Readers Question: Where does the UK government get its money from?
UK tax revenues come from a variety of sources. The main sources of tax revenue include:
- Income tax (main tax rate is 20%)
- National Insurance (NI) – a form of income tax
- VAT (20% on most goods and services)
- Corporation tax
- Council Tax (local government)
- Business rates
- Excise duties (alcohol, cigarettes)
- Other taxes include (stamp duty, carbon tax, airport tax, inheritance tax, capital gains)
Tax revenue as a share of GDP
UK Tax revenue share 1900-2019. IFS
Most tax is collected by HM Revenue and Custom.
HM Revenue and Customs are responsible for income tax, excise duties, VAT and NI. Tax revenue at HM Treasury
However, the central government also get revenue from other sources. Public sector finances at ONS (less detailed)
Tax revenue sources 2016/17
| Value added tax VAT | 135.4 | |
| Fuel duties | 27.9 | |
| Business rates | 26.8 | |
| Stamp duty land tax | 12.4 | |
| Stamp taxes on shares | 3.7 | |
| Tobacco duties | 8.7 | |
| Alcohol duties | 11.1 | |
| Vehicle excise duties paid by businesses | 2.2 | |
| Other taxes on production | 24.6 | |
| Income tax (gross of tax credits) | 185.6 | |
| Corporation tax | 55.9 | |
| Vehicle excise duties paid by households | 3.7 | |
| Bank levy | 3.0 | |
| Television Licence fee receipts | 3.2 | |
| Misc tax inc. inheritance | 7.5 | |
| Other central government taxes | 17.4 | |
| National insurance contributions | 125.9 | |
| Council Tax | 30.4 | |
| Public Sector Interest and Dividends | 6.3 | |
| Public Sector Gross Operating Surplus | 47.2 | |
| Other Public Sector Receipts | 5.2 | |
| Public Sector Current Receipts | 726.5 | |
Source: Public sector current receipts ONS
[abridged version, I left out some obscure taxes, which raise very little.
Pie chart of tax revenue
Sources:
- Tax revenue at HM Treasury
- Public sector finances at ONS (less detailed) Dataset of tax revenue
