In 2025/26, the government of the United Kingdom is expected to receive 1.2 trillion British pounds of public sector current receipts, with 329 billion British pounds coming from income tax, as well as 214 billion pounds from VAT. Other substantial sources of income include Corporation Tax, predicted to raise 105 billion pounds, and Council Tax, which will raise around 50 billion pounds. Government revenue falls short of spending Overall government revenue in 2023/24 amounted to approximately 1.13 trillion pounds, but with the government spending around 1.28 trillion pounds, the UK borrowed almost 152 billion pounds to cover its costs. As a consequence, the UK's national debt increased from 2.69 trillion pounds in 2022/23, to 2.81 trillion pounds in 2023/24, almost 100 per cent of GDP. Financing this debt is becoming increasingly burdensome for UK government finances, with the UK spending more on debt interest than on defence, transport, and public order and safety. Impact of COVID-19 on revenue sources Income received from some of the UK's typical revenue sources were severely depleted at the height of the COVID-19 pandemic. In 2018/19, for example, VAT raised around 132.5 billion pounds, with receipts falling to 129.9 billion pounds in 2019/20, and just 101.7 billion pounds in 2020/21. Corporation Tax, fell from 61.6 billion pounds in 2019/20, to 50.5 billion pounds in 2020/21, while revenue from Air Passenger Duties declined from 3.64 billion pounds in 2019/20, to just 590 million pounds in 2020/21, and just over one billion pounds in 2021/22.

This statistic shows the government revenue and spending in the United Kingdom from 2020 to 2024, with projections up until 2030. In 2024, the government revenue in the United Kingdom amounted to around 1,091.68 billion pounds, while government spending came to around 1,255.57 billion pounds.

The United Kingdom's government revenue was just over 1.13 trillion British pounds in 2024/25, compared with just under 1.1 trillion in 2023/24.

In 2024/25, income tax accounted for 10.5 percent of gross domestic product in the United Kingdom, the largest tax as a share of GDP in this financial year. Throughout this time period, income tax has accounted for the highest share of GDP among UK taxes, followed by VAT and National Insurance Tax being the second-largest tax, depending on the relevant year. What does the government spend this on? For the 2025/26 fiscal year, the UK government expects to spend around 379 billion British pounds on social protection, which includes spending on pensions and welfare. The budget for health spending is 277 billion pounds, followed by 146 billion pounds on education. Since the 1980s, the share of GDP the UK spends on health has increased substantially, growing from four percent in 1984/85, to seven percent before the COVID-19 pandemic. By contrast, spending on defence fell from 4.6 percent of GDP to just 1.8 percent in the same time period. Debt approaching 100 percent of GPD The fourth-largest spending category in the latest UK government budget was that of debt interest, at a substantial 126 billion pounds. After taking a significant economic hit during the COVID-19 pandemic, the UK's government debt increased from around 80 percent of GDP, to almost 97 percent in one fiscal year. Although that debt is not expected to increase further in the coming years, the costs of financing that debt has put immense pressure on government finances, especially with rising borrowing costs.

In 2025/26, the budgeted expenditure of the United Kingdom government is expected to be reach 1,335 billion British pounds, with the highest spending function being the 379 billion pounds expected to be spent on social protection, which includes pensions and other welfare benefits. Government spending on health was expected to be 277 billion pounds and was the second-highest spending function in this fiscal year, while education was the third-highest spending category at 146 billion pounds. UK government debt approaching 100 percent of GDP At the end of the 2024/25 financial year, the UK's government debt amounted to approximately 2.8 trillion British pounds, around 96 percent of GDP that year. This is due to the UK having to borrow money to cover its spending commitments, especially at the height of the COVID-19 pandemic, when this deficit amounted to 314.6 billion pounds. Without significant cuts to spending or tax rises, the current government is aiming to reduce this debt by creating a stronger, more productive economy. Though this is how Britain's post WW2 debt was reduced, the country faces far more structural problems to growth than it did in the mid 20th century. Income Tax the UK's main revenue source Income Tax is expected to raise approximately 329 billion British pounds in the 2025/26 financial year, and be the largest revenue source for the government that year. Value Added Tax (VAT) receipts are expected to raise 214 billion pounds, with National Insurance contributions reaching 199 billion pounds. Although National Insurance rates for employees has actually fallen recently, the rate which employers pay was one of the main tax rises announced in the Autumn 2024 budget, rising from 13.8 percent to 15 percent. Though this avoided raising tax for workers directly, many UK businesses were critical of the move, with taxation seen as the main issue facing them at the start of 2025.

