How Much Money The Average UK Family Pays In Tax
The name of the site is Where Does It Go, so here is a some information on where your money goes in regards to tax.
According to a BBC survey in November 2007, the average income for a family with 1.9 kids is £32,779, or £630 a week.
Assuming 22% tax (20% in 2008) this equates to a family paying £126 income tax a week.
But we’re not only taxed on income, we’re taxed on our outgoings as well via VAT – using the VAT calculator I took some rough figures from the above graph to give a back of the envelope guestimate on how much we pay out in tax indirectly through spending.
We currently pay 0% tax on:
- food
- books, newspapers and magazines
- children’s clothes
And a reduced rate of 10% on:
- reduced rate
- fuel power
- energy saving
- residential conversions
Everything else is at standard 17.5%.
As can be seen from the above BBC chart, the average spend per week for family – £601.20. Broken down I included how much we can expect to pay in tax for each area:
- Food – £60 – No tax
- Alcoholic drinks/ cigarettes – £15 – Tax: £1.50 (Source)
- Clothing – £35 – children’s clothes no tax; assume adults get £20 taxed at 17.5% – Tax: £2.50
- House fuel – £45 – Tax: £2.25
- Household goods – £40 – Tax:£5.00
- Health – £5 – Tax:£0.85
- Transport – £80 – Fuel tax of 80% (Source) – Assume petrol is £40 – Tax:£30
- Communication – £15 – Tax: £2.62
- Recreation – £80 – Tax: £14
- Education – £20, Assume they are books – No Tax
- Restaurants/hotels – £45 – Tax: £7.87
- Misc goods – £50 – Tax: £8.75
- Other – Mortgage interest, holidays, fines, licences – £105 – assume no tax
TOTAL: £75.34
TOTAL INCLUDING INCOME TAX: £201.34
I have tried to err on the side of caution in assigning rough figures, if you have suggestions for modifying this please let me know.
In conclusion: 31% of your money goes straight back to the government. How do YOU want it spent?
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[...] Carrying on with our series on where does your money go, lets use those figures from the post – How Much Money The Average UK Family pays in tax [...]
Interesting post.
I thought VAT on fuel was 5% though, this is the minimum the EU will allow us to charge. Using your model it would be interesting to see where the VAT change to 15% was going to have any effect. Sadly those on the breadline have a larger proportion of VAT free purchases so it doesn’t help the poor at all – what a surprise – new labour not helping the poor…
I maintain that the drop in VAT was merely a public display, a gesture (wasteful in the extreme) which will have no effect on the families that need a helping hand
Thanks for your help, this is really informative stuff! Can’t wait to read some more.