The figures arrive at a troublesome second for Ms Reeves, whose Finances on November 26, 2025 doubled down on wealth taxes
Rachel Reeves on the sidelines on the World Financial Discussion board in Davos (Picture: Getty)
Rachel Reeves has been dealt one other blow after official figures confirmed a pointy plunge in Capital Positive factors Tax receipts, undermining her technique of climbing charges to boost billions for public spending. HM Income and Customs information launched right this moment revealed CGT receipts totalled £13.646 billion in 2025, down from £14.900billion in 2024 – a fall of 8.4 %, equal to greater than £1.25billion.
The decline types a part of a persistent downward development: full-year receipts dropped from £16.93billion in 2022/23 to £14.5billion in 2023/24 and £13.06billion in 2024/25. This represents a cumulative discount of £3.87billion over three years, with the newest annual comparability displaying a £1.44 billion plunge, generally rounded to £1.4billion in headline reporting.
The figures arrive at a troublesome second for Chancellor Ms Reeves, whose Finances on November 26, 2025 doubled down on wealth taxes. It adopted her preliminary October 2024 assertion, which instantly elevated primary CGT charges to shut a reported £22 billion fiscal black gap left by the earlier administration.
The adjustments have been meant to ship substantial further income to fund Labour’s spending commitments. Nonetheless, Jason Hollands, managing director at wealth administration agency Evelyn Companions, cautioned that the information demonstrates the constraints of such aggressive tax rises.
Mr Hollands mentioned: “This marked lower in Capital Positive factors Tax receipts signifies that taxpayers are swerving this and the earlier Authorities’s crackdown on capital features by sitting tight and deferring disposals, suggesting the futility of over-taxing traders and enterprise house owners.”
He pointed to well-established behavioural responses. Mr Hollands mentioned: “The CGT information from not simply right this moment, however the previous couple of years and thru historical past, means that traders both convey ahead selections forward of anticipated adjustments or are deterred from crystallising features afterwards, or each.”
He added: “This exposes the difficulty with rising the CGT burden: traders will change their plans and behavior accordingly to keep away from paying tax the place they really feel it’s too excessive. In lots of circumstances, a extra aggressive tax surroundings results in decrease quite than increased revenues.”
Mr Hollands singled out the earlier authorities’s determination to slash the CGT annual exemption from £12,300 in 2022/23 to simply £3,000 in 2024/25.
He mentioned: “Buyers—and CGT receipts—have had time to soak up the slashing of the CGT annual exemption… Certain sufficient, the receipts information reveals little or no profit to the Treasury coffers from this step.”
He continued: “Closing income information reveals that CGT introduced in £16.93billion in 2022/23, £14.5billion in 2023/24 and simply £13.06 billion in 2024/25—and these newest receipts figures recommend that downward development may proceed.”
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Mr Hollands added: “The one vital consequence is prone to have been distorting and disincentivising results on funding and enterprise selections.”
Consideration will now flip to the remaining months of the present tax yr, as the complete results of Ms Reeves’ fee will increase start to filter by. Whereas features on non-exempt property should be reported and tax paid inside 60 days of completion, disposals of shares and different belongings are sometimes declared later by way of self-assessment returns.
Mr Hollands famous: “January and February 2026 would be the key months to look at.”
He warned: “In abstract, the information doesn’t bode nicely for the Chancellor’s hopes that her CGT fee hikes will bolster the general public purse over the approaching years.”
Mr Hollands delivered a broader warning about additional escalation.
He mentioned: “Whereas taxing traders extra closely on features from capital they’ve put in danger doesn’t appear to work as a income raiser, what it does threat is discouraging entrepreneurialism and funding, which the nation wants to spice up development.”
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He concluded: “Any future transfer to convey CGT charges nearer to earnings tax charges—a transfer supported by some MPs on the left—can be deeply unwise, performing as a drag on funding, enterprise exercise and development, but in addition failing to herald vital new revenues.”
The Treasury has thus far declined to touch upon the newest figures. The drop in receipts is prone to gasoline renewed debate over whether or not increased CGT levies can ship the promised windfall or as an alternative threat stifling the funding wanted for financial restoration.
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