Find out more about tax collection since the pandemic began
As expected, the coronavirus pandemic had an astronomical impact on the economy in the last tax year. Here is a breakdown of the main statistics provided by the most recent report by HMRC.
The 2020/21 report outlines all of the main tax statistics, but the singular key point this year has undoubtedly been nearly a £30bn reduction in tax revenue collected as a direct result of the coronavirus pandemic. The report states that a total of £608.8bn has been collected in tax revenues, as opposed to the £636.7bn collected the previous financial year. Although the authority has stated that this number is still higher than it was originally forecasted.
The HMRC stated that the drop was a direct result of the pandemic as it had to reduce its compliance activity to re-prioritise resources to support departments of the most need. HMRC moved its skilled advisers from PAYE and self-assessment departments to COVID-19 business support schemes, to ensure survival of businesses that keep the economy afloat.
As a result of the reduction of compliance work being undertaken, it has meant that HMRC’s work that was being carried out in the avoidance, evasion and other non-compliance areas had taken a 18% drop in activity. This has meant that the £36.9bn that was claimed the previous year within this area dropped to £30.4bn. The tax gap is estimated at 5.3% by the tax authority.
Due to the pandemic, we saw a range of additional support schemes that became available to ensure survival of the economy and that offered vital support to individuals as work became scarce. The Coronavirus Job Retention Scheme (CJRS) supported over 11.5 million jobs and paid out £60.7bn in grants through the scheme. In addition to that, £7.2million was paid to the self-employed across 2.7 million individuals.
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