HMRC letters to detail exactly how your tax is spent


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24 million people will receive a tax statement explaining how their contributions have been spent, from later on this year.

Chancellor of the Exchequer George Osborne has announced that from October this year around 24 million people will receive a personal tax statement from HM Revenue & Customs, which will detail exactly how much tax they paid in the previous year, and how it contributed to public expenditure.

The idea was first raised in the 2012 Budget, though the number to receive the letters has grown by four million in that time.

Osborne said: "These tax statements represent a huge boost for tax transparency, showing people very clearly how much tax they pay and giving them a better understanding of where their money is spent."

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Example statements

The Treasury has released examples of what the statements could look like; in one of these, the statement shows that someone who earned £15,000 in the 2013/14 tax year would have paid £1,981.76 in tax and NI contributions – revealing that for every £1 of income, 13 pence was paid in tax and NI.

Over the page, the report breaks down that £1,981.76 to show how much was spent on welfare (£447), health (£367), State Pensions (£298), and so on.

16 million PAYE taxpayers who received a tax coding notice from HMRC for the 2013/14 tax year, plus eight million taxpayers who complete self-assessment returns online will receive the statements. Any taxpayer who does not receive a tax statement can use HMRC's tax calculator to estimate their tax bill and their contribution to public spending.

In addition an app can be downloaded for free from the Apple store or Google Play by searching for the 'HMRC Tax Calculator'.

Will these letters make Government spending more transparent? Do you want to know how your tax money is spent? Let us know your thoughts in the comments box below.

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