How much tax do British people pay?

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How much tax do British people pay?

Their plans matter because tax underpins everything the government does. The money raised is spent on everything from schools to the NHS.

So, where does the UK get most of its money? And how does it compare with other countries?

How much tax are people paying?

The amount of money the UK government collects through taxes is at a historical high.

UK tax revenues as a share of national income – the total amount of money the country earns – are at their highest level since the 1940s.

 

 

The taxes that many of us are most aware of our income tax and National Insurance contributions (NICs).

These are the sums of money on a payslip that never reach our bank account, along with pension contributions or student loan repayments.

Together, they bring in just under half of all taxes collected in the UK.

The taxes that many of us are most aware of our income tax and National Insurance contributions (NICs).

These are the sums of money on a payslip that never reach our bank account, along with pension contributions or student loan repayments.

Together, they bring in just under half of all taxes collected in the UK.

How much tax is deducted from your income depends on how much you earn. Those on higher salaries pay a higher share of their income in tax.

An employee earning £28,000 – a middle-income earner in the UK – will pay nearly £6,000 in income tax and NICs. On top of this, their employer has to pay nearly £3,000 in employer NICs.

Overall, that means that about 28% of the cost of employing them ends up in the hands of the government.

Half of the cost of employing someone on £340,000 – 10 times higher than the average full-time UK employee – goes on tax.

What other taxes does the government collect?

The amount the UK raises from other taxes is like that of other developed countries.

For example, VAT – the 20% tax charged when we buy many goods and services – is close to levels seen elsewhere. The same goes for corporation tax – the 19% charged on businesses’ profits.

Income tax, social security contributions, and VAT bring in the most revenue in all developed countries.

They typically account for more than 70% of total government income from taxes.

Source: BBC News