- Last Updated: 08 January 2021
How does the UK raise its taxes? How does the UK spend its tax revenue? Which taxes raise the most revenue?
HM Treasury has opened a portal for Budget representations ahead of Budget 2021 and we thought that this summary might provide some 'food for thought'.
Tax yield by tax
This table has been compiled from data supplied by HMRC and Office of National Statistics.
Financial Year |
2019-20 £m |
% |
2018-19 £m |
% |
Income Tax (IT) | 193,243 | 28.9% | 191,031 | 29.2% |
PAYE Income Tax (included in IT) | 164,841 | 161,909 | ||
SA Income Tax (included in IT) | 32,185 | 31,518 | ||
National Insurance Contributions | 142,871 | 21.4% | 136,646 | 20.9% |
Capital Gains Tax | 9,826 | 1.5% | 9,197 | 1.4% |
Apprenticeship Levy | 2,798 | 0.4% | 2,713 | 0.4% |
Value Added Tax | 129,885 | 19.4% | 132,177 | 20.2% |
Corporation Tax (CT) | 61,106 | 9.1% | 54,272 | 8.3% |
Offshore (included in CT) | 1,274 | 1,912 | ||
Bank Levy | 2,472 | 0.4% | 2,565 | 0.4% |
Bank Surcharge | 1,978 | 0.3% | 1,904 | 0.3% |
Diverted Profits Tax | 5 | 0.0% | 12 | 0.0% |
Petroleum Revenue Tax | - 408 | -0.1% | - 744 | -0.1% |
Hydrocarbon Oil (Fuel duties) | 27,573 | 4.1% | 27,993 | 4.3% |
Inheritance Tax | 5,122 | 0.8% | 5,359 | 0.8% |
Stamp Duty Shares | 3,619 | 0.5% | 3,620 | 0.6% |
Stamp Duty Land Tax | 11,601 | 1.7% | 11,942 | 1.8% |
Annual Tax on Enveloped Dwellings | 128 | 0.0% | 139 | 0.0% |
Tobacco duties | 8,804 | 1.3% | 9,290 | 1.4% |
Spirits duties | 3,825 | 0.6% | 3,779 | 0.6% |
Beer duties | 3,446 | 0.5% | 3,661 | 0.6% |
Wines duties | 4,296 | 0.6% | 4,392 | 0.7% |
Cider duties | 270 | 0.0% | 279 | 0.0% |
Betting & Gaming | 3,019 | 0.5% | 2,985 | 0.5% |
Air Passenger Duty | 3,641 | 0.5% | 3,636 | 0.6% |
Insurance Premium Tax | 6,415 | 1.0% | 6,197 | 0.9% |
Landfill Tax | 641 | 0.1% | 683 | 0.1% |
Climate Change Levy | 2,004 | 0.3% | 1,922 | 0.3% |
Aggregates Levy | 397 | 0.1% | 367 | 0.1% |
Soft Drinks Industry Levy | 337 | 0.1% | 240 | 0.0% |
Swiss Capital Tax | - | 0.0% | - 1 | 0.0% |
Customs Duties | 3,287 | 0.5% | 3,356 | 0.5% |
Penalties | 641 | 0.1% | 720 | 0.1% |
Collected by HMRC
|
632,842
|
620,330
|
||
Council tax | 36,241 | 5.4% | 34,831 | 5.3% |
Business rates * | ? | ? | ? | ? |
Total taxes | 669,083 | 100% | 655,163 | 100% |
*Business rates gross about £24,000m. These are only paid by businesses with business premises that do not currently qualify for small business rate relief and therefore if included in the above totals, they would account for roughly 3.5% of tax revenue. At Spring Statement 2018 the Chancellor announced that the next revaluation would be brought forward by one year to 2021, 4 years after the last revaluation. Valuation is proposed to be based on market rental values at 1 April 2019.
How taxes are spent
How are our taxes spent by government?
This summary is compiled from the data provided to taxpayers in their individual tax accounts by HMRC. It shows the expenditure as a percentage of taxes collected by HMRC.
A summary of taxes collected by HMRC is on the previous tab.
This is for the years before the UK felt the full effects of the Coronavirus pandemic.
2019-20 | 2018-19 | 2017-18 | 2016-17 | |
---|---|---|---|---|
Description | % | % | % | % |
Welfare | 22.1 | 23.5 | 23.8 | 24.3 |
Health | 20.5 | 20.2 | 19.9 | 20.3 |
State Pensions | 12.4 | 12.8 | 12.8 | 12.9 |
Education | 11.6 | 11.8 | 12 | 12.3 |
Defence | 5.3 | 5.3 | 5.3 | 5.2 |
National Debt Interest | 6.9 | 5.1 | 6.1 | 5.5 |
Transport | 4.3 | 4.3 | 4.3 | 4.2 |
Public Order and Safety | 4.3 | 4.3 | 4.3 | 4.2 |
Business and Industry | 3.8 | 3.6 | 2.9 | 2.5 |
Government Administration | 2.1 | 2.1 | 2.1 | 2.1 |
Housing and Utilities, like street lighting | 1.8 | 1.6 | 1.6 | 1.5 |
Environment | 1.5 | 1.5 | 1.6 | 1.6 |
Culture, like sports, libraries, museums | 1.5 | 1.5 | 1.6 | 1.6 |
Overseas Aid | 1.1 | 1.2 | 1.2 | 1.1 |
UK Contribution to the EU Budget | .8 | 1 | .7 | .7 |
Total* | 100 | 100 | 100 | 100 |
Council expenditure out of council tax ** | ||||
Council expenditure out of business rates *** |
* rounding means that these are not 100%
**Council tax is not collected by HMRC and so it does not analyse how it is spent. A summary is supplied by your local council.
***Business rates are not collected by HMRC but are redistributed to councils.
Sources
By way of a simplistic explanation of the figures and data sources:
- The Office of National Statistics (ONS) is in charge of collecting and analysing data on the UK's public finances.
- HM Revenue & Customs (HMRC) provides its own data on the taxes it administers and collects to the ONS and it also publishes it in limited form for taxpayers.
- The Office of Budget Responsibility (OBR) analyses the data to check that the government is on track with its promises, and chancellor uses the OBR data in setting the Budget.
Taxpayer business account summary (login in to your account)
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