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‘Super rich’ 3,000 pay 4.2% of UK’s income tax

The highest paid 3,000 people in the UK pay more income tax than the bottom 9m, according to government statistics which highlight the impact of the ‘super-rich’ on tax revenues say Harris & Co accountants Northampton #accountantsnorthampton

HMRC’s published statistics show that the top 10% of earners pay more than 55% of the total income tax. 

However, just under 3,000 people with a declared income above £2.7m will pay 4.2% of the total revenue from income tax in the current financial year, according to additional figures released by HMRC following a Freedom of Information (FoI) request.

The figures also suggest that the top 0.1% of workers, which equates to around 30,000 people with a minimum declared income of £670,000, pay 11.3% of all income tax.

In contrast, out of the total of 29.9m people who pay income tax in the UK,  nine million workers on the lowest level of pay contribute less than 4% of the total income tax receipts.

This is why the deficit is not fixing itself - too few people pay too little tax, meaning that the slightly better off have to pay way too much tax to subsidise them.

Take, for example, a lone parent on average earnings of £26,000 pa. They will pay £5360 in tax and NIC and their employer will pay a further £2484 in NIC, making a total paid to the Government of £7,844. On average though, that family unit will draw out £2,600 in NHS costs and £5,000 in education costs, leaving a small surplus of £244. The person may also get Tax Credits, but we"ll ignore this. The thing that people forget is that this person is also accruing entitlement to State pension and to put enough money aside for that will be at least £7000 pa. So there you have it, this person is taking £6756 out of the Government every year and leaving people who are only marginally better off to make up the shortfall.

And, of course, because there is no surplus, the Government has no money to pay off the vast debts racked up by first Blair/Brown and then the Coalition. To generate a surplus for this means that, unless Government expenditure is massively cut, the slightly better off will have to pay even more in taxes!

It is not a sustainable picture!

 

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