Tax receipts fall nearly 8% in 2020-21

HMRC collected £584.3bn in taxes in 2020-21 a decrease of 7.8% from the year before.

During 2020-21 receipts from income tax capital gains tax National Insurance and the apprenticeship levy combined accounted for 60% of the annual receipts.

There was a slight increase in receipts from these levies in the latest tax year to £352.1bn which HMRC says is likely to be due to a combination of reduced economic activity leading to lower tax liabilities and deferral and non-payment of liabilities during the Covid-19 pandemic

However VAT receipts were significantly lower - by £28.8bn - than in 2019-20 in part because of the VAT payment deferment policy but also as a result of the temporary reduced rate of 5% for the hospitality sector. Receipts in March 2021 were higher due to significant payments of VAT previously deferred.

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