Revealed: Britain’s most expensive taxes
HMRC took in £622.8bn during the 2018-19 tax year, representing a £29bn increase on the previous year. Find out which personal taxes made the biggest contributions to this sum…
You may not be surprised to hear that income tax currently represents Britain’s most expensive personal tax, in spite of the rise in the personal allowance. It accounted for £190.5bn of the government’s tax take during the 2018-19 financial year.
National Insurance is the UK’s second priciest tax, providing the taxman with a total of £137.2bn. It was followed by VAT, which took in £131.7bn.
Capital gains tax accounted for £9.2bn of the government tax take. Nevertheless, this was up £1.5bn over the year.
In addition, insurance premium tax raised £6.2bn. Investment platform Hargreaves Lansdown notes that its contribution has doubled since the 2014-15 tax year.
Elsewhere, the UK’s sugar-lovers contributed towards the £240m, which came in from the soft drinks tax.
Stamp duty land tax was the only major personal tax to drop during the year, partly as a result of changes to stamp duty for first time buyers.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “The taxman would make the world’s most irritating dinner date. Everything you do – from earning a crust to forking out a fortune on the high street – the taxman takes a huge bite for himself.
“Over time, those bites are getting bigger: the income tax bill is £27bn more than it was four years ago, and the VAT bill has climbed over £20bn.”
Her parting advice is to make sure you are not paying more than your fair share of tax.
“It’s essential we take advantage of as much of our allowances as we can, from ISAs and LISAs to pensions. So you can enjoy the fruits of your labours, without the taxman taking a bite.”