Tax‑Revenue Rises: A Silver Lining for the UK Budget
When you think of the UK government’s finances, what pops into mind? Budget drafts, policy debates, and a dash of fiscal anxiety. This month, HMRC’s numbers paint a sunnier picture, and the leading tax advisory firm Blick Rothenberg is quick to point out the good news.
Annual Gains in Total Tax Receipts
- £842 billion in the last 12 months—barely a whisker below the £850 billion target.
- Growth of £24 billion compared to the preceding year, despite a £0.9 billion dip in August 2023.
- December’s history of bumper revenue suggests the mark could be hit short‑notice in the next month.
Income Tax: The Golden Goose
Labour’s pledge to raise the national living wage has set the stage for a continuing surge in income‑tax receipts. According to Tom Goddard:
- Current year-on-year increase: ≈ 8 %—comfortably above the 2.3 % consumer‑price inflation.
- Higher payrolls for the lowest earners are driving this uptick.
- The policy that keeps personal allowances and tax thresholds frozen through 2028/29 is quietly nudging more people into higher bands.
- Changes to employers’ National Insurance contributions won’t see an effect until after April 2025.
Inheritance Tax: Small Yet Steady
In the past 12 months, IHT collected just shy of £8 billion, which translates to a modest 0.9 % of the total HMRC take.
- Projected changes to Agricultural and Business Property Relief (APR & BPR) will only surface in April 2026.
- IHT payments are tied to the date of death, with the tax due no later than the sixth month after death.
- These adjustments are unlikely to influence figures until the November 2026 release.
Bottom Line
With tax revenue inching toward target thresholds, the government’s fiscal outlook looks a lot brighter than the grim expectations that swirled around the last budget. The steady climbs in income and, eventually, business contributions give an economic lifeline that’s both comforting and compelling for policymakers.
