All Revenue Sources at a Glance — 2025/26 (£bn)
Direct Taxes (Income Tax, NI, Corporation Tax)
Indirect Taxes (VAT, Fuel Duty, Excise)
Property & Other Taxes
Where The Money Comes In — Tax Receipts 2025/26
Income Tax
PAYE + self-assessment. Largest single source. Frozen thresholds pulling more into higher bands.
£330bn
26.7% of revenue
National Insurance Contributions
Employee + employer NI. Employer rate rose to 15% in Oct 2024 budget.
£199bn
16.1% of revenue
Value Added Tax (VAT)
20% on most goods & services. £6,250 per household. Fell during COVID, now at record highs.
£181bn
14.7% of revenue
Corporation Tax
25% on profits (since Apr 2023). Up from 19%. Now 7.7% of total receipts.
£96bn
7.8% of revenue
Council Tax
Local authority tax on domestic properties. Set by councils.
£50bn
4.0% of revenue
Fuel Duty
52.95p per litre (frozen since 2011, incl. 5p temp cut). Declining as EVs grow.
£24.3bn
2.0% of revenue
Business Rates
Tax on non-domestic properties. ~£31bn. Under review.
£31bn
2.5% of revenue
Capital Gains Tax
Rates raised in Oct 2024 budget. Highly volatile — depends on market conditions.
£16bn
1.3% of revenue
Alcohol Duties
Beer, wine, spirits. Duty rates restructured 2023.
£13.5bn
1.1% of revenue
Tobacco Duty
Declining structurally as smoking rates fall.
£7.9bn
0.6% of revenue
Stamp Duty (SDLT)
Property and share transactions. Sensitive to housing market.
£13bn
1.1% of revenue
Air Passenger Duty
Per-flight tax. Rising with travel recovery.
£4.1bn
0.3% of revenue
TOTAL HMRC RECEIPTS
All HMRC-collected taxes. Up 9.3% year-on-year 2025/26.
£938.8bn
+ other govt income = £1,235bn total
⛽ What Makes Up the Price of a Litre of Petrol/Diesel?
Fuel Duty
52.95p
VAT (20%)
~24p
Crude Oil Cost
~38p
Refining & Distribution
~12p
Retailer Margin
~6p
🏛️ Total tax on 1 litre (duty + VAT): ~77p of a ~132p litre = 58% is tax. Fuel duty has been frozen at 52.95p since 2011 (with temporary 5p cut since 2022).
Where The Money Goes — Government Spending 2025/26
Total Welfare & Benefits
State pension, Universal Credit, housing benefit, disability — all social security combined.
£334bn
24.4% of spending
↳ State Pension
Basic + new state pension. Triple lock: highest of CPI/earnings/2.5%. ~12.8m recipients.
£130bn
9.5% of spending
↳ Disability & Health Benefits (incl. PIP)
PIP, ESA, DLA, Attendance Allowance — £76.9bn. PIP alone ~£26bn and rising rapidly.
£76.9bn
5.6% of spending
↳ Housing Benefit / LHA
Local housing allowance + housing element of Universal Credit.
£37.8bn
2.8% of spending
Health (NHS)
Total health spending including NHS England budget, public health, social care.
£204bn
14.9% of spending
Debt Interest
Interest on £2.99tn national debt. Third largest item after welfare and health.
£110bn
8.0% of spending
Education
Schools, colleges, universities, early years. Total including capital.
£95bn
6.9% of spending
Defence
Rising to 2.5% of GDP target. £60.2bn in 2024/25, expected higher in 2025/26.
£62bn
4.5% of spending
Transport & Infrastructure
Roads, rail, HS2 (now cancelled beyond Birmingham), local transport.
£43bn
3.1% of spending
Police & Criminal Justice
Police, courts, prisons, probation, legal aid.
£28bn
2.0% of spending
Foreign Aid (ODA)
Official Development Assistance. Cut from 0.7% to 0.5% of GNI in 2021. Now ~0.4% due to refugee housing costs counted as ODA.
£11.2bn
0.8% of spending
Children & Family Benefits
Child Benefit, Child Tax Credit, childcare subsidies.
£20bn
1.5% of spending
Environment & Energy
Green subsidies, Great British Energy, renewable contracts, energy security.
£32bn
2.3% of spending
TOTAL MANAGED EXPENDITURE
All public sector spending. 44.8% of GDP.
£1,368bn
Deficit: £133bn
🚨 The structural problem: The UK now spends more on debt interest (£110bn) than on defence (£62bn) and transport (£43bn) combined. Disability and health benefit spending (£76.9bn) is growing at 10%+ per year and is the fastest-growing major spending item — driven by PIP caseload growth. Total welfare at £334bn now exceeds the entire NHS budget.
Spending Breakdown — 2025/26 (Visual)
← Spending
Revenue →
⚠️ PIP alert: Personal Independence Payment spending was £26bn in 2024/25 and is forecast to reach £34bn by 2029/30 — almost doubling in 5 years. It is now one of the fastest-growing items in the entire government budget, driven by rising mental health caseloads, long COVID, and widened eligibility.