Research from RIFT Tax Refunds has revealed exactly where your tax goes, with the biggest beneficiaries being Health, Welfare, and Industry while Environment Protection, Culture, and Overseas Aid are assigned the smallest slices of the pie.
Tax is a hot topic at the moment thanks to Lizz Truss causing huge waves across the UK economy by promising to slash taxes and drag the country into positive growth. But while taxes certainly detract from our personal wealth, they also play an essential role in keeping the country working and caring for the population.
To help taxpayers better understand what their taxes actually contribute to, RIFT Tax Refunds has analysed data on HMRC tax receipts over the last two years to see just how our money is distributed across all of the many publicly funded aspects of daily life.
In total, the UK population pays an estimated tax bill of roughly £378 billion each year, split between National Insurance and Income Tax.
Based on the average national salary of £31,447, each individual pays an annual tax bill of around £6,421. But how is this money used? Where exactly does it go? RIFT has done some digging to find out.
The biggest slice of your tax bill – £1,406 (21.9%) – is funnelled into the Healthcare system, focussed on but not limited to supporting and advancing the NHS.
£1,259 (19.6%) of your taxes go towards funding the nation’s Welfare system, providing social protection for those who require it. Examples include disability and unemployment benefits, and all publicly funded social services.
£925 (14.4%) of our tax bill goes towards Business & Industry, covering most economic affairs excluding transport, while £649 (10.1%) goes towards State Pensions.
The education system receives £616 (9.6%), while transport gets £289 (4.5%).
We also contribute £289 (4.5%), towards Defence – the infrastructure that supposedly protects the UK against domestic and foreign threats, including warfare and terrorism. This money contributes to things like the armed forces, intelligence services, and Trident – the UK’s nuclear deterrent system.
Down towards the very bottom of the list and therefore receiving the smallest slice of our taxes are Housing & Utilities (£90); Environment protection (£83); Culture including sports, libraries, and museums (£77); Overseas Aid (£58); and UK contributions to the EU (£39).
CEO of RIFT Tax Refunds, Bradley Post told LondonLovesBusiness.com, “No one likes the idea of paying taxes and the idea of tax hikes are even less appealing. But while many of us simply see the lump sums that are removed on our behalf via our pay slips, there’s actually a great deal of things our taxes help contribute towards – such as the NHS and even the defence of our nation.
We could argue all day about how the money should be best spent – should the environment get more and defence get less, for example? – but it’s clear that each and every one of us is contributing to the successful running of the nation and we should all be very proud of that fact.
Of course, it has to be acknowledged, that during this cost of living crisis it is very difficult to find solace in the fact that we’re all contributing to the bigger picture, when so many are struggling to keep their head above water, the heating on and the family fed.”