HMRC tax collection - Offshore tax receipts climb 291% year on year

Some valuable research has been carried out by RIFT Tax Refunds which revealed that while income tax, national insurance contributions and VAT are HMRC’s biggest sources of tax income, it’s air passenger duty bank surcharges and stamp duty that have experienced the most significant increase in the level of HMRC receipts on an annual basis – as well as offshore tax receipts.

Chief executive officer of RIFT Tax Refunds, Bradley Post, commented: “Income tax, national insurance and VAT are the big three areas of taxation and are always going to account for the largest proportion of tax receipts received by HMRC, however, it’s fascinating to see how this level of receipts changes from year to year based on wider influences impacting the economy at any one time."

"For example, a surge in air passenger receipts certainly highlights the hunger for air travel following a prolonged period of pandemic restrictions, whilst an increase in stamp duty paid is no doubt down to the property market frenzy spurred by the stamp duty holiday,” Post concluded.

Data was analysed by RIFT Tax Refunds which looked at HMRC receipts over the last two years to see just where your tax goes and which area of taxation HMRC sees the largest levels of receipts from.

Taxing

The figures show that when it comes to the largest proportion of tax receipts, income tax accounts for almost a third (30.8%), with national insurance contributions (22.1%), VAT (21.9%), and corporation tax (9%) also amongst the greatest sources of tax income.

Between the 2020/21 and 2021/22 financial years, overall, HMRC saw a 25% increase in total tax receipts received.

Yet, the volume of income tax receipts collected by HMRC has risen by just 13.9%, making it only the 15^th most significant increase of all tax receipts received. Ultimately, this growth in income tax has also been driven by an 18.7% increase in self-assessment income tax versus a 12.8% increase in PAYE income tax.

The largest increase in tax receipts received by HMRC has been revealed to be passenger duty which led the way over the last year. The volume of air passenger duty tax receipts received by HMRC climbed by 73.5% in the 2021/22 financial year, no doubt as a result of the world reopening for travel following pandemic restrictions.

A steady climb

Surcharges paid by the banks on their profits also saw a notable increase, up 65.6% annually, with Stamp Duty Land Tax receipts climbing by 62.6% as the nation continued to make the most of the stamp duty holiday implemented during the pandemic.

Offshore tax receipts, however, which are also included within corporation tax, witnessed a 290.6% increase year-on-year.

Additionally, custom duties, diverted profit tax, VAT, capital gains tax, penalties, corporation tax, and hydrocarbon oil also rank within the top 10 largest annual increases in tax receipts received by the HMRC.