In 2024/25 the value of tax receipts for the United Kingdom amounted to approximately 840 billion British pounds. Tax receipts form the bulk of UK government income, based on various direct and indirect taxes. Although tax income has gradually increased throughout most of this period, there is a noticeable dip in 2020 due to the COVID-19 pandemic. Tax revenue sources Of the revenue generated by taxation in 2024/25, over 301 billion of this came from Income Tax receipts, which was the main source of direct tax income for the government. After income tax, the next most substantial direct tax were contributions from National Insurance, which amounted to just over 172.5 billion pounds of tax revenue. The UK's main goods and services tax; Value-added Tax (VAT) amounted to 170.6 billion pounds, while Corporation Tax receipts raised 91.6 billion pounds. Although other smaller direct and indirect taxes produce notable income, these four sources were by far the main sources of income in the previous financial year. UK government finances While taxes and other sources of income raised more than 1.13 trillion pounds in 2024/25, the UK government expenditure was around 1.28 trillion pounds. This gap between revenue and expenditure was financed via government borrowing, which amounted to almost 152 billion pounds. As the UK government has been spending more than it earns for several years, this has resulted in a significant government debt of 2.8 trillion pounds building up, the equivalent of just under 96 percent of GDP in 2024/25.

UK: EU Budget: Revenue: Own Resources: National Contribution data was reported at 13,460.493 EUR mn in 2016. This records a decrease from the previous number of 18,209.421 EUR mn for 2015. UK: EU Budget: Revenue: Own Resources: National Contribution data is updated yearly, averaging 11,743.712 EUR mn from Dec 2007 (Median) to 2016, with 10 observations. The data reached an all-time high of 18,209.421 EUR mn in 2015 and a record low of 7,613.808 EUR mn in 2008. UK: EU Budget: Revenue: Own Resources: National Contribution data remains active status in CEIC and is reported by Financial Programming and Budget. The data is categorized under Global Database’s UK – Table UK.DG Financial Programming and Budget: European Union Budget.

Statistics and commentary which give an insight into the standard of living of the household population in Great Britain, focusing on the lower part of income distribution. http://webarchive.nationalarchives.gov.uk/+/http://research.dwp.gov.uk/asd/hbai.asp https://www.gov.uk/government/collections/households-below-average-income-hbai--2 Source agency: Work and Pensions Designation: National Statistics Language: English Alternative title: Households Below Average Income

This analysis, produced by the Office for National Statistics (ONS), examines how taxes and benefits redistribute income between various groups of households in the United Kingdom. It shows where different types of households and individuals are in the income distribution and looks at the changing levels of income inequality over time. The main sources of data for this study are:

• Family Expenditure Survey (FES) from 1977-2001
• Expenditure and Food Survey (EFS) from 2001-2007
• Living Costs and Food Survey (LCF) from 2008 to 2017
• Household Finances Survey (HFS) from 2018 onwards
  

Some variables have been created by combining data from the LCF (previously FES or EFS) with control totals from a variety of different government sources, including:

• United Kingdom National Accounts (ONS Blue Book)
• HM Revenue and Customs (HMRC)
• Department for Transport (DfT)
• Department of Health (DH)
• Department for Education and Employment (DfEE)
• Department for Communities and Local Government (DCLG)

For further information, see the ONS Effects of taxes and benefits on household income webpage.

Users should note that the combined ETB household (1977-2021) and person (2018-2021) datasets replace all previous individual year files, which have been withdrawn from use at the depositor's request.

Latest edition information

For the fourth edition (December 2025), replacement data and documentation for 2022 and 2023, and new data/documentation for 2024 were added to the study.

Method of Data Collection

The ETB has been produced each year since 1961 and is an annual analysis looking at how taxes and benefits affect the income of households in the UK.

Since 2018, the estimates in this analysis are based on data derived from the HFS Survey (the HCF is not currently held by the UK Data Service). The HFS is an annual survey of the expenditure and income of private households. People living in hotels, lodging houses, and in institutions such as old people's homes are excluded. Each person aged 16 and over keeps a full record of payments made during 14 consecutive days and answers questions about hire purchase and other payments; children aged 7 to 15 keep a simplified diary. The respondents also give detailed information, where appropriate, about income (including cash benefits received from the state) and payments of Income Tax. Information on age, occupation, education received, family composition and housing tenure is also obtained. The survey is continuous, interviews being spread evenly over the year to ensure that seasonal effects are covered. The Family Spending publication also includes an outline of the survey design.

The HFS data used in this analysis are grossed so that totals reflect the total population of private households in the UK. The weights are produced in two stages. First, the data are weighted to compensate for non-response (sample-based weighting). The non-response weights are then calibrated so that weighted totals match population totals for males and females in different age groups and for different regions and countries (population-based weighting). The results in the analysis are weighted so that statistics represent the total population in private households in the UK based on 2011 Census data. In 2013/14, an additional calibration to the Labour Force Survey (LFS) employment totals was also applied.

