Navigating Inheritance Tax: Record £2.6 Billion Collections and Expert Insights
Navigating Inheritance Tax: Record £2.6 Billion Collections and Expert Insights
Inheritance tax (IHT) collections have been making headlines, with HMRC reporting an impressive £2.6 billion in receipts between April and July 2023.
Notably, June 2023 recorded the highest monthly IHT receipts ever. This is just one piece of a larger financial puzzle that reveals the United Kingdom's changing fiscal landscape. In this post, we'll explore the key takeaways from this report, shedding light on what's happening and why it matters.
Important Points
Overall Tax Receipts Are Surging: The UK's tax revenues have significantly boosted. Total tax receipts from April 2023 to July 2023 reached £270.2 billion. This represents a substantial increase of £17.3 billion compared to the previous year.
Income Tax, CGT, and NICs on the Rise: Income tax, capital gains tax (CGT), and National Insurance Contributions (NICs) collectively contributed £46.8 billion in July, a marked increase from the £31.5 billion recorded in June. From April to July 2023, these taxes added up to £152.1 billion, marking a £10.1 billion increase compared to the previous year. Income tax alone saw a remarkable increase, climbing to £30.2 billion.
Record IHT Collections: Inheritance tax receipts hit £2.6 billion for April to July 2023, reflecting a £0.2 billion increase compared to the previous year. June 2023 marked a historic high in monthly IHT collections. This surge is likely tied to the recent rise in interest rates charged on overdue tax bills, which align with the Bank of England's base rate currently at 5.25%.
Broad Tax Landscape: The overall tax landscape exhibits fluctuations. Business taxes saw a £3.7 billion increase, up to £25.5 billion. On the other hand, stamp taxes decreased by £2 billion, amounting to £5 billion. VAT receipts and air passenger duty (APD) also showed significant figures, with VAT reaching £60 billion and APD totalling £1.2 billion for April to July 2023.
Conclusion
The UK's financial landscape is evolving, with tax collections on the rise across various categories. While IHT collections have been making headlines, it's essential to consider the broader context of increased income tax, CGT, and NICs revenues. As discussions regarding the potential reform or abolition of IHT continue, individuals and families are urged to engage in proactive tax planning to make the most of available reliefs and ensure their loved ones receive as much of their wealth as possible.
Additionally, it's crucial to stay informed about the shifting tax rates and deadlines, as late payment interest rates have increased, making timely and accurate tax payments more critical than ever. If you have more questions, feel free to contact our team.
