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Home Finance Stamp duty surges by 29% as holiday glow lingers

Stamp duty surges by 29% as holiday glow lingers

by uma

 

  • Stamp duty paid between April and August 2022 was up 29% on the same period last year.
  • This is due to the lingering effects of the stamp duty holiday which ended in September 2021.
  • Inheritance tax receipts were up 11% to £2.9bn. This was due to a small number of higher value payments.
  • Income Tax and National Insurance receipts were up £22.1bn to £161.1bn.
  • This reflects a 2.9% growth in the number of paid employees and median pay increase of 6.6%, at a time when income tax thresholds have been frozen.
  • The increase in National Insurance threshold in July and the self-assessment deadline are also included in this time-period.
  • Air passenger duty continues its ascent as more people book holidays.

HMRC has published the latest tax and National Insurance data HMRC tax receipts and National Insurance contributions for the UK (monthly bulletin) – GOV.UK (www.gov.uk)

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:

“Stamp duty receipts continue to surge, topping a whopping £8.9bn between April and August this year. This is not only a sign of a housing market in rude health but also down to the lingering after-effects of the stamp duty holiday, which ended in September last year. Whether we continue to see such steep increases in stamp duty over the coming months remains to be seen as the effects of this holiday are stripped out of the figures and soaring interest rates and cost of living crunch put a dampener on our plans to buy that dream home. 

There are also growing signs that homes are taking longer to sell which could also mean more would-be sellers are putting off the decision to put their homes on the market – this means we could soon see fewer sales feeding into lower receipts in the coming months.

Air Passenger Duty continues its ascent reflecting our desire to get away on holiday after two years of being stuck at home. It’s still way below pre-pandemic levels but it is rising though again. It will be interesting to see if rising costs put a dampener on demand as summer ends and inflation continues to take huge bites out of our savings.

Several factors affected Income Tax and National Insurance receipts between April and August. The number of paid employees continued to grow – up by 847,000 during this time-period while median pay was also on the increase. At the same time, frozen income tax thresholds dragged more people into paying higher rates of tax. The self-assessment deadline at the end of July will also have contributed to the £22.1bn boost in figures.”

 

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