**1. Introduction**

The UK tax system includes a wide range of different taxes. The system is complex and interested readers are referred to Pope and Waters [1] for a more complete survey. The main taxes include:

• Personal income tax. Almost all forms of income are subject to tax but the rate of tax applied is determined by a series of income bands and subject to allowances against tax. Every taxpayer is given a personal allowance (£11,000 in 2016–2017) which is deducted from their pre-tax income before income tax is levied. The allowance is reduced for incomes over £100,000. The rate of tax varies according to bands. In 2016–2017 the basic tax rate of 20%

was applied up to an income of £32,000, a higher rate of 40% for incomes between £31,785 and £150,000 and an additional rate band of 45% for income over £150,000. The UK Government estimates there to be about 30.1 million income tax payers in 2016–2017, including some 609,000 basic rate (only) payers and about 4.4 million in the highest band.

The complexity of the UK tax system necessitates a degree of simplification to understand its effects and key underlying trends. In particular it makes sense to consider the composition of tax revenues in the UK—to identify which taxes make the most important contributions to

UK Taxes and Tax Revenues: Composition and Trends http://dx.doi.org/10.5772/intechopen.74380 85

**Figure 1A** shows the composition of UK tax revenues for the tax year 2008–2009 and **Figure 1B**

**Figure 1.** (A) Composition of UK tax receipts for tax year 2008–2009. (B) Composition of UK tax receipts 2015–2016.

government revenues and how they have evolved over time.

**2. The composition of UK tax revenues**

**2.1. UK tax revenues by type of tax**

the composition in 2015–2016.


The complexity of the UK tax system necessitates a degree of simplification to understand its effects and key underlying trends. In particular it makes sense to consider the composition of tax revenues in the UK—to identify which taxes make the most important contributions to government revenues and how they have evolved over time.
