The Budget isn’t even here yet and the tax take is rocketing (Image: Getty)
Taxpayers are being silently ripped off, and many don’t even realise it. HMRC’s latest figures, published yesterday, show total tax and National Insurance (NI) receipts hit a record £467.3billion between April and September. That’s £29.5billion more than in the same six months last year. That doesn’t mean Andy Burnham has personally imposed a £30billion tax hike. But it does show the scale of the rising burden tripping up taxpayers on his watch, even before Chancellor John Healey announces still more taxes in next week’s Budget.
The increase includes £17.8billion more from income tax, capital gains tax and NI, £3.8billion extra in VAT and £6.4billion more from business taxes. Some of this increase reflects rising wages, prices and business profits, rather than new tax rates. But taxpayers are still handing over more, as frozen tax thresholds help the Treasury take an ever bigger slice of our earnings. Over the full 2026/27 tax year, the total additional take is heading for a staggering £60billion. In just one year. Even in the unlikely event that Healey does nothing on October 28.
Former Labour chancellor Rachel Reeves raised taxes by an estimated £40billion in her first Budget and £26billion in her second, targeting employers’ NI, farmers and small businesses, but also our pensions, savings, capital gains, investments and inheritances. Those changes have only just started feeding into receipts, and their impact will grow because some of her levies haven’t even come into force yet.
Labour’s manifesto promised not to increase the headline rates of income tax, NI and VAT. Yet Reeves still hiked employers’ NI and extended the income tax threshold freeze, originally introduced by the Conservatives, through to 2031.
As wages rise but tax thresholds don’t, more people are dragged into paying income tax while existing taxpayers are pushed into higher bands, through a sneaky sleight of hand known as fiscal drag. Rachael Griffin, tax and financial planning expert at Quilter, said: “This happens without any change to the headline rates of income tax and shows just how effective fiscal drag has become as a revenue raiser for the Treasury.”
Pensioners are paying the price, too. A record 9.6million now pay income tax, and their numbers will climb again next April, when the new state pension rises above the £12,570 personal allowance.
Despite all this extra money, the government still borrowed a staggering £21.2billion borrowed in September alone while the national debt hit £3trillion for the first time ever. We could end up borrowing another £150billion over the year, yet Labour refuses to cut spending. Burnham talks endlessly about the cost-of-living crisis while ignoring how taxes are making people poorer, too.
Worse, several of Reeves’s changes have yet to come into force, including plans to bring unused pension funds into the inheritance tax net next April. Her 2% surcharge on savings interest and rental income are also due next April. The mansion tax and per-per-mile have still to take effect. Reeves’s pensions salary-sacrifice raid starts in 2029.
Tory or Labour, governments have become adept at raising taxes without the chancellor of the day announcing anything, thanks to fiscal drag. To take just one example, the £325,000 inheritance tax nil-rate band hasn’t increased since 2009. NFU Mutual says it would now be £532,500 if it had kept pace with inflation. The £3,000 annual IHT gifting allowance has been frozen since 1981. What a total con. They’re taking us all for mugs.
Healey may yet announce more tax increases next Wednesday. But even if he doesn’t, the tax burden is already rocketing and we’re all poorer as a result. Remember that when the Budget arrives. You’ll be paying more, whatever the Chancellor says or does.
We Are Being Hit With a Sneaky £30bn Tax Grab – Before Burnham’s Budget
British taxpayers are facing growing pressure on their finances as new figures reveal that the government collected almost £30 billion more in taxes and National Insurance during the first six months of the 2026/27 financial year than it did during the same period a year earlier.
The figures have intensified concerns about the cost of living, with households already struggling to manage food prices, energy bills, mortgage payments and everyday expenses.
With Chancellor John Healey preparing to deliver his Budget on October 28, attention is turning towards the amount of money the Treasury is collecting and whether further tax increases could be on the way.
