Andrew Hubbard

Written by: Andrew Hubbard

Andrew Hubbard


Flu, Alzheimer’s and the apprenticeship levy: there’s no escaping tax

We all know the adage that there is nothing certain in life other than death and taxes. Some recent HMRC tax receipts statistics have shown just how strong the link between the two actually is.

In what is, let’s face it, a pretty boring set of numbers there is a comment on inheritance tax receipts which stands out. Interestingly, ‘receipts increased substantially in 2015-16 as a result of rising asset values and a higher number of deaths in the final months of 2014-15 compared to the same period in previous years’. As inheritance tax is payable six months after a death, the IHT on deaths in the winter of 2014-15 would show up in the statistics for 2015-16.

Unpicking this further, there was a 5.6 per cent increase in death registrations in 2015, which was the largest annual increase since 1967-8. Nearly all of those additional deaths (86 per cent of the total) were of people over 75 with the largest increase being in the over 90s. The additional deaths were partly attributable to dementia/Alzheimer’s but also the flu virus in early 2015 was of a strain predominantly affecting older people.

Given that only about 4 per cent of estates pay inheritance tax these figures do suggest that death is no respecter of wealth. If most of the additional deaths had been among the 96 per cent of the population who don’t pay IHT then the increase in deaths would not have had any effect on the IHT statistics. There really is no escape!

At the other end of the age spectrum it is notable that the government collected almost as much from the apprenticeship levy in the first five months of its operation as it did in the same period from the three main environmental levies (landfill tax, climate change levy and aggregates levy). We have consistently argued in this briefing the case for a rebalancing of taxes towards using the tax system to protect the environment. Viewed in that light the additional tax on jobs seems a very odd policy choice.

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