afterax

UK budget

UK tax receipts & public spending · 2024/25

How £1.13 trillion comes in. How £1.29 trillion goes out.

The UK government had £1135bn of current receipts (£905bn from tax + £230bn from non-tax sources) and spent £1292bn on public services in 2024/25. The £157bn gap is the budget deficit, financed by issuing government debt. That borrowing is why debt interest now ranks as the fourth-largest spending line.

Tax receipts

£905bn

HMRC + local councils

Non-tax revenue

£230bn

surplus, fees, dividends

Total spending

£1292bn

2024/25 TME

Deficit (PSNB)

£157bn

financed by borrowing

Where the money comes from

2024/25 receipts · £905bn total

Income tax, National Insurance and VAT alone raise £642bn, about 71% of all UK tax. Add corporation tax and the four largest taxes account for £4 in every £5 collected.

  • Income taxHMRC£298.0bn32.9%

    PAYE plus Self Assessment. The single largest tax in the UK by yield, accounting for roughly £1 in every £3 of receipts.

  • National InsuranceHMRC£175.0bn19.3%

    Class 1 (employee + employer), Class 2 and 4 (self-employed). Down from earlier years after the 2024 rate cuts. Employer NIC rose again from April 2025.

  • VATHMRC£169.0bn18.7%

    Standard rate 20%, reduced 5%, zero rate. Registered businesses with turnover above £90,000 must charge it.

  • Corporation taxHMRC£96.0bn10.6%

    Main rate 25% (since April 2023), small profits rate 19% under £50k. Includes the bank surcharge.

  • Council taxLocal councils£50.0bn5.5%

    Collected by local authorities, not HMRC. Funds local services like adult social care, refuse, libraries and parks.

  • Business ratesLocal councils£28.0bn3.1%

    Tax on commercial property (non-domestic rates). Collected locally, partly retained by councils, partly redistributed.

  • Fuel dutyHMRC£25.0bn2.8%

    Excise duty on petrol, diesel and other hydrocarbon oils. Frozen since 2011 (with a temporary 5p cut from March 2022).

  • Capital gains taxHMRC£13.0bn1.4%

    Tax on profits from selling assets (shares, second properties, crypto, business interests). Rates rose to 18%/24% from October 2024.

  • Alcohol dutyHMRC£13.0bn1.4%

    Duty on beer, cider, wine, spirits. Rates linked to alcoholic strength since the August 2023 reform.

  • Stamp duty (SDLT)HMRC£12.0bn1.3%

    Stamp Duty Land Tax on residential and commercial property purchases in England and NI. Scotland (LBTT) and Wales (LTT) collect their own equivalents separately.

  • Insurance Premium TaxHMRC£9.0bn1.0%

    Tax on most general insurance premiums. Standard rate 12%; higher rate 20% on travel insurance and certain warranties.

  • Tobacco dutyHMRC£8.5bn0.9%

    Excise duty on cigarettes, hand-rolling tobacco, cigars. Receipts have been declining as smoking rates fall.

  • Inheritance taxHMRC£8.2bn0.9%

    40% on estates above the £325,000 Nil-Rate Band, with a £175,000 residence allowance for homes left to direct descendants. Affects roughly 4-5% of estates.

  • Vehicle excise dutyHMRC£8.0bn0.9%

    Annual road tax. From April 2025 even electric vehicles pay VED, ending a long-standing exemption.

  • Customs dutiesHMRC£5.5bn0.6%

    Tariffs on goods imported from outside the UK Global Tariff schedule. Substantially smaller post-Brexit than EU customs receipts used to be.

  • Air Passenger DutyHMRC£4.5bn0.5%

    Per-passenger duty on flights departing UK airports. Banded by destination distance and class of travel.

  • Apprenticeship levyHMRC£3.8bn0.4%

    0.5% levy on the pay bill of employers with paybill over £3m, used to fund apprenticeship training.

  • Bank levy & surchargeHMRC£3.5bn0.4%

    Bank Levy on UK bank balance sheets plus a 3% Bank Surcharge on profits above £100m. Both stack on top of standard corporation tax.

  • Environmental taxesHMRC£4.0bn0.4%

    Climate Change Levy, Landfill Tax, Aggregates Levy, Plastic Packaging Tax and the UK Emissions Trading Scheme combined.

  • Other receiptsHMRC£71.0bn7.8%

    Smaller HMRC duties and miscellaneous receipts: betting and gaming, soft drinks levy, residual oil and gas levies, bank-asset-management fees, EU exit residuals and other items.

Source:

HMRC tax & NIC receipts annual bulletin ↗·Commons Library CBP-8513 ↗

Plus non-tax revenue

2024/25 · £230bn total

The government also has substantial non-tax income: state-owned trading operations, interest and dividends on investments, and departmental fees. Together with tax receipts this brings total current receipts to £1135bn.

  • Operating surplus & imputed rentals£95.0bn41.3%

    Net income from state-owned and trading operations (NHS trading, Land Registry, Crown Estate, Bank of England transfers, BBC commercial), plus the imputed rental value of government-occupied property under national-accounts conventions.

  • Interest & dividends received£40.0bn17.4%

    Investment income across the public sector, including Bank of England transfers from the quantitative easing portfolio and dividends from publicly-owned shareholdings.

