Income tax and National Insurance contributions (NICs) paid through wages reached a record high of £52.5bn in April, marking a £4.7bn year-on-year increase, HMRC has revealed.

In total, income tax and NICs reached £87.3bn in April, rising by £6.3bn compared to the same period last year.

HMRC stated that the latest receipts in April largely related to March liabilities.

Head of personal finance at AJ Bell, Sarah Coles, described the latest figure as "eye-watering", after income tax bills have continued to climb since thresholds were frozen in 2021/22.

She said: "The fact that thresholds are set to stay until at least 2031 means there’s more tax agony on the way. And it doesn’t stop with wages, because when we cross a threshold, the rate of tax we pay on savings and investments returns rises too – and the allowance for savings falls. It means taxpayers are handing over yet more of their investments and savings income and gains.

"The taxman has been tightening the grip on our savings and investments for years, and things are set to get worse. It’s bad enough that the dividend and capital gains tax allowances have fallen, but the rates on both taxes have climbed in recent years as well. From next April, the income tax payable on savings interest and property income will also increase by two percentage points."

Senior personal finance analyst at Hargreaves Lansdown, Claire Stinton, added that the latest data shows that fiscal drag is "silently doing what the Government hoped it would".

She concluded: "With income tax thresholds frozen, more people will be pulled into higher tax brackets so a bonus, promotion, or job change could leave you paying more tax than you expected. Beware, moving up an income tax band doesn’t just affect the income tax you pay, it can reduce tax-free allowances and hike up other tax rates including tax on savings interest, dividends and capital gains.

"The good news? Proactive planning can help you keep more money in your pocket. It’s never been more important to keep an eye on your total income, paying money into your pension can help you keep more of what you earn and stay below tax thresholds. Using your ISA to shelter savings and investments will also reduce your tax bill."

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