HMRC collected £27.9 billion less in tax revenues in the 2020/21 tax year than the previous year as a result of the pandemic, according to HMRC annual accounts.
In its 2020/21 annual report, HMRC said it collected £608.8bn in tax, down by 4.4% from £636.7bn collected in 2019/20.
Afford Bond Tax Director commented: “Additional revenues from tackling tax avoidance, tax evasion and other non-compliance methods also fell during the Covid pandemic, down by 18% from £36.9bn in 2019/20 to £30.4bn. As you can imagine, it’s not a position HMRC want to find themselves in.”
The annual report said the “unprecedented economic circumstances caused by COVID-19” had resulted in lower tax collection. Inevitably, the scale of the economic impact caused by COVID-19 had some effect on tax revenue. HMRC commented: “If individuals and businesses are generating less taxable income, there is less revenue to collect.”
HMRC’s debt balance increased during the pandemic from £35bn to £57.5bn, partly due to deferrals of VAT and self-assessment income tax payments.
If you would like expert help or guidance for your tax return, please contact Chris.Regnauld@affordbond.com or use the Contact Us form here on our website www.affordbond.com