You may already be aware that HMRC have published the latest figures on tax receipts from April 2024 to May 2024. The total receipts are £132.8 billion, which has increased by £3.6 billion for the same period last year ( source HMRC tax receipts and National Insurance contributions for the UK (monthly bulletin) - GOV.UK (www.gov.uk) )
The highlights of this are:
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Overall cash receipts were higher mainly from Income Tax, Capital Gains Tax and National Insurance contributions (NICs) (£2.0 billion), business taxes (£1.1 billion) and stamp taxes (£0.5 billion)
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In percentage terms, receipts were higher for stamps taxes (19%), business taxes (17%) and Inheritance Tax (15%)
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Cash receipts were lower for VAT by £0.5 billion (2%) and fuel duties by £0.1 billion (3%)
This mirrors the longer term trends in increasing HMRC tax receipts.
Whilst tax cannot obviously not be completely avoided, the latest short term figures highlight that early and ongoing planning will help to mitigate taxes in a sensible way, which are compounded over a person’s lifetime, for instance when dealing with:
Income Tax planning – as all individuals seem to be suffering from increasing tax rates, especially given frozen tax allowances which are really starting to bite. If we use the personal allowance of £12,570 (which is set to remain frozen until the end of 2027/28) as an example, even individuals only receiving state pensions may already be paying or beginning to pay income tax, which has been made worse by the recent triple lock state pension increases applied.
Capital Gains Pension Planning –exemptions have been halved again for 2024/25 to £3,000 per individual, which has influenced the increase in capital gains tax received by HMRC.
Retirement Planning - for all individuals in accumulation and decumulation, where early tax planning is key to mitigating tax and NIC for individuals, alongside company tax planning to help increase returns.
Inheritance Tax Planning – to maximise the efficiency of passing your assets onto loved ones in a tax efficient manner.
This is not an exhaustive list, but as always, early and consistent tax planning is imperative to maximise the tax efficiency over your working life and beyond. Full consideration should aways be given to your individual situation alongside your overall objectives.
