National Statistics

Income Tax Deducted from Pay Statistics 2017 to 2018 to 2018 to 2019

Updated 29 October 2020

Overview

This National Statistics publication shows percentage distribution of Income Tax deducted from pay (excluding pensions), by industry. The amount of Income Tax in this publication does not include National Insurance contributions (NICs).

This release currently covers tax years 2017 to 2018 and 2018 to 2019.

Provisional statistics are provided for the latest tax year and they are revised in the following annual publication. The revisions reflect processing of further data and improvements in identification and exclusion of additional small amounts of occupational pension.

These figures are based on a 1% sample of Pay as You Earn (PAYE) administrative data. A small amount of tax from occupational pensions is included in this table as it is not always possible to distinguish pensions from pay when they are in the same PAYE scheme.

The industry groups used in the table are based on the UK Standard Industrial Classification (SIC) of Economic Activities 2007.

About these statistics

This is a National Statistics publication produced by HM Revenue and Customs (HMRC) using employer end of year PAYE summary information from HMRC’s administrative systems.

More information on National Statistics and governance of statistics produced by public bodies is available from the UK Statistics Authority website.

Contact details

For queries or feedback on this publication, please contact the statistician:

• Christine Yau

For press queries, please contact:

• HMRC Press Office: 03000 585 024
• Out of hours: 07860 359 544

Next release

The next release will be announced on Schedule of updates for HMRC’s statistics on GOV.UK in due course.

Key statistics

The industry sectors accounting for the largest share of Income Tax deducted from pay in the 2018 to 2019 tax year is broadly unchanged from the previous year.

Financial and Insurance Activities accounted for the most tax. The proportion of tax was 17.0% for 2017 to 2018 and 16.6% for 2018 to 2019.

Professional, Scientific and Technical Activities accounted for 11.8% of tax for 2017 to 2018 and 12.2% for 2018 to 2019.

Wholesale and Retail Trade: Repair of Motor Vehicles and Motorcycles accounted for 10.6% for 2017 to 2018 and 10.2% for 2018 to 2019.

The amount of tax that could not be allocated the SIC2007 industry groups is 0.1% in both 2017 to 2018 and 2018 to 2019.

Figure 1: Percentage of Total Income Tax deductions by industry

Industry	2017-18	2018-19
Agriculture, Forestry and Fishing	0.3%	0.3%
Mining and Quarrying	0.5%	0.6%
Manufacturing	9.5%	9.5%
Electricity, Gas, Steam and Air Conditioning Supply	0.9%	0.9%
Water Supply; Sewerage, Waste Management and Remediation Activities	0.6%	0.6%
Construction	4.7%	4.8%
Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles	10.6%	10.2%
Transportation and Storage	4.1%	4.2%
Accommodation and Food Service Activities	1.8%	1.8%
Information and Communication	8.5%	8.8%
Financial and Insurance Activities	17.0%	16.6%
Real Estate Activities	1.5%	1.6%
Professional, Scientific and Technical Activities	11.8%	12.2%
Administrative and Support Service Activities	5.9%	5.9%
Public Administration and Defence; Compulsory Social Security	4.4%	4.3%
Education	6.5%	6.4%
Human Health and Social Work Activities	8.4%	8.5%
Arts, Entertainment and Recreation	1.8%	1.8%
Other Service Activities	1.0%	1.0%
Other a	0.1%	0.1%

Source: PAYE data and Inter-Departmental Business Register

Figures for earlier years are available in the Excel table.

Footnotes

a. Includes activities of private households and overseas organisations.

Notes

1. This table shows the distribution of tax deducted from pay (excluding pensions) by industry group. Income tax does not include NICs.

2. Revised figures for tax year 2017 to 2018 and provisional figures for tax year 2018 to 2019.

3. Revisions to previously published figures reflect processing of further data and improvements to identification and exclusion of additional small amounts of occupational pension. The exclusion of additional amounts of occupational pension has only a negligible effect on industry distribution of PAYE tax.

4. Percentages may not sum to 100% due to rounding.

5. A small amount of tax from occupational pensions is included in this table. It is not always possible to distinguish pensions from pay when they are included in the same PAYE scheme.

6. Figures in the table are rounded to one decimal place. Percentages are calculated using unrounded figures.

Background

Income Tax is an annual tax on an individual’s income for a tax year (6 April to the 5 April the following year). It is the UK government’s largest single source of tax revenue. NICs are also paid in respect of earnings. Class 1 NICs are calculated based on earnings in each pay period and paid by both employees and employers. Class 1 NICs and Income Tax are deducted before an individual’s employer pays their wages. Employers use the PAYE system to calculate the deductions due to be paid. Employee’s NICs will stop once an individual has reached state pension age.

The amount of Income Tax an individual should pay, their tax liability, is determined by a number of factors; their level of income, the type of income and the level of allowance to which they are entitled.

Income Tax is collected by HMRC. The way in which Income Tax is collected is dependent on the type of income an individual has and the total income of that taxpayer.

For most individual taxpayers, Income Tax on employment income or occupational pensions is collected through PAYE where Income Tax is calculated and deducted from the taxpayer’s pay or pension before being paid over directly to HMRC by the employer or pension provider. The self-employed and those with particularly complex or high incomes pay Income Tax through the Self Assessment system.

These statistics relate to tax on pay which has been collected through PAYE.

Changes to the data

There have been no changes to the data.

Data source and collection

Data used in the Income Tax deducted from pay table comes from a 1% sample of an HMRC departmental administrative source.

