Tax takings across all major revenue streams continue to increase, ending the year on a high note for the Chancellor, Rachel Reeves, say leading audit, tax and business advisory firm, Blick Rothenberg.
Tom Goddard, a Senior Associate at the firm, said, “As 2025 draws to a close, the Chancellor may feel a sense of optimism going into the New Year.
“HMRC’s latest statistics show tax receipts are up 6.7% on the last 12 months and have now surpassed the £900bn mark for a 12-month period (with this expected to increase as the January filing deadline for self-assessment tax returns spur the nation into parting with their cash).
“Other significant increases come from National Insurance Contribution (NIC) receipts, up 10.32% (this is before any changes to NIC on salary sacrificed pension payments) and Stamp Duty Land Tax (SDLT) up 20.47% over the last 12 months. For SDLT that is a £2.5bn increase, taking total receipts in the last 12 months to £15.2bn, which is not an insignificant sum in tax takings. It puts into question Kemi Badenoch’s party conference pledge to abolish it and where she might otherwise generate such funds for the country.”
He added, “Despite the healthy tax take, figures released this week show unemployment rising to 5.1% and Government borrowing in the fiscal year to date was up to £132.3bn (an 8% increase on the same 8-month period in 2024). This will give the Government more to think about especially when it comes to public finance expenditure and increased unemployment will hit tax takings on income tax and NIC going forward.
“We also know that increased tax takings are driven less so by economic prosperity, but instead by the concept of fiscal drag. A theme all recent Chancellors have been happy to capitalise on, and in fact Rachel Reeves did so by further expanding the freeze on income tax thresholds to April 2031.”
He added: “While the Chancellor sips her sherry by the fire, the increased tax takings reported by HMRC may be the turkey for her Christmas dinner, but she mustn’t forget the trimmings of controlling borrowing and cutting unemployment when she makes her New Years resolutions!”
‘Twas the week before Christmas, with HMRC stats revealed,
So we checked the spreadsheets,
For the Treasury’s great yield,
A glimmer of light, post Budget we hope,
The tax takings unveil…
A pleasingly upward trending slope!’
