UK taxes compared UK tax tool: how much government earns

Find out which taxes earn the most for HMRC. Hover over each type of tax to find out how much revenue it generates. Discover which taxes you pay and those that are paid by companies and learn about the special features of each tax.

 

The main revenue earners for the Exchequer are income tax, national insurance and VAT. These three taxes alone account for two-thirds of HMRC receipts. After this, the contribution each tax makes falls, although the sums raised are still substantial.

1. Income tax (£152bn) 

The main source of government revenue. Levied on earnings and other forms of income, such as interest from savings, above your tax-free personal allowance. Paid by 30m people (via PAYE or Self-assessment) at 20%, 40% or 45% depending on income.

2. National Insurance (£102bn)

 The second largest revenue raiser. Paid by employers, employees and the self-employed. A pre-requisite for full state pension, which currently requires 30 years National insurance contributions (rising to 35 years in 2016).    

3. VAT (£100bn) 

A tax on spending. Charged on most goods and services, but not food, books or children’s clothes. The standard rate rose from 17.5% to 20% in January 2011.  

4. Corporation tax (£41bn)

 A tax on business which still generates significant sums, despite repeated cuts in the main rate it is charged at- from 28% in 2010-11, to 24% in 2012-13 and 23% in 2013-14.  

5. Fuel duty (£26.5bn)

Hydrocarbon oil duty is charged on both petrol and diesel. Although the tax has been frozen since 2011, it still accounts for over half the price paid at the pump.

6. Tobacco duty (£9.7bn)

Increases in tobacco duty have outstripped inflation in recent years and are justified for their deterrent effect. They have also boosted the revenue’s income- contributing almost £10bn in 2012-13.

7. Stamp duty land tax (£6.9bn)

Charged on house sales over £125,000- at escalating rates depending on the property’s value. Since December 2014, stamp duty is paid in tiers. You'll pay 2% up to £250,000 and 5% on the portion up to £925,000. Between that point and £1.5 million, it’s 10% - then 12% on anything over £1.5 million. SDLT is paid by the buyer.   

8. Capital gains tax (£3.9bn)

Most capital gains tax comes from gains made on financial assets, such as shares. The next largest source is UK residential buildings (second homes). 146,000 individuals and 14,000 trusts were liable for CGT in 2011-12.  The tax is charged at 18% or 28% depending on your tax band. There is currently a £10,900 annual exemption.     

9. Wine duty (£3.5bn)

A slightly higher contributor to the Exchequer than beer. It includes alcopops as well as UK produced wine.

10. Beer duty (£3.4bn)

Charged on ale, porter, stout and shandy. Most pay ‘general beer duty’, but high strength beer is charged at a higher rate.

11. Inheritance tax (£3.1bn)

Payable on estates worth more than the ‘nil-rate band’ of £325,000. It is charged only on the ‘excess’ not the total amount. Married couples and civil partners can effectively claim a ‘double allowance’ by transferring the first partner’s unused nil-rate band. In 2012-13 IHT was by paid on 22,000 estates.   

12. Insurance premium tax (£3bn)

A tax on general insurance premiums. The standard rate is 6%. A higher rate of 20% applies to travel insurance and some warranties for domestic and electrical appliances.

13. Spirits duty (£2.9bn)

Bottles of spirits or wine must bear a UK duty stamp when intended for sale in the UK if they contain 30% ABV or more.

14. Customs duty (£2.8bn)

A tax on goods produced outside the European Union. It is only payable above a certain value. Customs duty is a percentage of total value. Average duty is 5-9%, but it ranges from 0% to 85%.

15. Air passenger duty (£2.8bn)

Air passenger duty is paid by aircraft operators who fly passenger flights from UK airports. The rate varies depending on the length of the flight.

16. Stamp duty reserve tax (£2.2bn)

Charged on electronic share transactions, SDRT is paid at a flat rate of 0.5%, based on what you pay for the shares. If you're gifted shares, you don't have to pay SDRT.

17. Petroleum revenue tax (£1.7bn)

A tax on UK oil and gas production profits. Not charged on fields given development consent on or after 16 March 1993- but payable for earlier fields. The current rate is 50%.

18. Betting and gambling taxes (£1.7bn)

Duty is charged on different forms of gambling at different rates. Gaming duty ranges from 15-50%, bingo duty is 20%, general betting duty on horse and dog racing 15%, lottery duty 12% and financial spread betting 3%.

19. Landfill tax (£1bn)

A tax on waste disposal paid by landfill operators. It is charged by weight and payable at different rates, depending on whether waste is inert or active.

20. Other taxes (£1.5bn)

  • Climate change levy (£0.6bn) - A charge on suppliers of electricity, gas and coal for use as fuels by business consumers. Also paid by electricity generators.
  • Swiss capital tax (£0.3bn) - A tax on capital held in Swiss bank accounts by UK nationals, charged under the 2012 Swiss tax treaty.  
  • Cider duty (£0.3bn) - Cider duty varies according to alcoholic strength and whether cider is still or sparkling. It also applies to perry and pear cider.
  • Aggregates levy (£0.3bn) - Aggregates Levy is a tax on the commercial exploitation of rock, sand and gravel. It is charged at the rate of £2.00 per tonne

More on this...

  • Income tax explained- how much you pay- and how
  • PAYE Tax- how tax codes work and what they mean
  • Which? tax calculator- check your tax bill for 2013-14

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