Since April, £77.2 billion has been raised from income tax and National Insurance (NI), £2.8bn more than the same period last year. In May alone, PAYE income tax reached £20.6bn, nearly £1bn more than in May 2023.
However, NI contributions have dropped by £1.3bn compared to a year ago due to reductions announced by the Chancellor in the Autumn Statement and Spring Budget.
Frozen tax thresholds have resulted in thousands more people paying higher tax rates, raising billions in extra revenue. This approach, which both major parties plan to maintain due to budget constraints, has effectively increased Government income.
Corporation tax revenue also rose significantly, with May 2023 bringing in over £3.04bn, an increase of more than half a billion pounds, reflecting the impact of the new 25% rate. Despite a slow housing market, stamp duty land tax (SDLT) has reached nearly £2bn this year. SDLT brought in over £1bn in May alone, a £150 million increase from May 2023. The SDLT threshold will be halved to £125,000 in March 2025, potentially widening this gap further next year.
Inheritance tax collections have also increased, with £1.4bn collected in the first two months of this financial year, £200m more than the same period in 2023. In May, inheritance tax revenue was £700m, up £100m from May 2023.
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