Note: The chart assumes all NICs are incident on the worker whose earnings are taxed. Households are divided into 10 equal-sized groups based on their net income adjusted for household size using the Modified OECD equivalence scale.
Source: Authors’ calculations using the IFS tax and benefit microsimulation model, TAXBEN, run on uprated data from the 2018–19 Family Resources Survey.
Income tax is the single most important source of revenue for the UK Treasury. It is forecast to raise around £200 billion in 2021–22 – about a quarter of all government tax receipts.