{"id":24765,"date":"2023-05-09T14:17:32","date_gmt":"2023-05-09T14:17:32","guid":{"rendered":"https:\/\/smh.group\/?p=24765"},"modified":"2024-03-05T16:24:25","modified_gmt":"2024-03-05T16:24:25","slug":"governments-tax-take-on-growth-trajectory","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/governments-tax-take-on-growth-trajectory\/","title":{"rendered":"Government\u2019s tax take on growth trajectory"},"content":{"rendered":"<p><strong>Analysis of the projected outcomes of the government\u2019s tax policies show an expected increase to the number of higher rate personal taxpayers, with the corporate tax yield expected to grow substantially.<\/strong><\/p>\n<h2><strong>Income tax<\/strong><\/h2>\n<p>The default policy for income tax has generally been to increase thresholds in line with inflation. This is currently not happening, in particular for the personal allowance and the basic rate band, which are frozen at 2021\/22 levels until 2027\/28. The latest costing of these two threshold measures will mean:<\/p>\n<ul>\n<li>Additional tax receipts of \u00a313.1 billion for 2023\/24, with over \u00a320 billion in additional receipts for each of the four following years.<\/li>\n<li>Some 2.2 million taxpayers having to pay tax for 2023\/24 who would not otherwise have had to do so, with an extra 1.3 million having to pay higher rate tax.<\/li>\n<\/ul>\n<p>The exception to the frozen rule is the additional rate threshold, which was cut from 2023\/24, pushing more taxpayers into that higher bracket. Not surprisingly, income tax now accounts for 28% of the government\u2019s tax take, up 2% from a few years ago.<\/p>\n<h2><strong>VAT registration<\/strong><\/h2>\n<p>The VAT registration threshold has stayed at \u00a385,000 since April 2017, so it should come as no surprise that there are now around 300,000 registrations annually, although a disproportionate number of traders are avoiding registration by keeping turnover just below \u00a385,000.<\/p>\n<h2><strong>Corporation tax<\/strong><\/h2>\n<p>The government\u2019s yield from corporation tax was just over 8% in 2021\/22, but the new main rate of 25% means this is expected to increase to about 10%. In actual figures, this is an increase from \u00a368 billion to \u00a3112 billion.<\/p>\n<p>Although there are around 1.5 million SMEs, they only contribute 45% of the total collected corporation tax. The other 55% comes from 18,000 large companies.<\/p>\n<p>By 2027\/28, the tax burden is forecast to reach a post-war high of 37.7% of GDP, with the highest ratio of corporation tax receipts to GDP since this tax was introduced nearly 60 years ago. Keeping on top of tax planning and how businesses and individuals can minimise their tax burden is more important than ever.<\/p>\n<p>The Office for Budget Responsibility\u2019s detailed economic and fiscal outlook can be found <span style=\"text-decoration: underline;\"><strong><a href=\"https:\/\/obr.uk\/efo\/economic-and-fiscal-outlook-march-2023\/#annex-a\" target=\"_blank\" rel=\"noopener\">here<\/a><\/strong><\/span>.<\/p>\n<p>Alternatively, our <a href=\"https:\/\/devstagesite.co.uk\/smhgroup\/chartered-accountants\/\"><span style=\"text-decoration: underline;\"><strong>Yorkshire and Derbyshire based Accounting &#038; Business Advisory<\/strong><\/span><\/a> can assist on <strong>0114 266 4432<\/strong> or <a href=\"mailto:info@smh.group\"><span style=\"text-decoration: underline;\"><strong>info@smh.group<\/strong><\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Analysis of the projected outcomes of the government\u2019s tax policies show an expected increase to the number of higher rate personal taxpayers, with the corporate tax yield expected to grow substantially.<\/p>\n","protected":false},"author":4,"featured_media":24767,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3],"tags":[69,83,98,13,14],"class_list":["post-24765","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory","tag-capital-gains-tax","tag-chartered-accountants","tag-financial-advice","tag-inheritance-tax","tag-tax-planning"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - 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