Why We Pay Taxes: Because Unicorns Don’t Fund The NHS

The Budget is coming on 26th November 2025 and there is a lot of speculation about what horrors are going to be in it. Once it is out and I have digested it, I will be posting blogs on the updates and how this might impact you.

But in the lead up to this, I have had quite a few calls with people where the question "where is our tax even going" regularly comes up.

Think of taxes as the ultimate group subscription. The UK is like a massive group chat, and each of us chips in so the server doesn’t crash, the snacks don’t run out, and nobody gets kicked out for not paying their lounge fee.

Here’s why we put our hands in our pockets:

• Public Services: We pay so that schools don’t look like haunted houses, the NHS can actually pick up the phone, and public transport doesn’t feel like a medieval trial by biscuit crumbs.

• Social Safety Net: Welfare, pensions, social care - basically, a soft landing for when life throws banana skins.

• Government Running Costs: Civil servants, ministers, office buildings... even politicians need a salary (mind-blowingly).

• Debt: Yep, part of your money goes on paying interest on the money we’ve already borrowed.

• Future Stuff: Infrastructure, green projects, R&D - taxes help fund the dream of what Britain could be (or at least poor pothole-free roads).

  
  

The Tax Buffet: How Much Do We Pay, and on What

Let’s talk numbers, but in a way that doesn’t feel like a GCSE economics textbook.

• In 2023/24, the UK government collected £1,099 billion in total current receipts.

• Here’s how that breaks down:

  • Income Tax: ~£277 billion

  • National Insurance (NICs): ~£179 billion

  • VAT: ~£169 billion

  • Corporation Tax: ~£97 billion

  • Smaller but still juicy bits: council tax (~£44bn), capital taxes (~£38bn), business rates (~£26bn), fuel duty (~£25bn), alcohol & tobacco duties (~£21bn).

  • Plus, “other receipts” (interest, public corporation income, etc.): £124 billion.

More recently, HMRC reported that in 2024/25 they collected £858.9 billion in taxes.

Where the Party Money Actually Goes: What We Spend On

Now, where does the government spend that glorious tax pot? A bit like throwing a huge party - some goes on food, some on lighting, some on paying for someone to clean up the mess.

Here are the biggest chunks of 2024/25 spending:

• Social Protection (welfare, pensions, benefits): ~£384 billion

• Health (NHS and social care): ~£242 billion

• Education: ~£119 billion

• General Public Services (government running costs): ~£158 billion

• Economic Affairs (infrastructure, business support etc): ~£87 billion

Other areas include defence, justice, transport, capital projects and the looming grey cloud of debt interest. Day-to-day departmental budgets alone (DEL) are about £596.2 billion, with debt interest taking a big bite out of the pie.

The “Why This Is Kinda Worth It (But Also, Ouch)” Moment

• It’s a shared pot: Without taxes, public healthcare might cost the equivalent of a monthly Netflix subscription x 1000 (in your dreams, right?).

• Redistribution happens: Social protection is one of the biggest slices of spending.

• Debt is real: A hefty amount of tax money goes on interest - so we’re partly paying for yesterday’s parties.

• Future-facing investments: Some of that spending is building the UK of tomorrow - hopefully with fewer potholes and more green energy.

The Joke’s On Us - But in a Good Way

• When your payslip thins, remember: you’re investing in an NHS that (hopefully) saves lives, not wrestling bears.

• When you grumble about council tax, also think: part of that pays for roads, schools, and rubbish collection - yes, even the bin men are on the squad.

• And when you see the government borrowing more: well, that’s you and me betting on a heavily leveraged party that still wants to stay open.

Obviously a lot of the above is an idealised version of how taxes are spent - the fact that the country doesn't feel like it runs better is mainly due to consecutive political decisions (or indecisions) for decades. But in these dark times, maybe trying to think idealistically isnt always a bad thing?

So, next time you mutter “Why do I pay so much tax?”, imagine you’re just contributing to the world’s most chaotic, well-funded pub quiz - sometimes confusing, always expensive, but actually pretty useful.