Tax take hits £513.6bn as corporation tax receipts rise

Total tax receipts for the latest tax year are mirroring the pattern set last year, with improvements in the tax take from national insurance contributions (NICs), income tax and VAT resulting in a 4.4% rise in tax revenue, according to the latest monthly HMRC analysis of tax receipts

Overall, HMRC collected £513.6bn in taxes in 2014-15, up from £492.5bn in 2013-14, with VAT accounting for a fifth of overall revenue.

The March 2015 data shows that total HMRC receipts for the month came in at £37.58bn, up on the £35bn recorded in March 2014. NICs payments came to £9.5bn, compared to just over £9bn the same month of the previous year.

Corporation tax receipts remain lower than pre-crash levels and as a proportion of GDP have steadily declined since the mid-1980s although they still account for 9% of total tax take, down from 11% in 2007-08. They accounted for £42.2bn in 2014-15, up from £39.2bn in the previous year. Reductions in the main rate of corporation tax have also affected receipts.

David Brookes, tax partner at BDO LLP, said: ‘Tax receipts for March show a healthy increase over the same month last year, representing a real boost for the economy and a continued trend over the early months of the calendar year.

‘The substantial rise in corporation tax receipts from the same month last year demonstrates that UK businesses are generating more taxable profits which will be welcome news for the Chancellor ahead of next month’s general election.’   

Total business tax payments include corporation tax, NICs, bank levy and petroleum revenue tax. 

Rain Newton-Smith, CBI director of economics, said: ‘Taxes paid by business make an important contribution to funding government spending - in 2014/15 the £174.1bn of business tax receipts exceeded the combined NHS and education budgets.'

‘Public borrowing decreased by £11.1bn in the last financial year and the government borrowed £2.9bn less than the Office for Budget Responsibility (OBR) forecast,’ he added.

For 2014-15, growth in the home, industrial and commercial sector and the financial sector outweighed lower oil and gas receipts. Oil and gas revenues in 2014-15 were around a fifth of their level in 2008-09.

VAT receipts for March were £7bn, compared to £6.1bn in March 2014, but have declined from the £12.1bn recorded at the start of the year, which reflected the large number of quarterly payments made in January. In its commentary on the statistics, HMRC says VAT receipts for 2014/15 are now at a peak of £111.2bn up from £80.5bn in 2007-08. The increased VAT rate of 20% has seen a substantial increase in VAT revenues

Capital gains tax contributed more this March, up from £149m to £286m. Concerns about changes to the housing market and property taxation post-election did not feed through to a reduction in Stamp Duty Land Tax (SDLT) revenue, which totalled £723m for March 2015 compared to £743m for March 2014. Annual receipts reached a record £10.7bn, double the figure for the post-crash period.

HMRC says SDLT receipts for the period April to March 2015 were 10.4% higher than in the same period last year and include £114m in receipts from the Annual Tax on Enveloped Dwellings (ATED). Receipts from land and property are 15.8% higher than last year due to higher prices and volumes over the year for both residential and non-residential properties.

HMRC tax and NIC receipts monthly and annual historical record is available here

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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