Featured key questions
Where does the government get its money?
The government raises around £800 billion in revenue each year. Most comes from the three biggest taxes: income tax, National Insurance contributions (NICs) and VAT.
How have government revenues changed over time?
UK tax revenue is forecast to reach its highest sustained level since the aftermath of the Second World War. One major trend since the 1970s has been a shift towards VAT.
How do UK tax revenues compare internationally?
UK tax revenue is below the average of other developed economies. The UK stands out as raising less from social security contributions.
How did COVID affect government revenues, spending, borrowing and debt?
The COVID-19 crisis entailed a record-breaking fall in output and increase in government spending. The economy will bounce back but debt remain high.
What does the government spend money on?
On the eve of the COVID-19 pandemic, government spending was almost £890 billion, or around 40% of GDP. Health spending is a growing share of the total.
Should income tax and National Insurance be merged?
Yes. There is a strong case for creating a single tax on income. This would make our biggest taxes much more transparent.