Thu, 30 May 2013

Tax Freedom Day arrives today

Tax Freedom Day - the day when the average UK worker finishes paying tax to the government and begins putting money in their own pocket - is today.

Right-wing think tank the Adam Smith Institute (ASI) has worked out that for 150 days of the year every penny the average person earns is sent to the Treasury.

The ASI calculates Tax Freedom Day by measuring local taxes, direct and indirect national taxes, and National Insurance contributions as a proportion of the UK’s net national income. This year that came to 41.5%, which is then mapped as a proportion onto the days of the year.

The ASI’s director, Eamonn Butler, said: “Tax Freedom Day, which the ASI has been calculating for 25 years, is the plainest way to show what the tax burden really is. That is why the Treasury hates it. They of course want to conceal how much tax we pay, which is why they are so keen on stealth taxes.

“But we put in every tax, including stealth taxes – income tax, National Insurance, council tax, excise duties, air passenger taxes, fuel and vehicle taxes and all the rest – and show just how long the average person has to work to pay their share of them all.

“The stark truth is that this burden costs us all 150 days of hard labour every year. That’s not how long a rich person has to work – it is the time the average person must labour for the tax collectors.

“In the Middle Ages a serf only had to work four months of the year for the feudal landlord, whereas in modern Britain people have to toil five months for Osborne’s tax gatherers.”

EU comparison

Nevertheless the ASI says UK taxpayers can thank policymakers that they will not have to wait until July, like France, to start earning for themselves. They will however remain jealous of American and Australian earners, who switch from paying into their chancellors’ bank accounts to their own by mid-April.

Conservative MP Steve Baker said the research highlighted the “shocking truth about taxes”.

“This doomsday machine of deficit spending, debt and currency debasement will eventually blow up and there is no kindness in pretending otherwise,” he said. “Politicians who are serious about the prosperity of our country and the wellbeing of the poorest within it should take note.”

Last year Tax Freedom Day fell a day earlier in the UK on May 29.

EU wide figures for 2010, the latest available, reveal that Tax Freedom Day fell first for Cyprus on March 13 and last for Hungary on August 6.

See also:

• Payroll 'quirk' means Asda staff owe HMRC £12m
• P45 internet submission problems continue
• HMRC: RTI launched as planned despite strikes and IT maintenance