Money makes the UK go around......

The more complicated aspects of high finance leave me cold and I confess to being largely ignorant of the details of our national bank statement. So I did find the following information on UK Government income and spending at the right level for me. Although the income and expenditure figures do not match as they are taken from two overlapping time periods, they do give a good idea of where the money comes from and where it goes!

Where does the money come from? HMG will have raised £562Bn in the 2011/12 financial year and that represents £12000 per adult. As I've never given these figures much thought, I have no objective basis for commenting on the relative amounts raised. In the notes that accompanied this table were the following facts:   1% of taxpayers (300,000 people) pay 27% of all income tax and national insurance, 10% of taxpayers pay 53% of all tax and 90% of tax payers pay 47%. The number of taxpayers paying the top rates of tax (50% and 40%) has trebled in 30 years because tax bands have not increased in line with earnings.

Where does the money go? Apparently 80% of us believe that our National Insurance Contributions go directly towards the NHS or Pensions. Wrong! We don't go in for hypothecated taxes in the UK (dedication of the revenue from a specific tax for a particular expenditure) and all taxes raised go into a single pot for distribution as our government sees fit. £86Bn of the pensions spend is for State Pensions and £34Bn for Sickness and Disability Pensions. By comparison, £4.1Bn is spent on roads. 12% of the budget goes on Defence and Protection, which is slightly more than the Welfare allocation. I'd be interested to know how much is spent collecting some of the smaller revenue generators, such as Stamp Duty and Inheritance Tax. But not that interested that I'm going to probe further.

Are these allocations in the right proportions? Apart from the vast sums on Defence and Protection, they look reasonable to me but I will say that I'm glad that I don't have to balance the books! Aren't we lucky that George Osbourne is doing such a good job for us - allegedly.