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How Much Tax Do We Actually Pay UK

Updated on March 17, 2016

How Much Tax Do You Pay?

We all work hard to earn a living but at the end of the month when we go to open up our pay packet we are always disappointed to find that the Government has been in there even before we have received a single penny.

Income tax and national insurance take a big bite out of our pay packets even before we get our money.

But the story does not end there, our Government love our money and tax us on almost everything that we buy or use.

So Just how much of our hard earned wage packets do we actually see after all of the taxes have been taken off?

This article is based on a monthly wage of £1500.

Taxman Loves Money

look at the smile on his face !
look at the smile on his face ! | Source

Income Tax and National Insurance

The Government love to publish figures such as the Average National Wage, which at the time of writing this, is supposed to be £26.500 but how many people do you know who actually earn that much money? A more realistic figure would be around £1500 per month which works out at £18000 per year.

This is why the figures here all represent earnings of £1500 a month.

If you earn £1500 a month then you will be paying around £123.00 in income tax and a further £99.00 in National insurance.

When you receive your wage slip at the end of the month these have already been deducted from your earnings and your take home pay is now at £1278.00.

This also means that you are working over 23.6 hours a month to pay the Government.

The Government are already £222.00 better off and this has all come out of your pocket.

They Even Taxed My Pie Chart

They tax almost everything
They tax almost everything | Source

Tax on Fuel

The Government have already taken £222.00 of our hard earned salary and now they want even more out of us.

To take your car to work, you of course need to fuel up and the tax or excise duty on fuel in Britain is astronomical for every litre of fuel we buy £0.57 goes to the Government, that means that if you pay £20.00 on fuel every week £11.60 of that goes to the Government over a month the Government has taken another £46.40 of your money.add that to the £222.00 the Government has already taken and you are now £268.40 worse off every month.

There is also road tax to be paid if you are a driver and the national average for road tax is £100 a year which is another £8.33 in the Governments coffers.

New monthly total now stands at £276.73

Do We Pay Too Much Tax In Britain?

Do We Pay Too Much Tax?

See results

Tax on weeklyShopping

Based on a salary of £1500 per month, the average weekly shopping bill comes to around £100.

VAT or Value Added Tax is just another way for the Government to get their hands on our cash, not everything we buy though charges VAT, but averaged out it works out that we pay 16.6% vat on a £100 shopping trip.

Over a month the Government are taking another £66.40 from your pocket making the new monthly total for the Government £343.13

You like a glass of wine after dinner so yo buy two £5.00 bottles of wine each week but did you know that there are two Government taxes on a bottle of wine? first of all you pay VAT of 20% and then you pay a duty of £1.77 on a £5.00 bottle of wine.

Tax on wine and Cigarettes

That gives the Taxman another £2.77 for every bottle of wine that you buy. over the month the Government gets another £22.16 from you. making the total £365.29.

If you smoke you also have two taxes to pay you have the 20% vat and then you have £3.52 excise duty on every packet therefore if you smoke one pack of 20 every day at £6.00 per pack, the Government is taking £4.72 in tax over a month that gives them £141.60.

The taxman is now taking over a third of your take home pay with £506.89 going to him.

Tax on Gas and Electricity

Tax on Electricity and Gas for a typical household is charged at 20% VAT and pay on average £666.00 for electricity per year and £487.00 for gas making a total of £1153.00.

These figures mean that the average household pays £4.80 tax on gas and electricity every month.

Tax in the home does not stop at gas and electricity and although council tax does not go directly to the government it goes to the local government and we all have to pay it.

The average Council tax in the UK is £99.67 every month bringing our monthly tax bill up to £611.36.

Tax on an Average Pay of £1500.00 Per Month

Taxable Items
Income tax
National insurance
Road Tax
Gas and Electricity
Council Tax
When we look at these figures we realise that over 40% of our earnings go on taxes.

Total Tax Bill

For a person earning £18000.00 a year the total taxes that person pays comes to £7336.32 which means that from our income and outgoings the taxman takes 40.75%.

Please note that clothes and luxury items have not been covered in this article and for most cases you should add 20% vat to those totals.

Tax is so Taxing

How much I have left after shopping and taxes
How much I have left after shopping and taxes | Source

To be honest I am not a financial guru and I don't pretend to be otherwise, there are probably some taxes that are not accounted for in this article and if you notice any I will be happy to add them.

I wrote this article as a typical working guy who was wondering just how much of our earnings actually goes to pay taxes.

What I do not understand is that the Government take so much money from us and yet they are still billions of pounds in debt, maybe one day it will all even out, I hope so anyway.


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    • aviannovice profile image

      Deb Hirt 

      2 years ago from Stillwater, OK

      That's pretty steep all right, Jimmy. I heard from a friend in Scotland, hope much cheaper it is for me to buy things here than it would be there.


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