Accredited official statistics

Background documentation

Published 27 November 2020

1. About this release

1.1 What is Income Tax?

Income Tax is a tax on an individual’s income over the course of a tax year (6 April to 5 April the following year). Income Tax is the UK Government’s largest single source of tax revenue.

The amount of Income Tax an individual should pay, their tax liability, is determined by a number of factors including: their level of income, the type of income and the level of allowance to which they are entitled, and where in the UK they are located (as some aspects of Income Tax have been devolved).

For information about Income Tax liabilities please see Income Tax liabilities statistics.

Income Tax is collected by HM Revenue and Customs (HMRC). The way in which Income Tax is collected is dependent on the type of the income an individual has and the total income of that individual.

For most individual taxpayers, Income Tax on employment income or occupational pensions is collected through Pay As You Earn (PAYE) where Income Tax is calculated and deducted from the taxpayer’s pay or pension before being paid over directly to HMRC by the employer or pension provider.

Until April 2016, tax on savings income was deducted at source by banks or building societies at the basic rate, with additional Income Tax due for higher and additional rate taxpayers being collected either through PAYE (via a change in tax code) or through Self Assessment.

From 6 April 2016, the Personal Savings Allowance means that basic rate taxpayers can receive up to £1,000 in savings Income Tax-free (£500 for Higher Rate taxpayers). Banks and building societies have stopped deducting tax from account interest – any Income Tax due for higher and additional rate taxpayers is to be collected either through PAYE (via a change in tax code) or through Self Assessment. Some non-interest payments, which are taxable, will still be deducted from accounts however. Additionally, this change will cause a reduction in repayments made to individuals due to PEP/ISA.

Taxpayers with high levels of income, the self-employed and others with income outside the scope of PAYE are required to pay any additional tax due through Self Assessment (SA). Further information about the types of Income Tax received by HMRC is provided in Section 2 of this publication.

A repayment occurs when a taxpayer has paid too much tax to HMRC. Over payments may happen for a number of reasons, for example when people move in and out of work or receive changes to taxable benefits. Further information about tax repayments and ways of reclaiming overpaid tax is available on the HMRC website.

1.2 What is the difference between Income Tax receipts and Income Tax liabilities?

In addition to the tax receipts statistics published here, there is a separate publication on Income Tax liabilities. Liabilities are amounts of tax due on incomes arising in a given tax year, whereas receipts show amounts paid and collected in a given year. Due to lags in the Income Tax payment regimes, particularly for Self Assessment, liabilities and receipts for the same year can differ significantly.

Liabilities and receipts will also differ for other reasons, for example when over or underpayments occur which are repaid or recovered in a later year altering total receipts in that year in a way unrelated to tax liabilities for that year. Moreover the methods for producing Income Tax receipts and liability statistics are different (receipts statistics are based on administrative data sources whereas liability statistics are compiled using a sample of tax return data).

If you require statistics about how much tax is actually paid and collected by HMRC in any given tax year, or information on how the tax has been collected, then the information you require is contained within this publication. The nature of how Income Tax is collected means it is not possible to analyse receipts by taxpayer characteristics, for example, by taxpayer’s marginal tax rate, age or gender. However, these analyses are possible through modelling of Income Tax liabilities based on a representative sample of taxpayers using administrative data.

If you require detailed breakdowns of Income Taxpayer numbers and the distribution of tax liabilities across taxpayers and tax bands, then you should look at statistics on tax liabilities. These statistics on tax liabilities also reflect more closely and directly than tax receipts the impact of changes in the tax regime and in the wider economy.

1.3 What information does this publication cover?

This publication shows annual Income Tax receipts and Income Tax credits and repayments (other than those made through Self Assessment). Receipts are disaggregated according to the way in which tax is collected (through Pay As You Earn, Self Assessment etc). Repayments and tax credits are broken down by type where possible. Tables in this publication currently cover the years 2008 to 2009 to 2019 to 2020.

1.4 Who might be interested in this publication?

These tables are likely to be of interest to policy makers in government, academics, think-tanks and other research bodies and journalists. They would be of use to individuals or organisations interested in total Income Tax receipts, and the breakdown of receipts by method of collection.

2. Methodology

2.1 Methodology and Data Sources

Data used in the Income Tax receipts tables comes from HMRC departmental administrative sources. PAYE receipts come from the BROCS system (Business Review of the Collection Service) for all years up to and including 2012 to 2013. From 2013 to 2014 PAYE receipts come from a different PAYE accounting system (the Enterprise Tax Management Platform, or ETMP), linked to the Real Time Information (RTI) programme.

Self Assessment receipts come from the HMRC system SAMAS (Self Assessment Management Accounting System). Other components come from the HMRC system SAFE (Strategic Accounting Framework Environment).

Data is extracted from the relevant systems. Some adjustments are applied to data extracted from the systems in order to identify the Income Tax component:

PAYE: receipts for PAYE IT and NIC1 are collected through the same system and are not separately identifiable on the payment information. HMRC collects pay period information from Employers through RTI. Payments are then posted against pay period liabilities. The IT and NIC split of postings for previous month is then applied to payments for current month.

Self Assessment: receipts include Income Tax, capital Gains Tax and Class 2 and 4 NICs. Money paid via Self Assessment covers Income Tax, Capital Gains Tax and Class 2 and 4 NICs. Receipts for each of these heads of duty are not identified separately, instead they are apportioned based on the split of liabilities. This split of receipts is fixed for the Trust Statement.

Preliminary estimates for the latest year are published in April. These are based on the estimated end year receipts position, with forecasted values being used where final receipts positions are unknown, where values are not final this will be indicated in the statistical tables. The HMRC Trust Statement has historically been published during July, but in 2020 it was published in November. These statistics broadly align with HMRC Trust Statement. For 2016 to 2017 and 2017 to 2018, some accounting adjustments which apply to the Trust Statement are not reflected here.

Statistics are based on data from major HMRC administrative systems plus data published in the Trust Statement, which are subject to high levels of scrutiny and audit. The data sources used to produce the Income Tax receipts statistics are also used to monitor tax receipts and they are used to produce other published HMRC statistics (HM Revenue and Customs receipts).

Figures in the tables are rounded to the nearest £1 million.

3. Quality

National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

The quality of these statistics is assessed against the six European Statistical Service dimensions of quality developed by Eurostat to ensure they are appropriate for publication. A summary of adherence with each dimension follows. http://www.ons.gov.uk/ons/guide-method/method-quality/quality/guidelines-for-measuring-statistical-quality/index.html

4. Publication and revision strategy

The data is scheduled to be released once a year with updates to all tables usually in August. The commentary in this bulletin will be updated at the same time as the tables it refers to. Release dates are announced on the UK Statistics Hub. Any delays to the publication date will be announced on UK Statistics Hub.

Estimates for 2019 to 2020 are considered final in this publication. Figures will otherwise be revised only if an error is discovered or late adjustments occur as a result of the Trust Statement. In this release, previous years have not been revised. These figures reflect those reported in HMRC’s Annual Accounts and Trust Statement published on 5 November 2020.