Finding out how the government spends your taxes

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Around 24 million workers will receive an annual statement from the government showing how their taxes were spent.

Chancellor George Osborne says the first statements will be posted out in October 2014.

The statements are aimed at helping people have a better understanding of how the tax system works and how the government spends their money.

The statements are expected to show that around 22% of all taxes are spent on welfare benefits.

Tax experts suggest that the move is also political, as the statements will reflect any major shift in government spending, like action to increase benefits by a future government.

“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,” said Osborne.

The statements will go to everyone who completes an online self-assessment return, which adds up to around 8 million people, plus 16 million taxpayers who receive a PAYE coding notice each year.

This leaves around 6 million taxpayers who will not receive a statement.

They can access the information from the HM Revenue & Customs (HMRC) tax calculator app for mobile phones or tablets. The app can be downloaded free from the Apple app store or Google Play by searching ‘HMRC tax calculator’.

Click here to see an example of how the annual tax statement will look

In one example statement, someone earning £30,000 in the year to April 5, 2014 would pay tax and national insurance of £6,781.

Of this, £1,529 would be spent on welfare benefits and £1,257 on the National Health Service. Another £1,019 would go to state pensions, £882 to education, £140 to culture, such as museums and libraries and £318 on criminal justice.

The government would also spend £479 financing national debt interest, £123 on the environment, £59 on the Britain’s contribution to the European Union budget and £37 on overseas aid.

For more information, please contact Ian Abrey