Overall receipts for stamp taxes for 6 April to 5 May 2023 were £2.4bn, which was £1.1bn lower than in the same period a year earlier. The majority of this change (£900m) related to stamp duty land tax (SDLT), driven by lower transaction numbers, the lower rate of taxation and a more generous relief for first time buyers introduced in September 2022.

‘After years of flying high, stamp taxes took a dive – down £1.1bn on the same period last year. More generous relief will have played a part, but much of the fall is driven by housing market woes,’ said Helen Morrissey, head of retirement analysis at Hargreaves Lansdown.

‘A toxic mix of the cost of living crisis and surging mortgage rates has dampened demand in this once surging market. With interest rates on the rise and mortgage deals being taken off the table there’s little chance of seeing a bounce back in demand any time soon.’

As fiscal drag pulls more taxpayers into higher tax thresholds, the Treasury is benefiting as income tax and National Insurance contributions (NICs) receipts rise. Total tax take for April to May 2023 hit £73.7bn, which was £4.9bn higher than in the same period a year earlier. However, the figure for May alone was £57.7bn, down substantially from April’s £70.8bn although it was up on the previous May’s £52.8bn.

Tax take from income tax was £19.5bn, down on April’s figure which was distorted by payments of annual bonuses. National insurance was also down on the previous month at £13.7bn.

However, fiscal drag is in action as £3.1bn in additional tax was collected in a single month compared to May 2022.

If this was replicated across the tax year, taxpayers would pay an additional £36bn in personal taxes.

Another goldmine for the Treasury was inheritance tax which continues to affect more estates. Total tax take was £1.2bn in the first two months of the tax year, up £100m on the previous year. In May alone £609m was raised in inheritance tax, up £49m on the same time last year. The freezing of tax thresholds until 2028 means there is no respite on the horizon.

Stevie Heafford, tax partner at HW Fisher, said: ‘Last year the Chancellor decided to freeze the inheritance tax nil rate band until 2028. As a result, more people are going to find themselves caught in the inheritance tax trap. Fortunately, significant changes to pension allowances announced in the spring Budget means that there may be an opportunity for people to leave behind more to their loved ones via their pension pots.

‘From 13 April, the rate of interest on overdue IHT increased from 6.50% to 6.75% – making it even more expensive to get this tax wrong.’

The revenue raised from VAT alone was £31.7bn, which was 10% higher than a year ago, with a £3.4bn hike. The VAT take has been influenced by high levels of inflation and subsequent changes in real consumer expenditure, though it is not possible to directly disaggregate these effects, HMRC said.

Total business taxes have also increased, with overall £6.7bn raised from corporation tax, banking and oil taxes, and the digital services tax, representing a £500m hike in revenue. The tax burden on business has been steadily rising, with this month’s figure up substantially on the previous year. These figures do not reflect the 6% rise in corporation tax from 19% to 25%. May corporation tax receipts were £2.57bn, down from the previous month’s £3.9bn due to reporting deadlines.

HMRC compliance activity was down slightly with only £510m in penalties issued.