The National Insurance and PAYE Service (NPS) is a system used by HMRC to collect and account for Income Tax on earnings from employment and pensions. Income Tax and NICs are deducted by the employer and paid over to HMRC on behalf of the individual for each pay period.

NPS was introduced in July 2009 bringing together the National Insurance Recording System (NIRS) and PAYE elements of Computerisation of PAYE (COP). The relevant data to produce these statistics was previously held within NIRS. The move to NPS did not impact on the coverage of these statistics.

Up to tax year 2013 to 2014, tax on pay was reported by employers to HMRC on a P14. Form P14 is an End of Year summary for an employment that is submitted by the employer to HMRC, showing pay, tax and NI contributions for the year. The employer provides similar information to the employee on an end of year certificate, form P60.

In April 2012, HMRC began a phased introduction of Real Time Information (RTI). The Income Tax (Pay As You Earn) Regulations 2003 were amended to reflect reporting in real time. Under RTI, information about tax and other deductions under the PAYE system is transmitted to HMRC by the employer every time an employee is paid. Employers using RTI are no longer required to provide information to HMRC using Forms P35 and P14 after the end of the tax year, or to send Forms P45 or P46 to HMRC when employees start or leave a job.

Since tax year 2014 to 2015, tax on pay has been taken from RTI PAYE end of year summary information.

Tax on pay reported on P14 and on the PAYE end of year summary information can relate to pay or occupational pensions. In the majority of cases it is possible to identify whether the PAYE amount relates to pay or pension by looking at the PAYE scheme. Some PAYE schemes include both pay and pension. In some such cases we cannot distinguish pensions from pay and therefore a small amount of tax on occupational pension is included within the published figures.

Industry allocation methodology

Each payment submission submitted by the employer is associated with a PAYE scheme. The Inter-Departmental Business Register (IDBR) contains information about PAYE schemes including industry. Each payment submission is assigned to an industry by matching PAYE scheme to IDBR.

Industry classification

The industry groups used in the table are based on the UK Standard Industrial Classification of Economic Activities. The classification was updated in 2003 and 2007. All industry detail for years up to tax year 2006 to 2007 is based on SIC2003. For tax year 2007 to 2008, results are presented on both SIC2003 and SIC2007 bases for comparison of changes in classification. The industry detail for tax year 2008 to 2009 onwards is based on SIC2007 only.

Employers’ PAYE schemes are sometimes restructured or reclassified. Tax for a small number of employees may not therefore be included in the same industry group in all years.

Section letters and descriptions are provided in the tables and full detail can be found by referencing relevant ONS indexes.

Other Income Tax statistics publications

In addition to Table 2.10, HMRC publish statistics on Personal Incomes statitsics, Income Tax liabilities statistics, Earnings and Employment statistics from RTI and Income Tax receipts statistics.

Table 2.10 shows the distribution of Income Tax deducted from pay by employers, based on the industrial classification of the employer. In PAYE, the amount of tax deducted is determined by the income in that employment and the application of a tax code that may reflect not just the personal allowance but also a range of coding allowances for such things as non-pay income, deductions, reliefs and over/underpayment of tax for previous years.

In some cases, adjustments will be needed after the end of the tax year to ensure the correct liability is charged. So the figures in Table 2.10 may not match the liability figures in other tables.

Estimates may differ from Income Tax receipts statistics due to timing effects. Receipts are reported by tax year received by HMRC whereas tax deducted is recorded against accrued pay period.

Glossary

Income Tax liabilities

The amount of Income Tax liabilities in this publication is the amount of tax due on incomes arising in a given tax year, and is different from the amount of tax receipts collected in a financial year.

Income Tax receipts

The amount of Income Tax collected by HMRC. This publication measures the amount of Income Tax liability for a tax year, but not the amount of receipts in the financial year. The Income Tax receipts are amounts paid and collected in a given financial year.

National Insurance Contributions

National Insurance contributions are tax on earnings paid by employees and employers. NICs will be taken off along with Income Tax before an individual’s employer pays their wages. Employee’s NICs will stop once an individual has reached state pension age. The amount of Income Tax in this publication does not include NICs.

Industry

Industry categories are based on UK Standard Industrial Classification of Economic Activities.

National Insurance and PAYE System (NPS)

NPS is the computer system HMRC uses to administer PAYE. It replaced the COP system and brought it together with the National Insurance Recording System (NIRS).

Computerisation of PAYE (COP)

The computer system which used to administer PAYE until it was replaced by NPS.

National Insurance Recording System (NIRS)

The computer system used to monitor payment of National Insurance contributions and to calculate and prove entitlement to contributory benefits. These include Job Seekers Allowance (JSA) and the National Insurance Pension. It provides contribution information to a number of government departments.

Pay As You Earn (PAYE)

PAYE is the system employers and pension providers use to take Income Tax and NICs before they pay wages or pensions to employees and pensioners. This publication relates to employees only and not pensioners. Income Tax and NICs are deducted by the employer and paid over to HMRC on behalf of the individual for each pay period.

Personal Allowance

The amount of income you can receive for the tax year without having to pay tax on it.

P14

Form P14 is an End of Year summary for an employment that is submitted by the employer to HMRC. In April 2012, HMRC began the phased introduction of RTI. Employers using RTI are no longer required to provide information to HMRC using Form P14 after the end of the tax year.

Real Time Information (RTI)

RTI is the admin system through which tax and other deductions under the PAYE system is transmitted to HMRC by the employer every time an employee is paid.