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Will HMRC manage to collect more income tax this year?

By December 12, 2014November 28th, 2017No Comments

According to HMRC, they expect to raise an additional £10bn in income tax in 2010/11 and nearly all of that will come from 40% and 50% taxpayers.


HMRC expect this to reverse the drop caused by the recession over the last two years.


Kevin Kinsella Jnr of KinsellaTax predicts that whoever comes to power, VAT will be increased to 20% and standard rate tax will increase to 25%.


So yes, there will be an overall tax increase but not as much as HMRC expects.


HMRC predicts that this financial year the total number of income tax payers will rise by 400,000 to 30.6 million.


There will also be an increase of 100,000 in the number of basic rate taxpayers to 26.4 million. This will generate an extra £1.2 billion to the Treasury, giving a total of £68.1 billion in tax.


The number of people in the 40% higher tax band and the new 50% tax band will increase to 3.412 billion.


40% income tax is due on income over £37,400 and 50% is due on income earned over £150,000.


With both the personal allowance and the 40% tax threshold being frozen this year it comes as no surprise that more people have drifted up into the basic rate and higher tax rate brackets this year.


Kevin Kinsella Jnr thinks HMRC are being optimistic and not allowing for an increase in unemployment figures which he believes will rise substantially.