  • Sales, fees, fines, licences£95.0bn41.3%

    Government departmental sales (passport fees, court fees, civil penalties, NHS prescription charges, trading income, residual EU receipts) plus regulator fees and licence revenue.

Source:

ONS Public Sector Finances ↗

Where the money goes

2024/25 outturns · £1292bn total

Welfare and health are nearly tied at the top, each taking around 21%. Together they account for more than £500bn, about £7,500 per UK adult per year.

  • Welfare£275.2bn21.3%

    Per-capita weekly welfare spend: £246.1bn (PESA 2025, Social Protection excl. state pensions) ÷ 67.6M UK population ÷ 52 weeks ≈ £70/week. This is not a Universal Credit claimant's entitlement; the standard allowance for a single adult 25+ is ~£92/week.

  • Health£270.0bn20.9%

    Per-citizen daily NHS spend: £241.8bn (PESA 2025, Health) ÷ 67.6M ÷ 365 ≈ £9.80/day. The average national contribution per person per day, not the cost of any specific treatment.

  • State Pensions£153.7bn11.9%

    New State Pension full rate, 2026/27: £241.05/week (4.7% triple-lock increase from April 2026). HMRC sources the £137.8bn pensions outturn from OBR March 2025.

  • National Debt Interest£139.5bn10.8%

    £124.7bn in 2024/25 of interest on UK government gilts. Rose sharply from 2022 with higher interest rates and inflation-linked gilts. Now larger than the entire defence budget.

  • Education£133.1bn10.3%

    DfE per-pupil revenue funding (~£7,400/year for state schools) ÷ 195 school days ≈ £38/day. A blended primary/secondary average. Total education spend in HMRC's category (£118.7bn) also covers higher education, further education, and early years.

  • Defence£71.1bn5.5%

    £63.6bn in 2024/25. UK defence spending is committed to rise from ~2.3% of GDP toward 2.5% by 2027.

  • Public Order & Safety£56.8bn4.4%

    £51.4bn covering Home Office police grants, Ministry of Justice, courts, prisons, fire and rescue.

  • Transport£51.7bn4.0%

    £46.4bn DfT total: rail subsidy, road maintenance, local transport grants, active travel. Excludes business/industry economic-affairs spending.

  • Business & Industry£45.2bn3.5%

    £40.4bn of economic affairs excluding transport. Includes UKRI research councils, business support, energy and trade.

  • Government Administration£25.8bn2.0%

    £23.0bn for the running costs of central government departments (excluding EU settlement payments).

  • Housing and Utilities£24.5bn1.9%

    £22.3bn covering affordable housing programmes, water and utilities subsidy, and community amenities.

  • Environment£19.4bn1.5%

    £17.1bn through Defra: agriculture support, flood defences, environmental protection, climate.

  • Culture£16.8bn1.3%

    £14.5bn through DCMS: arts funding, sport, broadcasting (excluding BBC licence fee), heritage.

  • Overseas Aid£9.0bn0.7%

    £7.7bn of UK official development assistance (ODA), down from 0.7% to 0.5% of gross national income in recent years.

  • Outstanding EU Payments£1.3bn0.1%

    £0.7bn in residual EU Financial Settlement payments still owed under the Brexit withdrawal agreement.

Source:

HMRC Annual Tax Summary methodology ↗

Three things to notice

Three taxes raise most of the money. Income tax, National Insurance and VAT together bring in roughly £642bn. The other 17 taxes combined add about £263bn. Anyone proposing "cuts" without touching these three is moving very small amounts.

Spending exceeds receipts.Total current receipts are about £1,135bn (£905bn tax + £230bn non-tax) against £1,292bn of spending. The £157bn gap is the deficit, financed by borrowing and accumulating into the national debt. As that debt grows and interest rates rise, debt servicing crowds out other spending; it's now the fourth-largest line, ahead of defence, transport and police combined.

State pensions exceed education.The state pension alone (£137.8bn / 11.9% of spending) is more than total spending on education (£118.7bn / 9% of spending). Welfare in HMRC's table excludes pensions, which are reported separately because they're contributory.

See your share

How does your tax bill split across these categories?

Enter your salary in the income-tax calculator. The same 15 spending categories applied to your personal tax bill, with tangible units like school days and weeks of state pension.

Calculate your share →

Sources & methodology

  • Tax receipts: HMRC Tax and NICs receipts (annual bulletin); council tax and business rates from MHCLG. Cross-referenced with House of Commons Library CBP-8513 "Tax statistics: an overview".
  • Non-tax revenue and deficit: ONS Public Sector Finances bulletin. Non-tax revenue components are best-effort approximations of operating surplus, interest and dividends, and departmental sales/fees totalling ~£230bn.
  • Public spending: HMRC Annual Tax Summary 2024/25 methodology (published 4 March 2026), based on HM Treasury PESA 2025 (Table 5.2) and OBR Economic and Fiscal Outlook, March 2025.
  • State pension rate: gov.uk benefit and pension rates 2026/27 (April 2026 triple-lock uprating).
  • Last reviewed 2026-04-29. Some receipts figures (council tax, business rates, minor duties) are approximations; verify against the linked sources before quoting. Shares may not sum to exactly 100% due to rounding.