HMRC Confirms Record Income Tax and IHT Receipts for 2024 to 25

HMRC has today released figures for inheritance taxes collected for the year 2024/25.  HMRC confirmed £8.2bn was paid by estates in Inheriitance Tax (IHT), this was an increase of nearly £1bn at £800m, a rise of nearly 11%.

Income Tax, Capital Gains Tax and NICs receipts for April 2024 to March 2025 were £486.9 billion, which is £17.6 billion higher than the same period last year.  Made up from:

• Employee (PAYE) Income Tax and NICs receipts for April 2024 to March 2025 were £423.0 billion, which is £15.0 billion higher than the same period last year.
• Self Assessment Income Tax, Capital Gains Tax and NICs receipts for April 2024 to March 2025 were £63.2 billion, which is £3.5 billion higher than in the same period a year earlier.
• That said, capital gains tax receipts of £13bn, were down £1.bn on last year.  That said, in March 2025 alone, CGT receipts were £0.4bn, so the trend is downward as people become wiser in the timing of disposal of assets with chargeable gains.

The problem for taxpayers is that allowances are frozen until 2027/28 and for some until 2030.  This will mean ever increasing tax revenue.

Inheritance tax receipts will climb even higher with the now combined and reduced Business and Agricultural Property Relief allowance reduced to just £1m.

Inheritance tax receipts will also climb again in 2027 when unused pension funds become part of the estate on death for inheritance tax.

Income tax and national insurance receipts will rocket with frozen allowances and increased employers’ national insurance contributions to 15% with a starting at yearly earnings of just £5,000 pa (down from £9,100 pa).

Comment

This all may look a ‘drop in the ocean’ when you think the Office for Budget Responsibility (OBR) estimates government debt interest payable in 2024/25 will be £104.9 billion, around 8.2% of total government spending alone.

We suggest the Autumn 2025 Budget will be another painful one given government spending must increase to fund more NHS, infrastructure and defence spending.