Latest figures released this morning show that HMRC’s tax receipts have plunged, in some cases being in a net refund position.
Analysis shows that almost every tax has dropped, down £31bn year on year and £47bn when looking at the three months to 31st May, highlighting to mountainous challenge now faced to stabilise the country’s finances.
Robert Pullen, partner at tax and advisory firm Blick Rothenberg, comments: “Of particular note, and yet not unexpected, is the VAT receipts – for the second month in a row HMRC paid out more in VAT refunds than it took, a combination of the lockdown measures closing most shops until recently, and the deferral of making VAT payments until later this year.
“The Chancellor will no doubt be hoping for a significant surge in VAT receipts over the coming months as the lockdown eases and spending resumes.
He adds: “Whilst PAYE and NIC receipts were also lower, this was less impacted, most likely due to the furlough scheme. Whether this changes in the coming months when the relief is rolled back remains to be seen.
“All eyes will now be on what further stimulus measures are announced, and if, as seems inevitable, an emergency budget goes ahead later this year what tax changes are on the horizon.”