In 2025/26, income tax receipts in the United Kingdom amounted to  billion British pounds, compared with billion in the previous year. Although the value of income tax receipts has grown quite consistently throughout this period, there is a sharp increase observable from 2021/22 onwards. The period of high inflation from 2021 onwards led to faster wage growth, which pushed many UK workers into higher tax bands, resulting in the increased income tax revenue.Â
Income tax brackets
The amount which workers in the United Kingdom pay in income tax is determined by how much they earn, placing them in different income tax bands. All workers in the United Kingdom are entitled to earn a personal allowance of pounds before they are charged income tax. The Basic rate of percent applies to income between and pounds, with a higher rate of percent charged on incomes between and pounds. The highest tax band stands at percent, for earnings over pounds.
Main UK taxes
Income tax is the largest source of UK government revenue, accounting for percent of gross domestic product in 2025/26. Value Added Tax was the next largest source of UK government revenue, followed by National Insurance, and Corporation Tax. Value Added Tax or VAT is the largest indirect tax in the UK, and is raised via a percent levy on most goods and services sold in the UK. National Insurance Contributions form an additional direct tax on earnings in the UK, while Corporation Tax taxes the profits of companies resident in the UK.