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RSM UK's Rachel de Souza looks at HMRC's Annual Report and Accounts.
                                
HMRC is a public body but like all companies, it publishes an annual report and accounts. For a document which covers over 300 pages, it makes interesting and informative reading. It provides an in-depth analysis of where the Treasury gets its money from. There are some surprising conclusions as well as evidence which supports speculation on what is happening in the wider economy.

HMRC has collected £627.9bn in revenues in 2018/19, an increase of 3.6 per cent on the prior year. Of this, income tax and national insurance contributions account for £329bn, a 4 per cent increase on the prior year, and corporation tax raised £53.5bn, an increase of just 0.4 per cent.

These increases reflect what we have seen more generally in the past year. Employment is at an all-time high meaning that more people are in work, whether employed or self-employed, full time, part time or in the gig economy, than ever before. We would therefore expect to see an increase in the amount of revenue generated by income tax and NICs. 

Perhaps it is more of a surprise to see that corporation tax receipts have increased only marginally. However, we have been hearing for some time now that businesses have been concerned about the uncertainty caused by the Brexit process and that there has been a global slowdown. Whatever the causes, the accounts tell us that the negligible increase in corporation tax means that, as a whole, UK businesses have not increased their profitability by any meaningful amount over the prior year.

The most surprising figure is that capital gains tax has risen by a massive 19.2 per cent to £9.3bn. There has been no rate change in the period and therefore the significant jump is not due to asset owners being driven by a government-led policy change. It must therefore come from somewhere else. HMRC’s accounts shed no light on the increase. However, it could very well be due to asset owners locking in their profits fearing that asset values will drop in the future. 

And finally, you may be interested to find out that HMRC costs about £4bn to run annually. Put another way, it spends just over half a penny to collect each £1 of tax revenue. Value for money? You decide!