Taxation in the UK

In the United Kingdom, taxation may involve payments to at least three different levels of government: central government (via HMRC), devolved governments and local government.

Central government revenues come primarily from income tax, national Insurance contributions, value added tax, corporation tax and fuel duty.

Local government revenues come primarily from grants from central government funds, business rates (in England), council tax and increasingly from fees and charges such as those for on-street parking. In the fiscal year 2023–24, total government revenue was forecast to be £1,140 billion, or 41% of GDP.

Legal framework

Laws governing taxation and various refunds and special cases are incredibly numerous and mutually intertwined. In the UK this is further complicated by there being four countries with laws not necessarily applicable to all. Add to that legal precedent set by courts and it is no wonder nobody actually understands the law.

LexisNexis publish Yellow and Orange Tax Handbooks which attempt to bring together all direct (Yellow) and indirect (Orange) tax legislation in one place. Taxes covered by the Yellow Handbook include income tax, capital gains tax, corporation tax, national insurance contributions, and inheritance tax. Taxes covered by the Orange Handbook include value added tax, stamp and land transaction taxes, insurance premium tax, the soft drinks industry levy, plastic packaging tax, landfill taxes, the aggregates levy and the climate change levy.

HMRC, helpfully, publishes manuals designed to help us all. There are well over one hundred of these HMRC manuals.