesses. Given the economic uncertainty perhaps the government should be holding off on plans for new taxes.’

Pat Sweet

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