A lot of what Financial Planners do is related to tax or, to be more realistic, the avoidance of tax. With current trends it looks like they will never run out work.

That’s because the tax take is going up rapidly and that shows no sign of changing. In addition, I suspect tax will become a much more contentious issue in the future and advice will be in demand more and more.

In 2023/24 the UK government took about £1.1trillion in tax receipts from income tax and other tax sources - about 40% of UK GDP, according to a recent House of Commons Library report on Tax Statistics. This is the highest proportion since the 1980s.

The same report stated that 10% of income taxpayers with the highest incomes paid over 60% of income tax receipts.

Tax is also getting ever more complicated. The physicist Albert Einstein is quoted with once saying: "The hardest thing in the world to understand is the income tax." He wasn’t far wrong.

One could be forgiven for thinking that governments make tax complicated just so we don’t question what we can’t understand.

I’m reminded of all this by our story this week on tax and how the tax take is rising rapidly due mainly to frozen thresholds and also, to be fair, due to some higher pay rises because of the recent inflation spike. Some of the extra tax take, of course, is to pay for government support schemes during the Covid outbreak. Covid was costly both in human life and in money.

All this extra tax is producing a windfall for the Treasury and may, very possibly, inspire a new post-election government to begin to review the tax burden. Or alternatively just spend this windfall - a more likely prospect.

I suspect most of us do not like paying taxes but accept that if we want decent public services they must be paid. One challenge in recent years has been the move to shift the tax burden away from the lower paid and onto the better paid. This has some merits but is producing a more complex and lopsided tax system and burdening higher earners.

The better off, Financial Planners’ main clients, are shouldering far more of the tax burden. All this makes tax planning more important and this is likely to be the case over the next few years as tax thresholds will mostly remain frozen until 2028. This extended freezing of thresholds to 2028, supported by both the main parties, will mean far more people dragged into the tax net and the higher income tax brackets. Thousands more, perhaps millions.

Recent trends are concerning too. There’s been lots of coverage about the rapidly rising Inheritance Tax (IHT) tax take. Latest figures this week show that IHT receipts for April and May, the first two months of the new tax year, were £1.4bn, up by £200m on the same period last year. It’s true that relatively few people pay IHT but that number is growing, particularly in the South East as property prices rise.

Latest estimates by the OBR are that IHT take could reach an estimated £9.7bn by 2028/29 compared to £7.5bn last year.

Many other tax takes are also rising rapidly. Analysis by platform Nucleus found receipts are higher from Income Tax, Capital Gains Tax and National Insurance Contributions (NICs), business taxes and stamp taxes. Only VAT and fuel duty showed lower receipts.

Consultants Broadstone said there was also a record £8.1bn of Insurance Premium Tax (IPT) collections last year. The first two months of the new tax year have seen £2bn of IPT receipts, an extra £228m compared to the previous year. Much of this was due to more people buying Private Medical Insurance due to concerns about NHS failures.

Longer term, for a tax system to be supported by the population it needs to be fair, balanced and as simple as possible. That’s increasingly not the case at present and whichever party wins the election will need to face up to the need for greater tax simplicity and sensible reform to ensure people are not over-taxed.

Every pound lost to unnecessary taxes is a pound not spent on goods and services, the spending that helps drive the economy.

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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and mainstream news. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days.  Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Follow @FPT_Kevin >Top Tip: Follow Financial Planning Today on Twitter / X @_FPToday for breaking news and key updates