So you think you know your tax rates

We all know the rate of VAT. We all seem to have a fairly good understanding about rates of income tax. But when it comes to national insurance, there's muddle and confusion.

Jobs & Money took to the streets, conducting a pre-Budget survey on tax rates. We asked first about income tax rates - on the day they stood at 10% on the first £1,880, base rate tax on the next £27,520 at 22% and higher rate tax for those earning over £29,400 at 40%. The vast majority know about the top rate, but fewer understand the lowest, 10% rate. There was also anger over the increasing numbers now falling into the higher rate band.

Lucy Goodwin, a 27-year-old press officer said: "A salary of £35,000 is too low to pay 40% tax these days. The bands should increase with inflation as £35,000 is no longer worth what it was when they introduced the higher rate band."

When it came to VAT there was almost unanimous understanding about how much you have to pay.

But things got tricky when we asked about national insurance. The current rate for those earning £87-£575 per week is 10%. Just over half of those asked knew that they were taxed at 10% for NI. Many others had no idea.

All those interviewed believed the money broadly went to the NHS. But others were suspicious that it is simply another tax that goes into the broad tax pot.

Charlotte Robertson, 31, said: "National insurance should pay for healthcare. But I think it's really a stealth tax for middle class earners, like me, who have private healthcare as well."

Finally, we asked if people would prefer NI to be rolled into income tax to create one single deduction. Most were in favour. Jeremy Richardson, 36, a strategy analyst said: "It makes more sense to have one tax. It all goes to the government."

Charlotte Robertson

Age: 31

Occupation: Human resources manager

What is the rate of income tax? I should know this. Base rate is 10%. Then it goes up to 22%, then 40%.

What is the current rate of VAT? 17.5%.

What is the rate of national insurance? Has it gone up from 9%? Actually I think it is 10%.

Why do you have to pay national insurance? Good question. I'd like to put that to Tony Blair. It pays for health. But really I think it is a stealth tax for the middle class earners, like me, who have bought private healthcare as well. It's an extra tax for the government to spend.

Would you rather pay a single tax that combines both income tax and national insurance? I would prefer to pay a single tax - you'd know where you'd stand. I'd rather they had one rate that comes in at different bands of salaries as there are too many stealth taxes in this country.

Lucy Goodwin

Age: 27

Occupation: Press officer

What is the rate of income tax? Depends on your earnings. The rate of income tax has stayed the same if you're earning above £35,000 - £40,000 for years. You are charged at 40%. The threshold should grow with the rate of inflation, £35,000 is too low a salary to be charged 40% tax.

What is the current rate of VAT? 17.5%.

What is the rate of national insurance? I've got no idea.

Why do you have to pay national insurance? National insurance, I think, is the contributions towards health and public services, like education. It's a basic tax for public services.

Would you rather pay a single tax that combines both income tax and national insurance? It makes no difference. But, having one tax may be be more transparent. Although and tax and transparency are two words that don't go together.

Shaun Doyle

Age: 24

Occupation: Personal trainer from Melbourne, Australia, who works in a gym here

What is the rate of income tax? It's about 25% I'd say off the top of my head.

What is the current rate of VAT? I've got no idea.

What is the rate of national insurance? I pay around £120 a month, so that's about 11% or 10%.

Why do you have to pay national insurance? It's for the healthcare system in this country.

Would you rather pay a single tax that combines both income tax and national insurance? I don't mind really. It explains clearly why you pay two taxes, it makes it seem less of a lump sum I suppose.

Jeremy Richardson

Age: 36

Occupation: Strategy analyst

What is the rate of income tax? It depends on whether you are on the base rate or top rate. I think the base rate is 23% and 40% for the top.

What is the current rate of VAT? 17.5%.

What is the rate of national insurance? I don't know ex actly, somewhere in the region of 10% up to £32,000 of your income, or something like that.

Why do you have to pay national insurance? Why? Well it goes towards unemployment benefit and state pensions.

Would you rather pay a single tax that combines both income tax and national insurance? A single tax makes more sense because it all goes in to the government anyway, may as well lump it together.

Kenneth Leon

Age: 52

Occupation: Sales executive

What is the rate of income tax? I think it's about 9%.

What is the current rate of VAT? 17.5%.

What is the rate of national insurance? I think it's about 24% or thereabouts.

Why do you have to pay national insurance? It's for health care.

Would you rather pay a single tax that combines both income tax and national insurance? I like it separate because at least you know what bit is going towards what. You know what your money is being used for.

Andrew Flowers

Age: 30

Occupation: Business development manager

What is the rate of income tax? There are two. The lower rate is 22% and the higher rate is introduced if you earn more than £32,000, at 40%.

What is the current rate of VAT? 17.5%.

What is the rate of national insurance? I think the employee pays 10% and the employers pay 11.5%.

Why do you have to pay national insurance? I've always thought it is because of pensions and public services like the NHS and that's what I'd say it's for.

Would you rather pay a single tax that combines both income tax and national insurance? Well they are proposing to abolish the ceiling for national insurance so it will become like another income tax. I would say it was fairer to pay one tax.

John Barker

Age: 59

Occupation: Paper salesman

What is the rate of income tax? What now? I'm not sure.

What is the current rate of VAT? I don't pay VAT so I don't know anything about that.

What is the rate of national insurance? Ah I forget what I pay now - I'm not sure.

Why do you have to pay national insurance? It's mainly for the NHS.

Would you rather pay a single tax that combines both income tax and national insurance? I'd rather a single tax, I think low earners would benefit from that.

Scott Paris

Age: 36

Occupation: Sales executive

What is the rate of income tax? Well it varies doesn't it. Middle is 21%, then it goes up to 27% and then the top rate is 40%.

What is the current rate of VAT? 17.5%.

What is the rate of national insurance? 10%.

Why do you have to pay national insurance? Originally it was to pay for the NHS - I don't know where it goes now. They say they need more and what we pay isn't enough. I think we're paying off the huge bill for the Millennium Dome.

Would you rather pay a single tax that combines both income tax and national insurance? I'd rather not pay any tax. But I think a single tax that stopped stealth taxes would be a good idea.