Govt unable to estimate lifetime allowance tax take

HMRC-Building-700x450.jpgThe Treasury and HM Revenue and Customs say they cannot provide estimates on how changes to the lifetime allowance will affect tax revenues over the coming tax years.

The Treasury was able to provide data about the lifetime allowance tax take for the past five tax years. In 2011/12, this stood at £47m, rising to £83m in 2013/14, and then to £125m by 2015/16.

But for forward-looking projections, it said it did not hold any data.

HMRC says: “HMRC do not produce projections of the amount of tax revenue generated from breaches to the lifetime allowance in future years.”

It could also not provide an estimate of what the likely tax take from breaches to the lifetime allowance would be in this current tax year based on returns so far.

HMRC says: “The deadline for self-assessment returns for the tax year 2016/17 are due by 31 January 2018. Therefore we do not currently hold this information.”

The lifetime allowance came in at £1.5m 10 years ago. It was then increased for four consecutive years before hitting £1.8m in 2010.

It was then cut to £1.5m in 2012/13, and then £1.25m in 2014/15.

For the 2016/17 tax year, it was cut from £1.25m to £1m.

In its 2015 Budget documents, the Government estimated the additional impact to tax receipts of reducing the LTA to £1m would be £60m in 2015/16, rising to £420m by 2017/18 and £590m by 2019/20.