It’s no surprise that the UK government needs to raise funds to operate the country. Considering VAT applies to the vast majority of products and services bought and sold, it should also come to no surprise that it’s a massive source of revenue for the UK.
Below is a list of the total amount of VAT collected in recent years.
|2019 – 2020||129.88 billion GBP|
|2018 – 2019||132.17 billion GBP|
|2017 – 2018||125.36 billion GBP|
|2016 – 2017||119.8 billion GBP|
|2015 – 2016||115.42 billion GBP|
|2014 – 2015||111.35 billion GBP|
As you can see, VAT is an incredible money-spinner for the UK Government and one that is only going to rise higher as the years go on. In a 5 year period, between 2015 – 2020, the UK collected a staggering £622.63 billion pounds.
As of 2021, VAT is the 3rd largest revenue source for the UK government.
Based on that alone, you can see why HMRC loves VAT so much and why it has become one of the core revenue generating methods for the country.
You can use our vat calculator to work out how much of a product or service you paid for, generated in VAT. For most products purchased, it’s not a lot. When you’ve got the whole country continuously purchasing goods and services, it quickly adds up.