There are a number of different measures of income used, the most common of which is probably household disposable income. This is the total income households receive from employment (including self-employment), income from private pensions, investments and other sources, plus cash benefits (including the state pension), minus direct taxes (including income tax, NI and council tax). Income is normally analysed at the household level as this provides a better measure of people's economic well-being; while income is usually received by individuals, it is normally shared with other household members (e.g. spouse/partner and children).

In 2018/19 a further adjustment was applied to the data to adjust for the under coverage and under-reporting of income of the richest individuals. This method is often referred to as the 'SPI adjustment' owing to its use of HM Revenue and Customs (HMRC's) Survey of Personal Incomes (SPI). For further details please see the ETB https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/methodologies/theeffectsoftaxesandbenefitsonukhouseholdincome">Quality and Methodology Information webpage and the https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/articles/theeffectsoftaxesandbenefitsonhouseholdincome/financialyearending2019">Effects of Taxes and Benefits on Household Income Technical Report.

Data Sources

The Household Finances Survey (HFS) is the source of the microdata on households from 2018 onwards. Previously, the Living Costs and Food Survey (LCF) was the data source. Derived variables are created using information from HFS and control totals from a variety of different government sources including the United Kingdom National Accounts (ONS Blue Book), HM Revenue and Customs, Department for Transport, Department of Health, Department for Education and Employment, and Department for Communities and Local Government.

Secure Access version

A Secure Access version of the ETB is available from the UK Data Archive under SN 8253, subject to stringent access conditions. The Secure Access version includes variables that are not included in the standard End User Licence (EUL) version, including case number, age and economic position of chief economic supporter, and government office region. Users are strongly advised to check whether the EUL version is sufficient for their needs before considering an application for the Secure Access version.

In 2024/25, income tax receipts in the United Kingdom amounted to 301 billion British pounds, compared with 275 billion in the previous year. Although the value of income tax receipts has grown quite consistently throughout this period, there is a sharp increase observable from 2021/22 onwards. The period of high inflation from 2021 onwards led to faster wage growth, which pushed many UK workers into higher tax bands, resulting in the increased income tax revenue. Income tax brackets The amount which workers in the United Kingdom pay in income tax is determined by how much they earn, placing them in different income tax bands. All workers in the United Kingdom are entitled to earn a personal allowance of 12,750 pounds before they are charged income tax. The Basic rate of 20 percent applies to income between 12,750 and 50,270 pounds, with a higher rate of 40 percent charged on incomes between 50,271 and 125,140 pounds. The highest tax band stands at 45 percent, for earnings over 125,140 pounds. Main UK taxes Income tax is the largest source of UK government revenue, accounting for 11 percent of gross domestic product in 2025/26. Value Added Tax was the next largest source of UK government revenue, followed by National Insurance, and Corporation Tax. Value Added Tax or VAT is the largest indirect tax in the UK, and is raised via a 20 percent levy on most goods and services sold in the UK. National Insurance Contributions form an additional direct tax on earnings in the UK, while Corporation Tax taxes the profits of companies resident in the UK.

United Kingdom UK: General Government: Revenue: Taxes: Income and Profits data was reported at 290,800.000 GBP mn in 2017. This records an increase from the previous number of 275,758.000 GBP mn for 2016. United Kingdom UK: General Government: Revenue: Taxes: Income and Profits data is updated yearly, averaging 235,198.000 GBP mn from Dec 1999 (Median) to 2017, with 19 observations. The data reached an all-time high of 290,800.000 GBP mn in 2017 and a record low of 149,567.000 GBP mn in 1999. United Kingdom UK: General Government: Revenue: Taxes: Income and Profits data remains active status in CEIC and is reported by International Monetary Fund. The data is categorized under Global Database’s United Kingdom – Table UK.IMF.IFS: Government Finance: Operations Statement: Annual.

Detailed breakdown of average weekly household expenditure on goods and services in the UK. Data are shown by place of purchase, income group (deciles) and age of household reference person.

UK: Revenue Excluding Grants: % of GDP data was reported at 35.399 % in 2016. This records an increase from the previous number of 34.898 % for 2015. UK: Revenue Excluding Grants: % of GDP data is updated yearly, averaging 33.837 % from Dec 1972 (Median) to 2016, with 45 observations. The data reached an all-time high of 35.982 % in 2008 and a record low of 29.428 % in 1973. UK: Revenue Excluding Grants: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s UK – Table UK.World Bank: Government Revenue, Expenditure and Finance. Revenue is cash receipts from taxes, social contributions, and other revenues such as fines, fees, rent, and income from property or sales. Grants are also considered as revenue but are excluded here.; ; International Monetary Fund, Government Finance Statistics Yearbook and data files, and World Bank and OECD GDP estimates.; Weighted Average;

This dataset provides a detailed analysis of the approved budget for Leeds City Council, as agreed by Full Council each year. The data provides an analysis by directorate, summary budget heading and budget heading and a description of the type of expenditure or income that the budget is for.