The UK government, like the government of many other countries, raises funds to spend on public services towards the tax system. Taxes are raised by two different levels of government, HMRC, Her Majesty's Revenue and Customs, and local governments, such as Barnet, Islington, Camden, Haringey, among others, twenty-nine local authorities in London, for example. While HMRC deducts tax through income tax, national insurance contributions, VAT, corporation tax and fuel duty, local governments are responsible for business rates, council tax and other taxes, such as on-street parking. In turn, the money deducted for tax purposes is used to improve healthcare, education, social services and the social security system. There are different types of tax for different circumstances, for example, you have to earn above a certain limit to be entitled to income tax and if you are self-employed you may be entitled to claim back much of the VAT (BBC, 2009) . Although relative poverty prevails over absolute poverty in the UK, this does not mean that it is a problem that should be left behind. The immense difference between the income of a rich person and that of a poor person addresses the issue to be understood from its causes to its reduction or, optimistically, its abolition. The UK tax system is used as an attempt to achieve both horizontal and vertical equity, therefore reducing inequality and poverty. Horizontal equity moves away from the fact that people in the same financial situation can pay tax on the same basis and should be subject to the same rate. Meanwhile, vertical equity proposes that individuals in different financial situations have different abilities to pay taxes, so taxes represent… half the paper… of final income, shortening the difference between rich and poor. Overall, it can be said that the tax system in the UK attempts to reduce inequality and poverty, although it is seen by many as an unclear and unfair system. Tax scams and other avoidance measures are symptoms of a broader malaise in a regime that needs to be more transparent and fair (Telegraph View, 2014). However, for those in lower-wage employment, its effectiveness can be seen through income tax, which will deduct between 10% and 20% of their final income, compared to 40%-50% of those with higher wages. Furthermore, measures such as the national minimum wage and benefits in kind ensure that lower-wage individuals are provided with a minimum standard of payment and services that may not be as easily accessible to them as they are accessible to wealthy people..