Stamp duty payments add record £12bn to government coffers
Stamp duty receipts total £12.1bn so far this year, a record amount added to the government’s tax intake on property sales.
Apart from January when the intake was £944m, tax generated by property transactions have totalled more than £1bn in each of the months leading up to September.
This is up £3.2bn compared to the same period last year, but factors in the effect of the stamp duty holiday which lasted until September 2021.
According to the HMRC tax receipts and National Insurance contributions for the UK monthly report, it noted the more recent cut to stamp duty announced in the government’s mini Budget last month would be reflected in receipts from October.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said the figures were “hugely impressive” but “they may tail off in the coming months as people decide to put off moving home”.
Morrissey said: “This is particularly the case since last month when the so-called mini Budget brought chaos to the markets pushing up mortgage rates and, in some cases, putting that dream property out of people’s reach.”
Inheritance tax boosted by higher house prices
Between April and September this year, intake from inheritance tax (IHT) stood at £3.5bn, a £400m rise on the same period last year.
So far this year, £4.97bn has been paid towards the tax.
Shaun Moore, tax and financial planning spokesperson at Quilter, said IHT was “steadily becoming rather lucrative for the Treasury” as higher house prices and the nil rate bands widened eligibility for the levy.
He said: “IHT was once viewed as a tax on wealthier individuals, but the reality is that more people are now getting caught in the IHT net – partly as a result of soaring property prices.
“The nil rate band and the residence nil rate band will remain frozen until 2026, meaning more and more people, including many families that might not consider themselves to be wealthy, could now face a hefty IHT bill due to the amount their properties have increased in value.”
Income tax and National Insurance intake rises
The report also revealed that receipts from PAYE Income Tax and NICs in the six months to September 2022 are at £190.4bn. This is £24.6bn higher than in the same period a year earlier. September receipts largely relate to August liabilities.
Moore added: “This will no doubt be good news for the current Chancellor who recently kickstarted a renewed tilt to austerity as he looks to shore up government spending plans ahead of the OBR forecast on 31 October.
“This increase likely reflects the uptick seen in average earnings over the past few months, though is somewhat surprising given the National Insurance threshold was increased to match the Income Tax threshold earlier this year which meant approximately 30 million people would pay less NI.
“In the coming months, should the reversal of the 1.25% National Insurance hike remain in place once a new Prime Minister is elected, we could well see a dip in the Treasury’s takings.”
Overall, the government raked in £368.9bn in taxes and duties in the six month period, £35bn higher than in the same period a year earlier.