Rising employment pushes tax take higher but stamp duty continues to surge

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments on HMRC’s monthly tax receipts and National Insurance contributions bulletin, which shows rising employment pushes tax take higher, but stamp duty continues to surge.

Key points from publication:
  • Overall tax take for HMRC between April -November 2021 was £448.1bn – £106.8bn higher than the same period last year.
  • Income tax and national insurance contributions were up 22.9bn to £219.6bn over this period.
  • This is reflective of more employees returning to work and is the seventh month of year-on-year growth.
  • Overall stamp duty receipts for April 2021 to November 2021 are £11.7 billion, which is £4.5 billion higher than in the same period a year earlier.
  • Inheritance tax was £4.1bn. This is up £0.6bn on the same period last year.
Helen Morrissey says:

“The impact of COVID continues to loom large in the UK and the effects can be clearly seen here. Income tax and national insurance contributions continued to climb reflecting the increasing number of people returning to work after being furloughed and made redundant during the pandemic. While this is a positive it will be interesting to see if this continues as the UK and its employers brace for another tough winter dealing with the Omicron variant.

“While not accounting for a huge proportion of the overall tax take, stamp duty continues to surge – up 63% on the same period last year. As the race for space continued and vendors battled to get their deals over the line to take advantage of the stamp duty holiday, we saw unprecedented activity in the housing market which became red hot. 

“Since the stamp duty holiday ended in September, we’ve since seen the market cool a little, though prices remain high and people without a large deposit will find it increasingly difficult to get on the housing ladder any time soon. However, with interest rates on the rise we could see a further cooling which could entice more people to make the leap.”

 

Kindly shared by Hargreaves Lansdown

Main photo courtesy of Pixabay