National statistics

Statistical commentary - November 2020

Published 27 November 2020

1. Summary

Key statistics for Income Tax in 2019 to 2020 are:

• Total net Income Tax receipts in 2019 to 2020 are estimated to be £193.2 billion, 1.16% higher than in 2018 to 2019

• Pay As You Earn (PAYE) Income Tax receipts for 2019 to 2020 are estimated to be £164.8 billion, 1.81% higher than the previous year

• Self Assessment Income Tax receipts for 2019 to 2020 are estimated to be £32.2 billion, 2.11% higher than the previous year

• Income Tax repayments in 2019 to 2020 are estimated at £7.7 billion

Figure 1: Income Tax Receipts 2010 to 2011 to 2019 to 2020

2. Income Tax Receipts

Table 2.8 provides a breakdown of net receipts of Income Tax by type of receipt and total repayments. It shows total net Income Tax receipts from 2008 to 2009 to 2019 to 2020. Total net receipts in 2019 to 2020 reached their highest ever level for a tax year. The overall increase from 2008 to 2009 to 2019 to 2020 is 25.94%.

Table 2.8 Income tax receipts: analysis by type 2008 to 2009 to 2019 to 2020

£ million		2008-09	2009-10	2010-11	2011-12	2012-13	2013-14
Receipts other than Self Assessment		136,771	128,134	137,800	137,689	138,445	141,745
of which:	PAYE	128,470	122,584	132,263	132,189	132,433	134,686
	Assessed income tax	198	130	80	60	69	87
	Tax deduction scheme for interest (TDSI)	4,365	2,676	1,994	1,763	1,860	1,879
	Other tax deducted at source	1,615	1,190	1,003	1,463	1,504	1,579
	Other receipts	2,122	1,554	2,460	2,215	2,579	3,515
Self Assessment, net of repayments		22,531	21,708	22,108	20,334	20,550	20,854
Repayments other than Self Assessment		-5,861	-4,961	-6,417	-7,084	-6,965	-5,702
Total net receipts		153,441	144,881	153,491	150,939	152,030	156,897

		2014-15	2015-16	2016-17	2017-18	2018-19	2019-20
Receipts other than Self Assessment		145,036	150,985	155,216	158,664	166,596	168,781
of which:	PAYE	139,506	145,652	149,751	154,266	161,909	164,841
	Assessed income tax	154	145	202	195	207	174
	Tax deduction scheme for interest (TDSI)	1,755	1,543	648	328	297	243
	Other tax deducted at source	1,223	1,320	1,596	974	970	1,086
	Other receipts	2,399	2,325	3,018	2,901	3,213	2,437
Self Assessment, net of repayments		23,645	24,327	29,293	28,294	31,518	32,185
Repayments other than Self Assessment		-5,572	-6,861	-7,443	-6,910	-7,083	-7,724
Total net receipts		163,109	168,451	177,065	180,048	191,031	193,242

1. “Self Assessment, net of repayments” represents the Income Tax element only
2. “Repayments other than Self Assessment” includes payments of tax credits
3. “Repayments other than Self Assessment” is exclusive of public expenditure
4. Totals may not equal the sum of their components because of rounding

Pay As You Earn (PAYE) figures include all receipts of tax collected from employers or pension schemes under PAYE. They include some payments of tax on investment income or in respect of income from previous years coded out under PAYE (these amounts are not separately distinguished). PAYE receipts also include deductions from sub-contractors made under the Construction Industry Scheme (CIS).

Between 2010 to 2011 and 2011 to 2012 net Income Tax receipts fell by 1.7% (or £2.6 billion) largely due to lower Self Assessment receipts. The lag in the Self Assessment payment regime means that receipts in 2010 to 2011 and 2011 to 2012 relate largely to liabilities for 2009 to 2010 and 2010 to 2011 respectively.

The introduction of the 50% additional rate of Income Tax in 2010 to 2011 had a major effect on the behaviour of taxpayers with incomes above the additional rate threshold of £150,000 with large amounts of income forestalling, i.e. income brought forward into 2009 to 2010 from later years in order to be taxed at 40% before the 50% rate came into effect. Self Assessment Income Tax liabilities were therefore inflated in 2009 to 2010 and depressed in 2010 to 2011 as the effects of forestalling started to unwind. This then boosted receipts in 2010 to 2011 and depressed them in 2011 to 2012.

