**3.1. International comparisons in tax composition**

**Table 2** presents comparisons between the UK and several other countries in the composition of their tax revenues at several points in the period between 1990 and 2014.

For the US income tax is the single largest contributor to overall tax revenues, accounting for about 39% of total revenues in 2014. For the UK, in contrast, income tax was the second largest source of revenues at about 27% of the total in 2014. For the UK, VAT was the largest contributor at around 33%. In both the UK and the US the contribution of taxes on corporate income and on property are of broadly comparable significance. The US also differs from the UK with a greater contribution of social security payments but a substantially lower relative

UK Taxes and Tax Revenues: Composition and Trends http://dx.doi.org/10.5772/intechopen.74380 89

contribution from taxes on goods and services.

**Table 2.** International comparisons in the composition of tax revenues.

**Figure 3.** International comparisons of the tax burden.


**Table 2.** International comparisons in the composition of tax revenues.

**Figure 3.** International comparisons of the tax burden.

for 8–9%. In each time revenues from England dominate the UK total. Receipts from England

**Figure 3** compares tax revenues as a percentage of GDP for a sample of countries for both 1995 and 2014. The UK is slightly below the average for all OECD countries (33% in 1995 and 34% in 2014). As a share of GDP the UK's tax revenues increased slightly from about 30% in 1995 to approximately 32% in 2014. For the majority of other countries in the sample such changes that occurred in the share of tax in GDP tended to be modest. In consequence, countries such as Chile, the United States and Switzerland were low tax in both 1995 and 2014. High tax

Countries which showed significant increases in the share of tax in GDP between 1995 and 2014 included Turkey and Greece. Countries with a significant reduction in the share of tax in

**Table 2** presents comparisons between the UK and several other countries in the composition

accounted for 86% of the total in 2000–2001 and 87% of the total in 2015–2016.

countries in both 1995 and 2014 included Denmark, France and Italy.

of their tax revenues at several points in the period between 1990 and 2014.

**3. International comparisons**

88 Taxes and Taxation Trends

GDP included Slovakia and Poland.

**3.1. International comparisons in tax composition**

For the US income tax is the single largest contributor to overall tax revenues, accounting for about 39% of total revenues in 2014. For the UK, in contrast, income tax was the second largest source of revenues at about 27% of the total in 2014. For the UK, VAT was the largest contributor at around 33%. In both the UK and the US the contribution of taxes on corporate income and on property are of broadly comparable significance. The US also differs from the UK with a greater contribution of social security payments but a substantially lower relative contribution from taxes on goods and services.

In France the relative contribution of social security to overall tax revenues (37% in 2014) is close to double that of the UK (19% in 2014). The UK earns proportionately more from personal income tax, corporate income tax and from taxes on goods and services than does France.

The composition of Malaysian tax revenues is almost wholly different to that of the UK. In Malaysia in 2014 receipts from taxes on corporate income accounted for about 53% of total tax revenues. The comparable figure for the UK was just 7.5%. Social security contributions and property taxes account only for a minimal share of Malaysian tax revenues but represent a more significant share of overall UK revenues. Personal income tax in the UK is approximately double the share of tax revenues of that in Malaysia (14% compared to 27% in 2014).

Argentina too has a fundamentally different composition of tax revenues than the UK. In the UK revenues from personal income tax represent the second largest share of overall receipts. In Argentina they accounted for less than 9% of the total, even less in earlier years. Taxes on goods and services are the dominant source of tax revenues for Argentina, accounting for almost 50% of total revenues. In the UK they are the single largest contributor but still account for approximately one third of the total.

**Figure 5** presents a similar analysis for National Insurance Contribution (NIC) revenues over the same period (January 2002–September 2016) in constant price terms. As with personal income tax monthly revenues exhibit considerable volatility. Again a trend was fitted using an OLS regression in Eviews7. The trend, as with personal income tax, shows a steady rise in

UK Taxes and Tax Revenues: Composition and Trends http://dx.doi.org/10.5772/intechopen.74380 91

**Figure 6** presents monthly data on VAT revenues from April 2008 until August 2016 (earlier data were not available). Yet again receipts show considerable volatility over time. As with both personal income tax and NICs OLS regression was used to construct a trend line. The trend, as with the other two taxes, has been for a steady but gradual increase in revenues from VAT. Finally, **Figure 7** presents a similar graphical analysis for monthly UK tax revenues (measured in constant price terms) from the period April 2008–September 2016. As with the earlier charts a trend was estimated using OLS regression in Eviews7. Total tax revenues (as shown by the trend line) remain volatile from 1 month to another but the trend is almost constant in

real terms, exhibiting a very slight and gradual increase over the period.

the real value of NICs over the period.

**Figure 6.** Monthly VAT revenues (constant prices).

**Figure 5.** Monthly NIC revenues (constant prices).
