The total tax revenue collected by HMRC for the fiscal year 2025/26 saw an increase of 9.3% in comparison to the previous year. This rise is not unexpected, considering the increase in capital gains tax (CGT) rates and the employer national insurance contributions (NICs).
Receipts for CGT
The CGT receipts for 2025/26 were remarkably 62% higher than those for 2024/25:
CGT is often referred to as an ‘optional tax’ since it can be avoided by delaying asset disposals. Additionally, there is no CGT liability upon death, and future administrations may opt to lower CGT rates.
Nevertheless, individuals who sold assets encountered an increase in rates from 10% and 20% to 18% and 24%. Numerous landlords likely sold their properties in anticipation of the Renters’ Rights Act 2025 taking effect, while business owners could have realized a tax rate reduction of 4% by selling before 6 April 2026.
During one’s lifetime, there are limited options to evade CGT on buy-to-let properties; however, those with a significant investment portfolio may wish to defer disposals until later in life, particularly if they plan to retire abroad. With strategic planning—professional guidance being crucial in this regard—CGT can be alleviated; the tax savings could enable a more comfortable standard of living during retirement.
Employer NICs
The revenue from Class 1 employer NICs has surged to nearly £144 billion, marking an increase of over £35 billion.
Most employers have limited opportunities to circumvent these increases, which took effect from April 2025. However, an unincorporated business might consider bringing on senior staff as partners, likely as limited partners to avoid personal liability in the event of business failure.
It is important to note that there has been speculation about the potential introduction of some form of employer NICs on partnership profits.
Receipts on income tax
Income tax receipts have risen less sharply, although frozen thresholds and allowances are inexorably taking their toll, dragging more and more taxpayers into higher tax bands. Some higher earners may contemplate relocating to a more tax-friendly jurisdiction, which, if the overseas stay is long enough, could avoid CGT on the disposal of investments.
Details of HMRC tax receipts and NICs can be found at HMRC official statistics. Alternatively, contact our team of accountants in Barnsley.