UK Tax Receipts Hit £938.8 Billion in 2025–26: HMRC Annual Bulletin Explained

HM Revenue & Customs published its annual tax receipts bulletin for 2025–26, showing provisional cash receipts of £938.8 billion — a 9.3% increase on 2024–25. The release covers the full tax year to 5 April 2026 and sets the baseline as HMRC begins reporting 2026–27 monthly data.

For UK businesses and employers, the breakdown explains why payroll costs and VAT liabilities feel heavier even when trading is flat: employer NIC changes from April 2025, frozen income tax thresholds, and strong PAYE receipts are lifting the overall tax take as a share of GDP to 30.7%.

Total HMRC receipts grew from £859.0 billion in 2024–25 to £938.8 billion in 2025–26 on a cash basis. Receipts as a proportion of GDP rose to 30.7%, up from 29.4% the year before.

Income tax, capital gains tax, and NICs combined reached £552.8 billion — 59% of all receipts and 18.1% of GDP. HMRC attributes much of the year-on-year jump to the employer Class 1 NIC rate increase and the reduction in the secondary threshold from May 2025.

Figures remain provisional until aligned with HMRC's annual report and accounts due in summer 2026. Corporation tax totals are especially liable to revision as return data arrives.

VAT receipts totalled £180.7 billion (5.9% of GDP), up from £171.0 billion in 2024–25. HMRC links the increase to inflation widening the nominal VAT base alongside policy changes.

Business taxes — corporation tax, diverted profits tax, energy profits levy, and related charges — brought in £101.4 billion gross of credits, compared with £94.8 billion the year before. Onshore corporation tax strength, particularly from financial sector companies, featured in late-year monthly peaks.

Stamp taxes reached £18.8 billion, reflecting higher transaction volumes and rate changes for additional dwellings and residential thresholds from April 2025. Hydrocarbon oils duty continued a gradual decline as electric and hybrid vehicle use reduces diesel miles.

HMRC's monthly bulletin shows April–May 2026 receipts of £153.7 billion — £9.8 billion higher than the same two months in 2025–26. PAYE income tax and NICs alone contributed £92.2 billion, with April 2026 marking the highest PAYE month on record.

VAT for April–May 2026 totalled £35.1 billion (+£1.2 billion year-on-year). Business taxes added £8.6 billion (+11%). Self Assessment receipts were negative at -£0.7 billion, as expected at the start of each financial year when repayments exceed collections.

January 2026 Self Assessment receipts hit a record peak, though HMRC advises treating January and February together because of payment-timing effects around the 31 January deadline.

Higher employer NIC costs are now embedded in payroll — budget 2026–27 forecasts and pricing models should use post-April 2025 rates, not pre-reform assumptions.

Strong PAYE and VAT receipts signal HMRC's focus on in-year collection will intensify, aligning with June's consultations on mandatory Direct Debit and ITSA timely payments. Cash-flow planning matters as the tax system moves closer to real-time settlement.

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