The total tax receipts for June were down only 15% on June 2019, compared to around 43% for April and May – a significant improvement and a step in the right direction.
The biggest bounce-back to ‘normal’ was income tax receipts which were only £200m lower than last year’s June figure. This can be seen in an uptick in PAYE and National Insurance contribution (NIC) receipts. This is encouraging and could be a direct reflection of the Chancellor’s focus on job retention.
VAT continues to struggle, but this is a misleading statistic due to the VAT deferral mechanism introduced earlier this year, which applies up to the end of June. Property transactions remain subdued, at less than half the activity seen in June 2019 – the Stamp Duty Land Tax (SDLT) holiday announced recently may see an increase to the property transactions taking place, but the effect on overall SDLT is yet to be understood. If successful, the Government will hope SDLT receipts pick up as the holiday put in place allows property chains to be put together and to close for more valuable properties.
A grim statistic shows that inheritance tax paid in June has increased by over 65% since March and is now in line with June 2017. It remains to be seen if this is a direct result of the Coronavirus pandemic.
Overall, the tax take is still down by 7% on last year but, given what everybody has been through, this is not surprising.