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HMRC may introduce new taxes on anything it thinks is "unhealthy" or "polluting" as sin tax receipts plunge. HMRC’s takings from ‘sin taxes’ have fallen by 35 per cent over the past decade to £24.2bn or 2.8 per cent of its total revenues in 2024/25. That is versus 4.3 per cent in 2015/16, according to research from UHY Hacker Young, the national accountancy firm. Falling takings from sin taxes could prompt the Labour Party government to increase existing rates or even introduce new levies, as it seeks to close its budget gap. James Simmonds, Tax Partner at UHY Hacker Young, says: “Traditional sin taxes now collect a small and shrinking slice of the pie for Government coffers, a gap that Rachel Reeves may look to fill with further rises.” READ MORE Thousands of Blue Badge holders issued update over free bus travel UHY Hacker Young says the gambling industry may be a key target for potential tax rises, given the taxes it paid increased 7% to £3.6bn in the last year, up from £3.4bn. Simmonds says: “It has been widely rumoured that bigger taxes will come, especially those aimed at the gambling industry, which some politicians argue have been undertaxed.” Simmonds says: “The Government may seek to include new taxes on products it deems ‘unhealthy’ or ‘polluting’, but it could also raise existing taxes on sugary drinks and plastic packaging. Given how little revenue they bring in, the Government may feel there’s still room to push them up.” “The sheer number of different taxes — many with complex, sliding structures — harms business confidence. How are companies supposed to know which products will be added to the blacklist next?” Simmonds says. It comes amid speculation that the chancellor is considering a tax increase worth up to £3.2bn on sports betting to help to close a potential £30bn shortfall in the public finances. A Treasury spokesperson said: “We do not comment on speculation around future changes to tax policy.”
