GOVERNMENT SOURCES OF TAXATION (UK)

Estimate 2024/2025

Total government revenue: £1,057.6bn (100%)

• Income tax (gross of tax credits): £268.0bn (25.6%)
• National Insurance contributions (NICs): £172.3bn (16.4%)
• Value added tax (VAT): £162.2bn (15.5%)
   
• Other indirect taxes: £93.4bn (8.8%)
  • Fuel duties: £24.3bn (2.3%)
  • Alcohol duties: £13.1bn (1.2%)
  • Tobacco duties: £10.4bn (1.0%)
  • Vehicle excise duties: £8.1bn (0.8%)
  • Environmental levies: £7.6bn (0.7%)
  • Insurance premium tax: £7.6bn (0.7%)
  • ETS auction receipts: £6.2bn (0.6%)
  • Customs duties and levies: £5.3bn (0.5%)
  • Air passenger duty: £3.8bn (0.4%)
  • Betting and gaming duties: £3.5bn (0.3%)
  • Climate change levy: £1.9bn (0.2%)
  • Landfill tax: £0.8bn (0.1%)
  • Aggregates levy: £0.4bn (0.0%)
  • Soft drinks industry levy: £0.4bn (0.0%)
     
• Capital taxes: £41.8bn (4.0%)
  • Capital gains tax: £17.8bn (1.7%)
  • Stamp duties: £16.8bn (1.6%)
  • Inheritance tax: £7.2bn (0.7%)
     
• Company taxes: £101.0bn (9.5%)
  • Corporation tax: £85.2bn (8.1%)
  • Energy profits levy: £5.6bn (0.5%)
  • Apprenticeship levy: £3.7bn (0.3%)
  • Electricity generator levy: £3.5bn (0.3%)
  • Bank levy: £1.3bn (0.1%)
  • Bank surcharge: £1.2bn (0.1%)
  • Digital services tax: £0.7bn (0.1%)
  • Diverted profits tax: –£0.1bn (0.0%)
  • Petroleum revenue tax: –£0.2bn (0.0%)
     
• Council tax & business rates: £74.3bn (7.0%)
  • Council tax: £44.4bn (4.2%)
  • Business rates: £29.9bn (2.8%)
     
• Other taxes: £37.6bn (3.6%)
  • VAT refunds: £25.1bn (2.4%)
  • Licence fee receipts: £3.7bn (0.4%)
  • Other small taxes: £8.8bn (0.8%)
     

Total taxes: £950.5bn (89.9%)

• Non-tax receipts: £107.1bn (10.1%)
  • Gross operating surplus: £64.4bn (6.1%)
  • Interest and dividends: £40.5bn (3.8%)
  • Other receipts and adjustments: £2.1bn (0.2%)

2024 / 2025

The UK government is expected to raise about £1.14 trillion in taxes in 2024-25, while spending around £1.28 trillion. That leaves a deficit of roughly £137 billion, which must be borrowed.

Debt interest costs are projected at about £105 billion this year. This is equivalent to covering the entire defence budget, with money left over for another major department.

The effective average interest rate on government debt in 2024-25 is around 4%, reflecting the higher rates on newly issued gilts compared with older, cheaper debt.