The UK’s government has more than 1 trillion pounds at its disposal every year. This equates to around £15,000 per UK citizen.
The most significant source of income for the government comes from income tax. It’s responsible for a quarter of its budget, and it’s projected to generate around £303 billion in the year 2024/2025. Keep in mind this number will likely rise after 2028, as the minimum amount one can make before having to pay tax is frozen until then.
The second-biggest source of income comes from VAT, which is paid on many purchases and comes out at £203 billion. The third biggest is National Insurance, with figures sitting at £168 billion.
Following these three sources, there are many other relatively smaller sources of the government’s income. For example, corporation tax, council tax, and excise duties all make up a significant portion of the government’s tax money. Other sources come from the capital gains tax, which refers to the gains made on the value of one’s assets.
Contrary to popular belief, earnings made from the lottery or sports betting do not count as capital gains. In fact, any money made through both in-person and online casino gambling is tax-free. This means you can enjoy fast withdrawal and live casino gambling without having to worry about the taxation of your winnings.
Other taxes that the government collects budget resources through include stamp duty, vehicle excise duty, and even student loan repayments.
Luckily, all money raised goes directly towards good causes for the benefit of UK citizens. Specifically, the government spends its earnings on health, infrastructure, defence, and many other categories.
Currently, the government is spending the biggest chunk of its earnings on social protection, with £371 billion being dedicated to this purpose in 2024/2025. Social protection includes pensions, benefits, health protection, and food vouchers.
The second most significant source of expenses for the UK’s government is healthcare. It’s projected that health-related expenses will amount to £251 billion in 2024/2025, which is in line with the country’s current health spending. The country’s healthcare sector is requiring more money than it’s ever needed. This is due to the increasing price of medicine, operations, and care.
The country invests significantly in the future, as proven by the 2024/2025 budget for education –£131 billion.
The only other three-figure source of expenses for the UK’s government comes from debt interest. This is the amount of money the government has to give back and it has been on a significant rise in recent years. Thus, in 2024/2025, the government will have to return £109 billion of the money it has borrowed.
The government is expected to spend more on national defence during the current financial year. In 2023/2024, the country spent a total of £54.2 billion on defence. Based on recent figures provided by the UK Parliament House of Commons Library, the country’s budget will increase to £57.1 billion for 2024/2025. This suggests that the government plans to invest more in technology and training in the interest of national security.
The government also spends significant resources on the following sectors: transport, industry, agriculture & employment, public order & safety, personal social services, housing & environment, and others.
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