The latest figures show that tax and National Insurance receipts reached £467.3 billion between April and September 2026, an increase of £29.5 billion compared with the corresponding period last year.
Although this increase does not represent a single new tax imposed by Prime Minister Andy Burnham, it highlights the growing financial burden facing households and businesses.
Critics argue that taxpayers are increasingly paying more without necessarily seeing an equivalent improvement in public services. The government, meanwhile, must find a way to fund its spending commitments while managing public debt and responding to demands for economic support.
The approaching Budget could therefore prove significant for millions of people who want to understand how much of their income will remain in their pockets.
The £29.5 billion increase explained
The latest figures reveal increases across several major sources of government revenue.
Income tax, capital gains tax and National Insurance receipts reportedly accounted for £17.8 billion of the increase. VAT receipts rose by a further £3.8 billion, while business taxes contributed approximately £6.4 billion more than during the same period a year earlier.
These figures illustrate the scale of the additional revenue being collected by the Treasury.
However, the increase should not be confused with a new £29.5 billion tax announced in one policy decision. Tax receipts can rise for several reasons, including higher wages, inflation, stronger business profits and changes to tax rules.
The distinction is important because a rise in the amount collected does not necessarily mean every taxpayer has experienced the same increase in their personal tax bill.
Nevertheless, the figures have raised questions about whether the government is relying too heavily on increasing revenue while households continue to face financial difficulties.
For workers, the key concern is whether pay rises are sufficient to compensate for higher prices and increased tax payments. For businesses, the question is whether higher costs leave enough money available for investment, recruitment and expansion.
For pensioners, the concern is whether modest increases in retirement income could push more of their money into the tax system.
These are the issues that will shape the debate surrounding the Budget.
The hidden impact of frozen tax thresholds
One of the most important factors behind rising tax receipts is a policy known as fiscal drag.
Fiscal drag occurs when tax thresholds remain unchanged while wages and other incomes increase. As a result, people can begin paying income tax or move into higher tax bands without the government formally increasing the headline tax rates.
The personal allowance, which is the amount most people can earn before paying income tax, has remained at £12,570. The freeze on income tax thresholds has also been extended until April 2031.
This means that someone receiving a pay rise could find that a greater proportion of their earnings becomes taxable.
Imagine a worker whose salary rises to compensate for inflation. Although their pay may be higher in pounds, the increase might not translate into a substantial improvement in their standard of living. Higher prices can erode the value of the pay rise, while frozen tax thresholds can increase the amount of income subject to tax.
Over time, the combined effect can become significant.
Critics describe this process as a stealth tax because the additional revenue can accumulate gradually, without the government announcing an obvious increase in the main rates of income tax.
Supporters of maintaining frozen thresholds may argue that the policy helps the government manage public finances and fund essential services. However, taxpayers are entitled to ask whether the distribution of the burden is fair, particularly when household budgets remain under pressure.
Pensioners face another financial challenge
Pensioners are among those likely to pay close attention to the government’s tax decisions.
Many retirees rely on a combination of the state pension, private pensions, savings and other income. Their financial circumstances can vary considerably, but people living on relatively fixed incomes may have limited opportunities to increase their earnings when costs rise.
A further complication arises when pension increases push annual income above the personal allowance.
If the tax-free threshold remains frozen while pension payments increase, more retirees can become liable for income tax. Existing taxpayers may also find that they pay more as their income rises.
This does not mean that every pensioner will pay income tax, but it highlights a potential problem for people whose retirement income is close to the threshold.
The government must also consider the effect of taxation on those who have saved throughout their working lives. Changes affecting pensions, investments and inheritance can influence how families plan for retirement and pass wealth to the next generation.
For many people, the concern is not simply the amount of tax they pay today. It is the uncertainty surrounding what they might be expected to pay over the coming years.
Healey’s Budget will be closely examined for any measures that could affect pensioners, savers and people approaching retirement.
