Treasury grabs extra £85bn in taxes from Brits after Covid measures end

The UK government has added an extra £85.1bn in tax revenues over the last year after a raft of Covid-19 support measures were scrapped, new figures out today show.

Total revenue flowing into the treasury from Brits’ pockets hit £775.6bn in the year to April 2022, up from £690.5bn in the previous year, according to the Organisation for Economic Co-operations and Development (OECD).

The surge was steered by several government support policies such as a stamp duty relief and a cut to VAT to help households and businesses cope with the economic shock of the Covid-19 pandemic and lockdown measures.

Economic activity also recovered over the last year, bumping the government’s tax revenues higher.

Over the last decade, revenues have also climbed 41 per cent, the OECD said.

Brits are set to hand yet more money over the government in the coming years.

Tax revenues for the government are on course to top £900bn in the current year, according to the Office for Budget Responsibility, partially driven by chancellor Jeremy Hunt at last month’s autumn statement raising taxes around £25bn.

In the 2025/26 tax year, government income will top £1 trillion for the first time ever, the OBR reckons.

The tax burden, measured by calculating taxes as a share of the economy, is set to hit its highest level since the second world war.

Taxes are on an upward path

The fiscal tightening was sparked by Hunt trying to repair the UK’s credibility with investors after former prime minister Liz Truss’s botched mini budget in which she launched £45bn of unfunded tax cuts despite inflation running at a four decade high.

Hunt froze income tax bands for an extra year and launched a national insurance stealth tax grab on businesses to the tune of nearly £6bn.

A treasury spokesperson said: “Our priority is to restore economic stability in the fairest way possible, which is why we have protected the most vulnerable and those with the broadest shoulders – from businesses to individuals – will bear more of the burden to strengthen public finances.”