HMRC collected £63.8billion more in Income Tax, Capital Gains Tax and National Insurance last year.
People receiving pay rises, bonuses or moving into better paid jobs could find themselves paying more tax than expected as frozen income tax thresholds continue to pull more workers into higher bands.
New figures published by HM Revenue and Customs (HMRC) show Income Tax, Capital Gains Tax and National Insurance Contributions generated £552.8billion for the Treasury in the 2025/26 financial year. That was £63.8bn higher than the previous year.
Receipts for April alone reached £52billion, up £4.4bn compared to the same month last year. The increase comes as income tax thresholds remain frozen until April 2031, a policy widely referred to as ‘fiscal drag’, where wage rises gradually push more people into paying higher rates of tax.
Clare Stinton, senior personal finance analyst at Hargreaves Lansdown, said: “The tax take continues.
“Data released by HMRC shows the big three taxes: Income Tax, Capital Gains Tax and National Insurance added a whopping £552.8bn to the public purse last tax year (2025/26) – up £63.8billion on the same period last year. Receipts for April hit £52bn – almost £4.4bn higher than last year.”
She warned that workers could end up paying more tax after receiving a pay rise or bonus.
Stinton said: “This shows fiscal drag is silently doing what the government hoped it would. With income tax thresholds frozen, more people will be pulled into higher tax brackets so a bonus, promotion, or job change could leave you paying more tax than you expected.
“Beware, moving up an income tax band doesn’t just affect the income tax you pay, it can reduce tax-free allowances and hike up other tax rates including tax on savings interest, dividends and capital gains.”
The Personal Allowance, which is the amount people can earn before paying income tax, has been frozen at £12,570 since the 2021/22 financial year.
The higher rate threshold also remains frozen, meaning more workers are gradually being dragged into the 40p tax bracket as wages rise.
Stinton said there are steps people can take to reduce the amount of tax they pay.
She said: “The good news? Proactive planning can help you keep more money in your pocket.
“It’s never been more important to keep an eye on your total income, paying money into your pension can help you keep more of what you earn and stay below tax thresholds. Using your ISA to shelter savings and investments will also reduce your tax bill.”
Separate HMRC figures also showed Capital Gains Tax receipts reached nearly £24.3bn in 2025/26, up 77 per cent on the previous tax year.
Inheritance Tax receipts continue to remain near record levels, with frozen thresholds and rising property values pushing more estates into paying the tax.
