HMRC’s 2024 Tax Take Soars—But Fiscal Drag Is the Real Culprit
Tom Goddard, Senior Associate at Blick Rothenberg, breaks down the numbers and the hidden forces behind them.
Key figures at a glance
- HMO receipts for the year to September 2024: £840.1 bn (up 3.15% from £814.5 bn last year)
- Income tax bump: £22.6 bn more, an 8.6% jump
- Capital Gains Tax (CGT) receipts: £14.6 bn
- Inheritance Tax (IHT) receipts: £7.9 bn
- National Insurance (NIC) receipts: £174.8 bn (down £2.8 bn)
Why income tax is climbing the hill
Tom explains, “The wind blowing the tax rate balloon higher is fiscal drag—wage gains plus frozen personal allowances push more people into the steep higher rates.”
Until the government shifts those tax bands and allowances, the drag will keep drumming up the income tax pile. Rachel Reeves, the finance wizard, is busy keeping her future plans in hand—most notably the £40 bn chase to plug the so‑called “black hole.”
CGT and IHT: a side‑story that’s not that dramatic
Even with a buzz about raising CGT or IHT, the numbers speak for themselves:
- CGT: £14.6 bn (tiny slice of the total receipt pie)
- IHT: £7.9 bn (only 4 % of taxpayers hit it)
“These taxes barely impact most people,” Tom notes. “Boosting them won’t add a huge splash to the Treasury.”
National Insurance: a tempting dipstick
NIC receipts slipped slightly: £174.8 bn after a £2.8 bn drop.
Reversing the 2 % cut on employer NIC rates could net the Treasury an extra £10 bn, according to the government’s own math. Yet breaking the pledge not to up NIC rates risks a PR nightmare for Labour. The next big question: will Rachel zero in on employer NICs to save the party’s image?
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