Where Does All the Money Go?
Have you ever wondered what happens to the tax you hand over to HMRC?
The government used to send a printed annual summary to taxpayers that outlined how much Income Tax and National Insurance individuals paid in the last financial year and how these contributions were used in government spending. Since 2020, this information has been available online via your Government Gateway account or you can request a paper copy from HMRC.
We last looked at the summary for the 2015/16 financial year, so we thought it might be interesting to revisit the latest numbers.
According to ONS statistics* in 2021/22 the government received a total of £230 billion in income tax (PAYE and Self-Assessment) and £161 billion in National Insurance contributions. These taxes made up around 43% of the £918 billion total current receipts in 2021/22.
This compares to £170 billion (income tax) and £114 billion (NI contributions) in 2015/16 when the total receipts figure was £680 billion.
The diagram shows how the government spent the money it raised through tax and NI in the financial year to 5 April 2021 income. The four top categories remain the same as six years ago, health, welfare, state pensions and education, although the order has changed; health spending is now higher that welfare. Also the percentage of income tax and NI receipts spent across these four areas in total has reduced from almost 70% to just short of 65%.
There are only two categories where actual spend has fallen since 2015/2016; payments to the EU and overseas aid. The UK contribution to the EU was £7.7 billion six years ago, and outstanding EU payments in 2020/21 were £6.5 billion. Overseas aid spending has fallen from £7.7 billion in 2015/16 to £5.4 billion in the latest figures.
If you want to see the full details of spending these can be found in Public Expenditure Statistical Analyses on the GOV.UK website.
