Workers will learn exactly what their taxes are funding

INCOME tax payers will receive a breakdown of the total tax and national insurance they pay and details of where those revenues are spent from 2014-15, George Osborne is expected to announce in the budget tomorrow.

An initial group of 20m people – or two-thirds of earners – will receive a personal tax statement breaking down exactly what proportion of their income is paid to the state and what it is being spent on.

The government hopes to expand the scheme to all income tax payers in the following years as part of its drive to make the tax system more transparent and to convince voters of the need for public spending cuts.

In November, Treasury minister David Gauke outlined proposals for the tax, saying: “We plan to lift the lid on tax so that people understand how much they are paying, what their overall tax rate is, and what they should be paying, in the same way that the government has lifted the lid on what they are paying for.”

Specimen statements prepared by the Treasury show someone on £25,200 a year sees £5,702.12 of their income go to the Exchequer in direct taxation. Of that, the biggest proportion goes on welfare, which accounts for £1,900.71. This is followed by £992.91 for health and £743.26 for education.