The government of the United Kingdom, like that of many other countries, raises funds to spend on public services linked to the tax system. Taxes are levied by two different levels of government, HMRC, Her Majesty's Revenue and Customs, and local governments, such as Barnet, Islington, Camden, Haringey, among other twenty-nine local authorities in London, for example. While HMRC deducts taxes via income tax, national insurance contributions, VAT, corporation tax and fuel duty, local governments are responsible for business rates, tax housing and other costs, such as street parking. In turn, the money deducted for tax purposes is used to improve the health, education, social services and social security system. There are different types of taxes depending on the circumstances. For example, you must earn above a certain threshold to qualify for income tax and if you are self-employed you may be entitled to reclaim a large proportion of your VAT (BBC, 2009). Although in the UK relative poverty is more prevalent than absolute poverty, this does not mean that it is a problem that should be left aside. The immense difference between the income of a rich and a poor person addresses the issue to be understood from its causes to its reduction or, optimistically, its elimination. The UK tax system is used to attempt to achieve both horizontal and vertical equity, thereby reducing inequality and poverty. Horizontal fairness means that people in the same financial situation are able to pay taxes on the same basis and should be charged the same rate. At the same time, vertical equity suggests that individuals in diverse financial situations have different abilities to pay taxes, so that taxes represent final income, thereby reducing the difference between rich and poor. Generally speaking, the UK's tax system can be said to attempt to reduce inequality and poverty, although many consider it to be an unclear and unfair system. Tax scams and other tax avoidance measures are symptoms of a wider malaise within a regime that needs to be more transparent and fairer (Telegraph View, 2014). However, for the lowest paid employees, its effectiveness is seen through the income tax, which will take between 10 and 20% of their final income, compared to 40 to 50% for the highest paid employees. In addition, measures such as the national minimum wage and benefits in kind ensure that lower-paid people benefit from a minimum level of payment as well as services that might not be as easily accessible to them as to people rich..