Total tax revenues across the UK dropped by £33.4bn last year, according to the annual revenue statistical release from the Organisation for Economic Co-operation and Development (OECD).
The OECD say that the impact of the Covid-19 pandemic on tax revenues was less pronounced than during previous crises, in part, due to government support measures introduced to support households and businesses.
Total revenue from taxes across the UK fell to £692.2bn during the last financial year for 2020/21 down from £725.6bn during 2019/20.
The UK ranked 23rd out of the 38 OECD countries in terms of the tax-to-GDP ratio during 2020/21 with a tax-to-GDP ratio of 32.8 per cent compared with the OECD average of 33.5 per cent.
The OECD said tax structures in the UK are characterised by higher revenues from taxes on personal income, profits & gains; property taxes; and value-added taxes.
Council and property taxes
Analysis from the real estate adviser Altus Group showed today that an £8.84bn drop in total tax receipts came from property taxes.
In the UK, property taxes include all receipts from Council Tax, Business Rates, SDLT (stamp duty land tax) and LBTT (land and building transaction tax) in Scotland.
Altus Group say taxes on property for 2020/21 fell to £81.4bn in the UK down from £90.3bn on the previous financial year, with property taxes in the UK accounting for 11.76 per cent of all taxes collected – around £1 in every £8.50.
Traditionally, the UK has had the highest property taxes in the developed world with Altus Group adding that last year Canada, France and Korea all exceeded in UK on the property tax-to-GDP ratio measure.
But Robert Hayton, UK President at Altus Group, warned “whilst the business rates holiday was welcome for occupied retail, leisure and hospitality premises there are tens of thousands of appeals which are being kicked into the long grass forcing businesses to continue to suffer artificially high rates bills going back to 2017”.
At the 2021 Autumn Budget the Government announced several changes to reduce the burden of business rates by £7bn over the next 5 years.