HM Revenue & Customs (HMRC) recorded a 5.75% overall increase in tax receipts over the 12 months to January, but its data shows that the property market has slowed, with transactions on a steady monthly decline since April 2016, reports Blick Rothenberg accountants.
HMRC Records Increase in Tax Receipts, but Property Market Slows
The Assistant Manager at Blick Rothenberg, Paul Haywood-Schiefer, explains: “Whilst the overall tax receipts have seen an increase, there is a clear reverse in the UK property market, as the number of transactions since April 2016 has been on the decline each month when compared to the same month of the previous year. The position shown by the latest figures is that there has been an overall 0.12% decrease in property transactions since the end of January 2016.
“Whilst the number of properties changing hands has been lower, Stamp Duty Land Tax (SDLT) receipts have increased by 11.65% in the same period, mainly boosted by the 3% surcharge on second or additional properties.”
He continues: “The changes to SDLT, announced in the Autumn Statement of 2015, meant that SDLT would be lower on properties under £937,500, but the additional 3% SDLT surcharge applied to all residential property transactions occurring from April 2016 means that it is not always the case. The 3% surcharge also triggered a rush to buy properties before this deadline, and so the SDLT receipts have been buoyed by that in the early part of 2016.”
The Government’s record £9.4 billion surplus was supported by a 5.75% overall increase in its total receipts over the past 12 months, with larger underlying growth in the individual receipts for Self-Assessment Income Tax (13.09%), Corporation Tax (10.40%), National Insurance contributions (7.89%), and SDLT (11.65%).
Haywood-Schiefer adds: “Although these figures are healthy increases, it is important to not lose sight that the Self-Assessment Income Tax and Corporation Tax receipts reflect, at least partly, the results of the previous tax year because of the timing of the payments related to when the profits were earned. PAYE receipts, which are a more current indicator of how the economy is faring, have seen only a 1.92% increase over the same period.
“Self-Assessment receipts for January alone were £1.2 billion up from the previous year, which represents 38.5% of the total increase in the last 12 months, but this may be due to more people having paid on time this year than in the previous year. Therefore, the statistics released in March and April will give us a better overview of whether there is a real increase.”