HMRC receives £5.5bn from 43% capital gains jump
- 4th November 2015
- Accountancy & Finance
A succession of increases in the Capital Gains Tax (CGT) rate, combined with the removal of CGT reliefs, has seen bills rise by 43% this year to £5.5bn - up from £3.4bn in the previous year.
An increase in turnover from investments, including shares and buy-to-let property, has also had an impact in the windfall for the Treasury.
CGT is sometimes thought of as a disincentive for businesses to grow beyond a certain point, which can lead to lower levels of job creation.
London and the South East pay the biggest share of CGT, although tax income in the North is rising sharply according to experts at UHY Hacker Young.
The firm says that the North East England region saw a rise of 87% in the tax year 2013-2104, from £46m to £86m. However, in London and the South East, £2.3bn in CGT was levied on taxpayers, representing 47% of the UK’s total CGT taxation amount.
Beginning to bite
UHY partner Matthew Hodgson commented: "Recent increases to CGT are really beginning to bite. With an increase in the turnover of assets this has led to a dramatic increase in government revenues from this source."
"The top rate of CGT was increased to 28% as a response to the financial crisis, and many taxpayers would like to see this rate cut as the economic recovery beds in," he said.
"Many of these transactions such as the sale of a property or the sale of business assets are one off opportunities for individuals to turn their investment into cash for their retirement – so CGT can be really problematic," Hodgson added.
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