HMRC collects £37bn from new taxes introduced during the last decade

HMRC collects £37bn from new taxes introduced during the last decade

HMRC has collected £37bn from brand-new taxes that it has introduced over the last decade, according to UHY Hacker Young.

HMRC collects £37bn from new taxes introduced during the last decade

HMRC has collected £37bn from brand-new taxes that it has introduced over the last decade, according to UHY Hacker Young.

The eight new taxes and levies on business cost £7.6bn in 2018/19, up from £7.4bn the previous year, but UHY Hacker Young warned that the success of these new taxes could lead to more.

Clive Gawthorpe, partner at UHY Hacker Young, said: “Adding new taxes and placing a heavier burden on businesses does not seem to fit in with the Government’s aims to simplify tax.

“These new taxes have already brought in billions of pounds in a relatively short space of time. If we want tax simplification shouldn’t we be reducing the number of taxes?

“Each new tax adds more and more of a burden on businesses. Given the economic uncertainty perhaps the Government should be holding off on plans for new taxes.”

The soft drinks levy, the latest tax to be introduced, cost over £300m since its introduction in April 2018.

A number of new taxes are being introduced or suggested by the Government that would increase the tax burden of UK businesses.

For example, the Government is facing mounting pressure to introduce a ‘sin tax’ on vaping products, while the World Health Organisation is also pushing for a ‘trans-fat’ tax that would result in a levy on businesses that produce foods high in harmful fats.

Some analysts have also suggested that new taxes would also need to be introduced in order to meet the Government’s pledge to reach net zero emissions by 2050.

Johnson Against ‘Sin Taxes’

However, Conservative leadership contender Boris Johnson, who is favourite to win the race to become the UK’s next Prime Minister, announced on July 3 that he would review ‘sin taxes’, claiming they negatively affect the poorest members of society.

“The recent proposal for a tax on milkshakes seems to me to clobber those who can least afford it,” Johnson said.

“Rather than just taxing people more, we should look at how effective the so-called ‘sin taxes’ really are, and if they actually change behaviour.”

This contradicts health secretary Matt Hancock’s impending green paper which is expected to extend the sugar tax to milkshakes following its success.
A Cancer Research report released the same day as Johnson’s announcement also found that obesity is now more likely to cause four forms of common cancers than smoking, causing others to urge further taxes on such products to stem the epidemic.

The three highest-yielding taxes that have been introduced by HMRC over the last 10 years are:

• The Apprenticeship Levy – a tax on businesses to ensure that they are funding new and existing apprenticeship schemes, generating £5.5bn since being introduced in 2017.
• The Bank Surcharge – an additional 8% tax on UK banks’ profits, generating £5.3bn since being introduced in 2016.
• The Bank Levy – a tax on UK banks requiring them to pay over and above normal corporation tax, generating £20.4bn since being introduced in 2011.

Bank Levy ranks as the highest yielding brand-new tax introduced by HMRC over the last ten years, generating £20.4bn

Rank Taxes introduced in the last ten years Total value of tax yielded since being introduced
1 Bank Levy £20.4bn
2 Apprenticeship Levy £5.4bn
3 Bank Surcharge £5.2bn
4 Bank Payroll Tax £3.4bn
5 Swiss Capital Tax £957m
6 Annual Tax on Enveloped Dwellings £954m
7 Diverted Profits Tax £369m
8 Soft Drinks Industry Levy £318m

Resources & Whitepapers

How to optimise your compliance lifecycle

How to optimise your compliance lifecycle

9m
The new rules of accounting

The new rules of accounting

10m
5 ways internal productivity can boost your profitability

5 ways internal productivity can boost your profitability

10m
Crushing the Four Barriers to Growth

Crushing the Four Barriers to Growth

10m