Businesses and households are facing a heavier tax burden, according to the latest HMRC receipts.
Employer national insurance contributions reached £11.3 billion in May, up £848 million from £10.66bn in the same month last year. That represents an 8% rise in immediate employment tax costs for businesses.
Corporation tax receipts also increased, rising 12% to £3.31bn, compared with £2.96bn in May 2025. Across the first two months of the 2026/27 tax year, combined business taxes reached £8.6bn, up 9.3% on the same period last year.
Employees are also paying more. PAYE income tax receipts hit £24.2bn in May, up 9% from £22.2bn a year earlier. The increase reflects the effect of frozen tax thresholds, with more people paying tax or moving into higher-rate bands as wages rise.
In May 2021, before the threshold freeze began to bite, income tax receipts stood at £15.2bn. In five years, the monthly figure has risen by 46%. The cut to employee NICs in early 2024 has softened the impact, but overall tax receipts remain high.
Total tax receipts reached £66.38bn in May. For the tax year to date, receipts stood at £153.68bn, up from £143.90bn in the same period last year.
Government borrowing has also increased. The UK borrowed £23.3bn in May, more than 30% higher than a year earlier. Debt interest alone reached £11.7bn, adding further pressure to the public finances and increasing speculation about future tax rises.
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