The UK’s contribution to the EU budget

2019 was the last full year in which the UK was a member of the European Union (EU). As a member of the EU the UK made payments, or contributions, to the EU budget. The UK also received funding, or receipts, from the EU. The EU provides funding for various agricultural, social, economic development and competitiveness programmes.

The UK received a rebate from the EU which reduced its contribution. The rebate aimed to correct the issue of the UK making relatively large net contributions to the EU.

In 2019 the UK made an estimated gross contribution (after the rebate) of £14.4 billion. The UK received £5.0 billion of public sector receipts from the EU, so the UK’s net public sector contribution to the EU was an estimated £9.4 billion.

 UK's EU budget contribution, 2019

There are different ways to measure the funds the UK receives from the EU. The above figure of £5.0 billion includes only funding allocated to UK government to manage. However, the European Commission also allocates funding directly to UK organisations, often following a competitive process. In recent years these funds have been worth around £1 billion – £2 billion to the UK. Accounting for these receipts results in the UK making an average net contribution of £7.7 billion between 2014 and 2018.

Brexit and the UK’s contribution

A financial settlement for the UK’s withdrawal

The UK and EU have some outstanding financial obligations to each other that they are settling though a ‘financial settlement’. The obligations arise out of the UK’s participation in the EU budget and broader aspects of its EU membership.

The financial settlement sets out the financial commitments that will be covered, the methodology for calculating the UK’s share and the payment schedule.

More detail is available in the Library briefing Brexit: the financial settlement.

Payments after leaving?

The UK Government wishes to participate in some EU programmes after 2020. The extent of the UK’s future participation in EU programmes and the cost involved is being discussed during negotiations over the future UK-EU relationship.

This briefing focuses on the UK’s involvement with the EU budget. The Library briefing A guide to the EU budget discusses how the EU raises and spends money. 

The UK’s net contribution shouldn’t be confused with an assessment of the overall economic benefit, or cost, to the UK of EU membership. The net contribution simply looks at the direct flows of contributions to the EU Budget from the UK and spending, or receipts, from the EU to the UK. It doesn’t, for instance, consider benefits to UK businesses from being in the EU’s single market. A number of bodies have attempted an economic cost-benefit analysis of the UK’s EU membership, some of which are discussed in section 6 of the Library’s briefing In brief: UK-EU economic relations.

The Library briefing paper Brexit deal: Economic analyses summarises findings from studies into the potential impact of Brexit on the economy over the short- and long-term.

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