In the past three months the Government has borrowed more than double its entire borrowing for last year, with June marking the third highest month on record for borrowing. The cost of supporting the economy and businesses through the Covid-19 crisis in June came in at £35.5bn, five times the level seen last June.
However, at least the amount of money the Government is taking in in tax is edging higher as lockdown eases and more businesses return to work and wean themselves off Government support schemes. The total amount the Government took in tax in June rose by around 40% compared to May as people returned to work and income tax and national insurance payments increased.
While the total tax take by the Government is still 14% lower than the same month last year that’s a dramatic improvement on April’s figures – when we were in the full grip of lockdown – which were more than 40% lower than the same month a year earlier. The picture over the past three months of lockdown is less rosy, with Government tax receipts a third lower than they were in the same three months last year – representing a £51bn hole in the Government’s accounts.
In particular, stamp duty payments rose by almost 60% in June compared to last month as the housing market got moving again and some pent-up demand from lockdown was seen. That said, the tax take is still a third below where it was in June last year, so claims of a rampant rebound in the property market are wide of the mark. These figures will also now fall, after the Government’s announcement of a stamp duty break for many homebuyers, leaving a further cost for the Government to meet.
The nation’s return to the pub has helped to boost the public coffers, with the amount taken in beer duties rising 320% compared to May and is almost 40% higher than in June last year. The re-opening of the travel industry has also given a slight lift to the tax figures, with tax receipts rising from £7m in May to £60m in June. But this is still more than 80% lower than the same month last year as our summer holiday season struggles to get going.
|Tax type||Jun-19||Jun-20||Percentage change|
|Total HMRC receipts||41,730||35,753||(14%)|
|Total Income Tax||13,036||12,837||(2%)|
|Of which: PAYE Income Tax||13,106||13,379||2%|
|Of which: SA Income Tax||160||107||(33%)|
|Capital Gains Tax||5||21||353%|
|Total Corporation Tax||2,808||4,744||69%|
|Stamp Duty Land Tax||831||573||(31%)|
|Annual Tax on Enveloped Dwellings||3||5||51%|
|Betting & Gaming||88||150||72%|
|Air Passenger Duty||331||60||(82%)|
|Insurance Premium Tax||20||135||567%|
|Climate Change Levy||28||41||43%|
|Soft Drinks Industry Levy||0||45||35081%|
|Child and Working Tax Credits||1,523||1,355||(11%)|
|Child Benefit Payments||958||944||(1%)|
|Tax-Free Child Care||15||11||(24%)|
|Coronavirus Job Retention Scheme||NA||9,037||NA|
|Self-Employment Income Support Scheme||NA||570||NA|
These articles are for information purposes only and are not a personal recommendation or advice.
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