Tax take rises slightly

Statistics published by HMRC show that there has been little change in the amounts raised through tax over the past year, reports Harris & Co Chartered Accountants Northampton.

According to the latest figures, total net corporation tax (CT) receipts rose very slightly in 2011/12 to £42.2bn. While receipts from North Sea oil went up, this increase was largely nullified by a decrease in receipts for those companies in the financial sector.

HMRC says the industrial and commercial sector has the highest level of CT receipts, on average accounting for 61% of the total during this period. Since 2008/09, North Sea companies have overtaken the financial sector to become the second largest contributor. This reflects the rise in oil prices in 2008/09 and the effects of the economic downturn on the financial sector.

Bank Levy receipts for 2011/12, the first year in which payments were due, amounted to £1.6bn.

HMRC’s analysis shows total CT liabilities rose by 16% to £44.4bn billion in 2010/11, the latest year for which figures are available, from £38.2bn in 2009/10. CT liabilities from North Sea oil companies increased by 42% to £7.7bn in 2010/11, as oil prices rose from their previous lows.

Liabilities from the industrial and commercial sector also increased to £28.8bn from £25.1bn, a 15% rise. In the financial and life assurance sectors, liabilities increased by 2% and 12% respectively.

HMRC figures indicate there was little change in net income tax receipts in 2011/12, which at £146.2bn were 1% lower than in 2010-11. Of the total for the year, 14% or £20.3bn, was from self assessment.

Gross receipts (other than self assessment) were £137.7bn. Of this 96%, £132.2bn, was PAYE receipts, and 1%, £1.8bn, was TDSI receipts.

Total repayments and tax credits, other than self assessment, were £11.8bn in 2011/12. Of this, the bulk was repayments (£7.1bn), while £1.6bn came from repayment of personal pension contributions and £1bn from repayments to charities. Income tax credits in 2011-12 were £4.7bn, almost all of this is due to working tax credits and child tax credits.

HMRC says the drop of £1.7bn in net income tax receipts was largely due to lower receipts of self assessment income tax. The introduction of the 50% additional rate of income tax in 2010/11 had a major effect on the behaviour of taxpayers with incomes above the additional rate threshold of £150,000 with large amounts of income forestalling. As a result, self assessment income tax liabilities were inflated in 2009-10 and depressed in 2010/11 as the effects of forestalling started to unwind.