Where Does the UK Tax Revenue Come From?

The United Kingdom government is projected to collect £1,232 billion in total public sector current receipts during the 2025-26 financial year, according to the Office for Budget Responsibility. This figure represents approximately 40.5% of national income, equivalent to £43,077 per household. Taxes comprise 90% of these receipts, with the remainder generated from interest on assets and the operating surpluses of public corporations.

Income tax and national insurance contributions remain the primary engines of state revenue, collectively expected to raise approximately £530 billion. This concentration of revenue sources means that nearly 43 pence of every pound collected by the exchequer originates from levies on personal earnings. Within this category, income tax is forecast to raise £324.6 billion, while national insurance contributions are expected to provide £205.4 billion. The Office for Budget Responsibility notes that national insurance receipts will rise due to the recent increase in employer contribution rates and the lowering of the secondary threshold.

Value added tax serves as the third largest contributor, with a forecast yield of £179.6 billion, representing 14.6% of all receipts. Corporate tax receipts are anticipated to contribute £108.4 billion, reflecting the continued impact of the 25% main rate. While these four major taxes account for two-thirds of total revenue, the treasury also relies on smaller levies such as business rates, council tax, and fuel duty to meet its spending requirements.