Tax is up a third from last year: stamp duty soars by two thirds
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on government publication of tax figures for April-September 2021, which shows tax is up a third from last year: stamp duty soars by two thirds.
Key points from publication:
- We paid £392 billionin tax between April and October this year – the first half of the current tax year. It’s up £99.8 billion from the same period a year earlier – or 34%.
- In England we paid £10.2 billion in stamp duty, up £4.1 billion in a year. That’s an eye-watering 67%, thanks to the closure of the property market in spring 2020, and the rush to beat the stamp duty holiday deadline.
- Taking just the October figures, October’s stamp duty on property was up 76% from October last year, and up 25% from October 2019. It’s a record month.
- Inheritance tax only made up £3.6 billion of the tax take, although that’s £0.6 billion higher than the same period a year earlier, which is a rise of 20%.
- In October this year, inheritance tax figures were 18% lower than last October, and back below the rate in October 2019, reflecting lower numbers of deaths in the past six months.
Sarah Coles said:
“The enormous jump in stamp duty this tax year demonstrates the impact of the stamp duty holiday. And while the taxman may be rubbing his hands in glee, buyers are more likely to be wringing theirs.
“Tax is up a third in the first half of the tax year and stamp duty has soared by two thirds. And while the figures are distorted enormously by the impact of the pandemic, the dramatic impact of the stamp duty holiday is clear.
“It’s difficult to compare tax years, because the government brought in a set of rules to try to make it easier to manage tax bills, and another set to get us to spend more money and buy more property.
“However, we can see the enormous impact of the stamp duty holiday. It has pushed the average house price to a record high of £270,000 – up £28,000 in a year, and driven transactions higher. This year we had the busiest ever September in the property market, as buyers rushed for the final stamp duty holiday deadline.
“In terms of stimulating the market and generating tax, the move was clearly effective. However, if you’re trying to get onto the property ladder, or move up it, the impact is likely to be far less welcome. As the tax break dies away, buyersnow have nothing to gain from the short-term measure, and in the process it has made the challenge of buying a home even harder.”
More figures from the release:
- Receipts from PAYEincome tax and national insurance were £192.4 billion, up £20.3 billion in a year (12%). This is due to both a 3.6% rise in paid employees (just over 1 million) and a rise in average pay of 5.2% from a year earlier. It reflects how many people were laid off in the first few months of the pandemic.
- Receipts from Self-Assessment Income Tax, CGT and NICsfor April 2021 to September 2021 are £14.8 billion, up £7.7 billion.
- VAT Receipts for April to October 2021 are £92.4 billion – up £51 billion.
Kindly shared by Hargreaves Lansdown
Main photo courtesy of Pixabay
