Annual Tax Summary Calculator

Each year HMRC publishes a breakdown showing how your income tax and National Insurance contributions are spent by the government. The Annual Tax Summary divides spending into categories such as Health (NHS), Welfare, State Pensions, Education, Defence, Transport, Public Order and Safety, and Government Debt Interest.

For 2026/27, the largest share of tax goes to Health (around 20%), followed by Welfare (around 19%) and State Pensions (around 13%). The summary uses published Treasury data on departmental spending to calculate your personal share based on the total tax and NI you paid during the year.

This calculator takes your income tax and NI figures and produces a visual pie chart showing exactly where your money goes. It helps taxpayers understand the real-world impact of their contributions and can be useful for financial literacy and personal budgeting decisions.

UK 2026/27 tax summary — typical employee. £30,000 employee: income tax £3,486; employee NI £1,395; total £4,881 (16.3% effective rate). £50,000 employee: tax £7,486; NI £3,000; total £10,486 (21.0% effective). £75,000 employee: tax £17,432; NI £3,495; total £20,927 (27.9% effective). £100,000 employee: tax £27,432; NI £4,000; total £31,432 (31.4% effective). £150,000 employee: tax £53,703; NI £4,500; total £58,203 (38.8% effective). Personal Allowance tapered above £100k — effectively 60% marginal rate £100k-£125,140.

Tax bands 2026/27. Personal Allowance: £12,570 (0%). Basic rate: £12,571-£50,270 (20%). Higher rate: £50,271-£125,140 (40%). Additional rate: £125,141+ (45%). NI Class 1: 0% to £12,570; 8% to £50,270; 2% above. Scotland different bands (see Scottish income tax). Dividend allowance £500; rates 8.75%/33.75%/39.35%. Savings interest: PSA £1,000/£500/£0 by tax band. Capital Gains AEA £3,000 — rates 18%/24% residential, 10%/20% other assets.

Marginal vs effective tax rate. Effective rate: total tax ÷ total income — what you actually pay. Marginal rate: rate on next £1 earned — what you save by reducing income. £100k earner: effective 31%; marginal 40% (or 60% from £100k-£125k due to PA taper). £150k earner: effective 39%; marginal 45%. Use marginal rate for decisions: pension contributions (saves marginal rate); salary sacrifice; reducing dividend vs taking salary. Use effective rate to plan budgets (typical employee 18-25% deductions).

Special tax traps. £100,000 Personal Allowance taper: lose £1 of PA for every £2 over £100k. Income £100k-£125,140 has 60% marginal rate (40% income tax + 20% lost PA). Avoid by pension contributions back below £100k threshold. £50,000 (England) child benefit charge — but only relevant if you receive CB. £125,140+ additional rate plus PA fully lost. Lower-income trap: Universal Credit taper 55% above earnings + income tax 20% + NI 8% = 73% marginal at £12-£50k for some UC recipients.

How to reduce your tax bill legitimately. Pension contributions: tax relief at marginal rate (saves 20-60% on contributions). Max annual £60,000 + 3-year carry-forward. Salary sacrifice: pension, cycle-to-work, EV car — saves both income tax AND NI. Marriage Allowance: £252/year if eligible (non-taxpayer transfers PA to basic-rate spouse). Charity Gift Aid: charity claims 25%; higher-rate taxpayer reclaims additional 25%. Junior ISA for kids: £9,000/year tax-free. EIS/SEIS investments: 30%/50% income tax relief + CGT exemption (high risk). Annual Tax Summary received from HMRC each January shows where your money went.