The tax and borrowing news for Chancellor Rachel Reeves and tax payers generally shown in this month’s HMRC statistics is depressing, say leading audit, tax and business advisory firm, Blick Rothenberg.
Robert Salter, a Director at the firm said: “At the end of the 2024/25 tax year and the start the 2025/26 tax year, the tax and borrowing news is depressing.
Whilst there was little in the way of tax announcements in Ms Reeves’s Spring Statement, HMRC’s tax take continued to rise in March 2025 – as a result of fiscal drag moving more and more taxpayers into tax (or higher rates of tax) – and delivered a year-on-year increase from the 2023/24 tax year.
The total tax take rising by 3.39% a £28bn year-on-year increase, plus there is a £6bn decrease year-on-year linked to the reduction in employee NICs to 8% from April 2024.
Income taxes rose overall by over 9%; whilst there was a slight fall in Self-Assessment Income Tax receipts for March 2025 compared to March 2024, there was a significant yearly increase when one assesses Self-Assessment income tax payments and PAYE receipts together.”
Salter added, “However, despite total tax receipts being up by 3.39% to £857bn, the reality is that Government borrowing for the 2024/25 tax year was almost £152bn and over £14bn more than the Office of Budget Responsibility had originally estimated.”
Robert said: “Sadly, the previous suggestions by commentators that the Government would need to significantly increase taxes (again!) in the Autumn 2025 budget – or cut expenditure – appear to be coming true.
“Whilst many of the economic problems facing the Chancellor are because of global issues, such as the economic uncertainty caused by President Trump’s tariffs, the reality is that the Government’s decision to increase employer’s NICs from April 2025, which are now taking effect, appear to be undermining any attempts to ‘kick start’ the economy.”
He added: “This will probably continue to undermine the Government’s attempts to grow the economy over the coming months, as employers put ‘growth plans’ on hold and reduce employee numbers.”
Leave a Comment