Treasury to net £185bn from income tax receipts in 2018/19

The Treasury is set to net £185bn from income tax receipts in 2018/19, compared to £178bn in 2015/16, according the latest HMRC data.

However, despite the hike in the amount of income tax paid, the report revealed that tax rates are expected to fall from 17.2% in 2015/16 to 16.7% in 2018/19. Experts have credited this to the gradual increased in the personal allowance and the widening of the basic-rate tax band.

In 2015/16, the personal allowance was £10,600 whereas it is £11,850 for the 2018/19 period.

AJ Bell senior analyst Tom Selby said: “While the billions of pounds raised from basic, higher and additional-rate taxpayers is edging up each year, the average rate of tax people pay is actually dropping as tax bands widen and the personal allowance continues to edge upwards.

“What we are seeing here is the realisation of the Conservative Party’s primary election strategy – namely to put more money in the vast majority of people’s pockets in the hope this will translate into votes at the ballot box.”

Selby also mentioned that “even the wealthiest in society” that are earning £2m plus are only expected to see a “very marginal” rise in their overall rate of tax, from 38.8% in 2015/16 to 39.6% in 2018/10.

“Nonetheless, these figures lay bare the fact that those with the broadest shoulders continue to bear by far the greatest tax burden in the UK,” Selby added.

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