How much tax did we pay last year?
The Chancellor predicted in Budget 2008 that we would pay £541 billion in tax in the 2008-09 tax year - whcih finished on 31 March. This was a healthy rise of 4.6% from the prior year's £517 billion. Unfortunately those predictions were made before the recession took hold.
The update at the November Pre Budget Report was much more gloomy. Tax was predicted to yield £517 billion, with the biggest drops being National insurance (down £7 billion),Corporation tax (down £6 billion) and Stamp Duty (down £5 billion).
Banks have historically made a big contribution towards corporation tax. In 2007-08, banks paid over £10 billion. However, in 2008-09 oil companies provided the largest contribution, aided of course by high oil prices in the first half of the year. It's thought that North Sea oil contributed over £13 billion in tax.
Since the Pre Budget Report, it's become clear that even those forecasts were optimistic. January is the peak month for tax receipts, as it's one of the main months for corporation tax and also the main month when individuals pay their tax bills (apart from PAYE, of course). January 2009 was down by about £5 billion compared to the previous year.
It's now thought that the tax yield will prove to be something like £500-505 billion, leading of course to greater Government borrowing. The first draft of the figures will be available to the Chancellor in time for his Budget speech.
