Tax receipts and national insurance contributions totalled £584.3 billion for the tax year 2020/21, which is £49.1bn lower than in the same period last year, Government figures show.
HMRC have just reported that VAT suffered the most, falling by £28.8bn (22%), attributable to the VAT payment deferment policy and the temporary reduced rate of 5% for hospitality, holiday accommodation and attractions.
Afford Bond Tax Director, Chris Regnauld said: “Corporation tax takes fell by £11.4bn (17%) largely because of the economic havoc the pandemic and lockdowns had on UK businesses overall. Receipts were also lower for stamp duty taxes (19%), hydrocarbon oils (24%) and air passenger duty, which fell by a crushing 84% as allmost all travel was cancelled.”
However, they were higher for IHT – inheritance tax (4%), alcohol duty (2%), and income tax, capital gains and national insurance contributions (1%). Accounting for £352.1bn of receipts for 2020/21, HMRC said that the increased financial yield from income tax and national insurance “is most likely due to a combination of reduced economic activity leading to lower tax liabilities and deferral and non-payment of liabilities during the COVID-19 pandemic”.
Afford Bond Chartered Accountants are here to help if you need expert tax advice or guidance – contact Chris.Regnauld@affordbond.com or call Nantwich Accountants office on T: 01270 623731 or Wilmslow Accountants office on T: 01625 416380.