Previous tax changes continue to affect households
The current increase in receipts also comes after earlier Budgets introduced measures affecting employers, businesses, savings and investments.
Some tax changes take time to feed through into government revenue. Others have delayed implementation dates, meaning that households and companies may not yet be experiencing their full financial effects.
The extension of frozen tax thresholds is particularly important because its impact accumulates over several years.
Previous increases in employer National Insurance contributions have also affected businesses’ employment costs. Employers facing higher expenses may respond in different ways, including adjusting recruitment plans, prices, investment or pay settlements.
The eventual impact varies across industries and individual companies, but the wider question remains whether the tax system is supporting economic growth while raising sufficient revenue for public services.
Businesses need predictable rules when making long-term decisions. Households also need to know how tax policies could affect their disposable income.
If the Budget introduces further changes, the government will need to explain not only how much additional revenue it expects to collect but also who is likely to bear the cost.
Why the government is under pressure
Burnham’s government faces competing demands on public finances.
Public services require funding, defence commitments have become increasingly expensive, and households continue to seek help with the cost of living. At the same time, high borrowing costs and substantial public debt limit the government’s room for manoeuvre.
The Chancellor must decide how to balance these competing priorities.
Raising taxes could provide additional revenue, but further increases may leave households with less disposable income and businesses with fewer resources for investment. Cutting spending could help control borrowing, but reductions may create difficulties for services that are already under pressure.
Borrowing provides another option, although it creates future interest costs and can become more expensive when financial markets demand higher returns on government debt.
There is no simple solution that satisfies every group.
The challenge is to produce a credible financial plan that explains how public spending will be funded, how debt will be managed and how the economy can grow without placing an unsustainable burden on taxpayers.
For Burnham and Healey, public confidence will depend partly on whether the government can demonstrate that its policies are consistent and that the costs are being distributed fairly.
What could happen in the Budget?
Ahead of October 28, attention has focused on possible changes to taxes affecting banks, businesses, property, savings and online marketplaces.
Some proposals have been discussed publicly, while others remain speculation. Until Healey announces the final measures, taxpayers should not assume that every reported possibility will become government policy.
The Chancellor is also expected to face pressure to support households dealing with energy costs and other essential expenses.
Any relief measures will need to be considered alongside the government’s need to raise revenue. A tax increase in one area could potentially help finance support elsewhere, but the benefits and costs may fall on different groups.
That creates difficult choices.
A policy intended to help low-income households, for example, may still affect other taxpayers indirectly if it is funded through higher business costs or changes to savings taxation.
The government should therefore publish clear explanations of the expected effects of any new measures, including their impact on different income groups and businesses of different sizes.
Transparency will be especially important if ministers make changes to allowances, thresholds or reliefs rather than simply increasing headline tax rates.
The real question for British taxpayers
The additional £29.5 billion in tax receipts has become a symbol of the wider argument over the direction of Britain’s public finances.
The figure does not prove that Burnham personally imposed a new £30 billion tax, but it does demonstrate that the Treasury collected substantially more revenue during the first half of the financial year.
For households, the important question is whether rising tax receipts will translate into better public services, greater economic security and a more manageable cost of living.
For businesses, the issue is whether the tax environment will allow them to invest, employ workers and remain competitive.
For pensioners and savers, the concern is whether their incomes will keep pace with rising costs once tax has been taken into account.
As the Budget approaches, the government will have to explain how it intends to answer these concerns while maintaining control over borrowing and public spending.
The public will also need to distinguish between taxes that have already been introduced, existing policies that are increasing revenue and possible measures that have not yet been confirmed.
Ultimately, the debate is about more than a single headline figure. It concerns the relationship between taxation, public services, economic growth and household prosperity.
Healey’s Budget will provide an opportunity for the government to set out its priorities and explain how it intends to fund them.
For taxpayers, the central test will be whether the decisions made in Westminster deliver a credible plan for the country’s finances without leaving ordinary households struggling to make ends meet.