May was a good month for the Exchequer, with strong corporate tax returns the highlight.
Income tax figures have been strong thus far and May continued the trend, with year to date returns up 6.7%. A combination of higher numbers in employment and more limited wage inflation continue to push income tax receipts ahead.
Consumer spending remains strong as evidenced in the latest VAT returns, now up 8% year to date after a very strong May showing, providing further evidence of a resilient domestic economy. The indicators are that VAT receipts should remain strong for the remainder of 2024.
May is an important month for corporation tax, with some key payments in the month. With disappointing data in March, it was reassuring to see very strong figures for May, up 30% on May 2023, perhaps reflecting stronger than expected results in the pharma sector.
As the May returns will predominantly reflect full year 2024 profit estimates, this augurs well for returns later in the year. However a key caveat with any prediction of corporation tax receipts is the uncertainty caused by our reliance on such a small cohort of companies.
Overall, a good month for the Exchequer, with particular comfort gleaned from strong corporation tax returns after a disappointing March.
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