This week around 24 million taxpayers started receiving a new personal Annual Tax Summary showing much income tax and national insurance they pay and how that money is spent.

Between now and Christmas, 16 million of these paper summaries will land on people’s doormats.  In addition, around 8 million people in Self-Assessment will be able to view their tax summary after they have filed their tax return.

You can also go online at or download the HMRC app, fill in your salary and get the same information.

The information is fascinating.  Someone on the average salary in the UK - £26,500 a year - would pay just over £5,500 a year in tax and national insurance, or 21p in every pound.  Of course, they will pay more through indirect taxes.

Actually, the amount of tax they have to pay is significantly lower thanks to the Government raising the threshold at which income tax is payable to over £10,000 a year.  This has taken over 4,300 people out of tax altogether in my constituency and reduced the annual tax bill for another 41,700 people by around £700.

Of the tax the average earner pays, by far the biggest share - well over a third, or 37 per cent - is spent on pensions and welfare, though some of this will come back to many people in the form of tax credits.

After that the next biggest item is health, accounting for nearly a fifth of the average earner's tax and costing over £1,000 a year.  The third biggest item is significantly smaller - education, accounting for 13 per cent of tax, or £700 a year.

But guess what the fourth largest item of expenditure is.  Defence?  Local government?  Transport?  Law and order?

No: it's interest on the national debt, accounting for £400 of the direct tax the average earner pays.  That underlines the importance of dealing with the deficit and getting the debt down.

I made two more topical discoveries.  The amount spent on overseas aid?  Less than £50 a year of the average earner's direct tax bill, or under 1 per cent.  The amount going to the EU Budget is, I'm pleased to say, even lower.

The Annual Tax Summary is a revolution in transparency.  It will make us all more aware of where our hard earned money is going - and make governments more accountable for how taxes are spent.

Christopher N Howarth