Tax statistics: an overview

In 2022/23, UK government raised over £1,017 billion in receipts – income from taxes and other sources. This is equivalent to around 40% of the size of the UK economy, as measured by GDP, which is the highest level since the 1980s. Most receipts come from three main sources: income tax, National Insurance contributions (NICs) and value added tax (VAT). Together they raised around £586 billion in 2022/23.

Recent trends

Between 2007/08 and 2009/10 receipts fell by around 1% of GDP, following the financial crisis and recession of 2008 and 2009. Receipts have since increased and have exceeded 36.6% of GDP in each year from 2010/11. Receipts were last consistently above this level in the mid-1980s. They are forecast to rise further in the coming years.

Receipts from VAT and NICs are larger now, relative to the size of the economy than they were in 1999/00. Corporation tax receipts are around their 1999/00 level. Before the pandemic, income tax receipts were smaller than they were in 1999/00, but they are now larger.

Since the late 1990s receipts from stamp duty on property transactions, capital gains tax and council tax have all grown noticeably faster than the economy. Fuel duties and tobacco duties have declined.

Coronavirus: impact on receipts

Receipts were particularly affected by the coronavirus pandemic in 2020/21. In aggregate, receipts fell as there was less economic activity and because the government gave tax breaks to support the economy. However, the economy shrank to a greater extent than receipts, so receipts became larger relative to the size of the economy in 2020/21.

The financial support that the government provided to protect household incomes – such as the furlough scheme – and support businesses – such as grants – also supported some tax revenues.

While individual taxes were affected in different ways by the pandemic in 2021/22, total receipts increased and were larger than forecast pre-pandemic.

Individual taxpayers: income tax paid, by income

Income tax payments are concentrated amongst those with the largest incomes. The 10% of income taxpayers with the largest incomes contribute over 60% of income tax receipts.

Households: taxes paid, by income

The Institute for Fiscal Studies (IFS) – an economic think tank – has analysed how much households pay in tax. Their analysis – which covers around three quarters of tax revenues (including income tax, NICs, VAT, excise duties and council tax) – found that, in 2017/18, the 50% of households with the largest incomes contributed around 78% of taxes.

Impact of taxes across the income distribution

Overall, direct taxes (which include income tax, NICs and council tax) lower income inequality. Richer individuals pay a greater share of their gross household income in direct taxes compared with poorer individuals. Council tax limits the extent to which direct taxes reduce income inequality.

Measured relative to household income, those with lower incomes pay more in indirect taxes (VAT, duties and so forth). Measured relative to household spending, there is little variation in indirect taxes across the income distribution.