HMRC tax take down 42% in April
26 May 2020
Tax receipts suffered a sharp drop in April, as the consequences of the Covid-19 pandemic and lockdown took effect.
Figures released by HM Revenue & Customs showed the amount of tax taken by the government fell by 42% in April compared to a year ago, as unemployment rose, staff were furloughed and businesses used coronavirus schemes to defer tax.
Total HMRC receipts for the month reached £35.1 billion, down £25.9 billion on April 2019.
The biggest fall was in VAT, with the total tax dropping 107% year-on-year as companies deferred their payments to boost cashflow. Meanwhile, income tax receipts fell by 21%, while National Insurance payments decreased by 18%.
Closures across pubs and restaurants also hit the public purse, with beer duties down 69% in April, while a lack of travel caused a 90% drop across air passenger duty payments.
Laura Suter, personal finance analyst, AJ Bell, said: “The first sign of the lockdown crunch on the government’s tax take can be seen in how much tax the nation paid in April, which has fallen off a cliff compared to last year.
“The government faces a huge challenge ahead to deal with these falling tax receipts while also having to pay for its numerous support schemes during the current crisis. So far around £5.2 billion has been spent on the Coronavirus job retention scheme and it’s inevitable the public will see tax rises to help meet the shortfall.”
Professional Paraplanner is delighted to announce the winners of the Paraplanner Awards 2020. This year our Paraplanner Awards not...
Outsourced paraplanning firm PLUS Group is expanding the services it offers advice firms with the addition of a cashflow...
Jessica List, Pension Technical manager, Curtis Banks, considers the often complex rules and conditions applying to the pension commencement...