Government tax take soars 12% year-on-year to £50bn in April
Government tax take soars 12% year-on-year to £50bn in April as Boris holds crisis Cabinet on cost of living – but STILL no decisions on windfall tax or help for desperate families
- Boris Johnson is gathering his Cabinet for talks on the grim cost-of-living crisis
- New figures show tax take soaring 12 per cent year-on-year to £50bin in April
- Pressure is mounting on ministers to come up with a fresh support package
Boris Johnson is holding a crisis Cabinet on the cost of living today as new figures showed the government tax take soaring 12 per cent year-on-year.
The Treasury raked in £50.2billion in April – £5.5billion higher than the same month last year after the national insurance hike came in.
The figures will heap pressure on the PM to announce more help for families struggling to get by as inflation spirals. Official figures also revealed this morning that the cost of the £150 council tax rebate trumpeted by Rishi Sunak previously has already been clawed back from other local government spending.
However, there is little sign that a fresh package of support is imminent, with squabbling between ministers over whether to impose a windfall tax on the surging profits of energy firms and Tory calls for immediate tax cuts.
There are claims today that the Chancellor is drawing up a levy that would target renewable electricity generators as well as oil and gas producers to increase the revenue raised.
Meanwhile, the Treasury and Downing Street have struck different stances over the idea of restoring the £20-a-week uplift to Universal Credit. No10 insisted yesterday that nothing is off the table, while Chief Secretary Simon Clarke dismissed the prospect.
The Treasury raked in £50.2billion in taxes in April – £5.5billion higher than the same month last year after the national insurance hike came in
Mr Johnson was flanked by civil service chief Simon Case (left) and Rishi Sunak (right) as he held Cabinet today
Inflation has already soared to its highest level for 40 years, at 9 per cent in April, due to eye-watering increases in energy tariffs, and is forecast to reach double-figures by the end of the year before falling back.
The Office for National Statistics (ONS) said government borrowing, excluding state-owned banks, stood at £18.6billion last month – lower than forecast and down by £5.6billion from a year ago.
The figure was still the fourth highest April borrowing since records began and £7.9billion more than in April 2019 before the pandemic struck.
But the data also showed borrowing was revised down by £7.2billion for the financial year to the end of March 2022, to £144.6billion.
While the 2021-22 outturn is the third highest financial year for borrowing on record and above the £127.8billion predicted by the Office for Budget Responsibility (OBR), it may offer some much-needed wiggle room for the Government as it faces growing calls to help cash-strapped households.
PAYE tax income was up from £15billion in April 2020 to £17.8billion this year, while VAT raised an extra £1.6billion. Compulsory social contributions rose by £1.4billion.
The figures showed that interest payments on the Government’s borrowing stood at £4.4billion last month, which was lower than the £4.9billion seen a year earlier.
However, interest payments are expected to soar, due to rocketing levels of the Retail Prices Index measure of inflation used on Government debt payments, with June data set to show the full scale of the recent jump in inflation.
Mr Sunak said: ‘While we are doing what we can to help families deal with rising prices, inflation is also pushing up our spending on debt interest – which is expected to reach £83billion this year.
‘We must take a balanced and responsible approach to support people now, while also not burdening future generations, and we’re on track to drive public debt down by 2024-25.’
The ONS figures include the £3billion cost of the recent council tax rebate, which offered £150 to many households across the UK to help with soaring energy bills.
But that cost was ‘offset by reductions in other areas of expenditure, including subsidies and transfers to local government’.
The tax take is now higher than before the pandemic
The ONS also estimates that April’s 1.25 per cent National Insurance rise will bring in around £18billion this financial year.
Public sector debt, excluding public sector banks, was £2.35trillion at the end of April, up by £179.1 billion on a year earlier and around 95.7 per cent of gross domestic product (GDP), according to the ONS.
Helen Morrissey of investment firm Hargreaves Lansdown said: ‘We continued to see the benefits of high employment levels with income tax and national insurance receipts continuing to rise reflecting a 4.9 per cent boost in the number of paid employees.
‘This is a hugely positive trend but there are darker clouds gathering on the horizon as we expect to see the impact of the 1.25 percentage point rise in National Insurance start to factor in the data in the coming months.
‘As the cost-of-living crisis continues to bite it will be an extra cost many people can ill afford.’
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