HMRC is hitting more families with 'stealth tax rises' as frozen thresholds pull millions into higher tax bands, financial experts have warned. Inheritance tax receipts for June 2026 came in at a record high of £2.3 billion, which is £96 million higher than the same period last year, according to data from HMRC.
Record Tax Receipts Across Multiple Levies
Income Tax, Capital Gains Tax (CGT) and National Insurance Contribution (NIC) receipts for April 2026 to June 2026 were also at a record high at £132.1 billion – £11.4 billion higher than the same period last year. This 'upward trajectory' of tax income comes as more households are pulled into higher thresholds in a 'tax rise by stealth', say experts at financial firm Forvis Mazars.
Inheritance Tax Thresholds Frozen Despite Rising Property Values
Although Inheritance Tax thresholds remain the same, the value of property has increased, meaning more families are pulled into paying Inheritance Tax on estates. Similar has happened to Income Tax, with frozen thresholds seeing more households pushed into paying tax, or paying tax at a higher rate, as wages rise.
Tom Trewby, Director, Private Client Tax at Forvis Mazars, commented: “The upward trajectory of tax receipts continues for HMRC as fiscal drag pulls more people over the frozen thresholds. It’s a tax rise by stealth: rising asset prices mean that inheritance tax is hitting families it never used to catch, while the number of higher-rate UK income taxpayers is expected to rise to 7.7m in the current tax year - nearly 2m higher than in 2023-24. The number of additional-rate taxpayers, who earn more than £125,140 and pay the 45p rate of income tax, is projected to reach 1.29m this year.”
Pensions to Be Included in Inheritance Tax from 2027
From April 2027, pensions will also be included in Inheritance Tax for the first time, leading to even higher bills or more households taxed, or both. Mr Trewby added: “The IHT landscape will shift from April 2027 as pensions fall into scope. This won’t only mean higher IHT tax bills, but headaches for executors who will have an additional legislative burden. The most important step families can take now is to seek advice. Doing this early is the best way to navigate through these changes, and make the most of the reliefs and exemptions available.”
Possible Policy Changes Ahead
This week, rumours have abounded that new Prime Minister Andy Burnham may look at changes to Income Tax thresholds in response to the issue of fiscal drag, in a bid to tackle the cost of living crisis. Mr Burnham told The Times that “frustration” about the five-year-long freeze in the £12,570 limit on how much can be earned before paying income tax had “lodged in my mind” during his campaign to win the Makerfield by-election. But any changes to the threshold for the future are yet to be announced, following an extension to the existing freeze put in place by Rachel Reeves, which is currently set to last until 2031.
