Self-assessed income tax receipts down £4.5bn in July

Self-assessed income tax receipts hit decreased by £4.5bn to £4.8bn in July 2020 when compared with the same month last year, new figures from the ONS have revealed.

The ONS said this was the result of the government’s deferral policy, where businesses and individuals had the option to defer payments if they were finding it difficult to make their second payment to HMRC by 31 July 2020 due to the impact of coronavirus.

It comes as Government debt exceeded £2trn for the first time in July, £227.6bn more than at the same point last year.

Debt at the end of month was also 100.5% of gross domestic product (GDP), an increase of 20.4 percentage points compared with the same point last year and the first time it has been above 100% since the financial year ending (FYE) March 1961.

Additionally, the amount of income tax paid by millennials hit a “record” high in the UK last year, soaring 13.4% to £34.4bn, up from £30.4bn the previous year.

According to UHY Hacker Young, millennials and Generation-Z may be facing even higher tax bills in the future to cover increased Government spending in response to the coronavirus crisis.

It comes as the Office for Budget Responsibility estimates the Government could spend as much as £300bn over the next year alone.

UHY Hacker Young warned that millennials already face increased tax bills due to “fiscal drag”, whereby tax and national insurance brackets increase at a slower rate than inflation, putting more millennials onto higher tax rates.