In the 2017 to 2018 tax year (July 2017 onwards), HMRC introduced a new system that uses information from the customer, as well as Real-Time Information provided by employers and pension providers, to review customers’ liabilities more frequently ‘in-year’ to adjust tax codes throughout the year. This ‘In year coding’ will increase the likelihood of a customer ending the year not owing, or being owed tax. For Income Tax receipts, this causes tax to be collected earlier than it might have been previously, and also reduces the likelihood of some repayments.

Self Assessment tax receipts increased from £24.3 billion in 2015 to 2016 to £29.3 billion in 2016 to 2017 (an increase of 20.4%). This large increase is likely driven by changes to dividend taxation rules.

Figures 2 and 3 show some key components of gross Income Tax receipts.

Tax Deducted Scheme for Interest – Figure 2: Until April 2016, banks and building societies deducted tax at a rate of 20% from interest paid on accounts unless the investor was not liable to pay tax and had registered to receive interest gross. They also deducted Income Tax from their annual payments, such as interest on bonds and debentures. They then paid the Income Tax deducted to HMRC. Since April 2016, Banks and building societies have stopped deducting tax from account interest. Some non-interest payments, which are taxable, will still be deducted.

Other Receipts – Figure 3: This covers all tax deducted at source other than under PAYE and TDSI. There are two main types; (1) interest on securities paid by the Bank of England or other paying agents, who pay the tax direct to HMRC (recipients of the interest are credited with the tax deducted), (2) Income Tax payments equivalent to TDSI but made by companies other than banks. Other Receipts also includes receipts from investigation settlements and Income Tax payments which could not be allocated to a particular category.

Figure 2: Tax deduction scheme for interest (TDSI)

Figure 3: Other receipts

3. Income Tax Credits and Repayments

Table 2.9 provides a breakdown of Income Tax repayments by type.

Table 2.9 Income tax credits and repayments: analysis by type 2008 to 2009 to 2019 to 2020

£ million		2008-09	2009-10	2010-11	2011-12	2012-13	2013-14
Income tax credits		17	16	10	8	8	7
Repayments		5,844	4,945	6,407	7,076	6,957	5,695
of which:	Individuals	2,100	1,500	3,050	3,900	3,550	2,700
	Personal pension contributions	2,206	1,877	1,679	1,615	1,805	1,506
	Charities	912	922	978	1,027	1,049	1,060
	Personal Equity Plans/Individual Savings Accounts	157	152	162	173	169	167
Total tax credits and repayments		5,861	4,961	6,417	7,084	6,965	5,702

		2014-15	2015-16	2016-17	2017-18	2018-19	2019-20
Income tax credits		7	2	0	0	0	0
Repayments		5,565	6,859	7,443	6,910	7,083	7,724
of which:	Individuals	2,400	3,250	4,100	3,100	2,784	3,019
	Personal pension contributions	1,621	1,862	1,527	1,908	2,238	2,759
	Charities	1,190	1,260	1,270	1,260	1,319	1,378
	Personal Equity Plans/Individual Savings Accounts	169	160	160	30	8	8
Total tax credits and repayments		5,572	6,861	7,443	6,910	7,083	7,724

1. Includes payments of tax credits
2. Excludes repayments made via the Self Assessment system
3. Exclusive of public expenditure
4. Totals may not equal the sum of their components because of rounding

A repayment occurs when a taxpayer has paid too much tax to HMRC. Over payments may happen for a number of reasons, for example when people move in and out of work or receive changes to taxable benefits. Further information about tax repayments and ways of reclaiming overpaid tax is available on the HMRC website.

Repayments increased in 2019 to 2020 from £7.1 billion to £7.7 billion, an increase of £0.64 billion (9.04%).

Figure 4: Repayments, other than Self Assessment

Repayments dipped in 2009 to 2010 due to delays to the PAYE ‘end of year reconciliation’ for 2008 to 2009 linked to the introduction of a new PAYE administrative system (the National Insurance and PAYE Service, or NPS). Repayments then rose sharply in 2010 to 2011 and 2011 to 2012, reflecting the catch up from the initial NPS delays, the further speeding up of the end of year reconciliation process, and the greater accuracy of this process bringing more overpayments to light and therefore generating more repayments. The figures for 2011 to 2012 and 2012 to 2013 also reflect the clearance of a longstanding backlog of cases for tax years before 2007 to 2008.

Repayments have fluctuated over recent years. Growth in repayments due to personal pensions’ contributions has been offset by reductions in repayments to individuals. Generally overall repayments are expected to increase as receipts increase.