The Bottom 10 per cent of Earners in Britain are Paying Half of their Income in Tax

Section: Members Highlights / Tax Facts / WTA Blog
2 July 2018 | Taxpayers’ Alliance (TPA) / United Kingdom
United Kingdom


New analysis by the TaxPayers’ Alliance shows that the bottom 10 per cent of earners in Britain are paying half of their income in tax, which is a dramatic increase on the previous year.

The analysis, using Office of National Statistics data, demonstrates that much of the rhetoric around “lifting people out of taxation” or “ensuring that those with the broadest shoulders bear more of the burden” is based more on perception than reality.

Key findings:

  • In 2016-17, the bottom 10 per cent of households paid an average of 49.5 percent of their gross income in taxes. This is an increase from 42 per cent in 2015-16.
  • Of the 49.5 per cent of tax that the bottom 10 per cent paid, 43 per cent of this is made up of VAT and Council Tax
  • The top 10 per cent of households paid an average of 33.8 per cent of their gross income in taxes. This excludes benefits in kind, such as travel subsidies, education and the NHS.

John O’Connell, Chief Executive of the TaxPayers’ Alliance, said:

“The reality of the tax system makes a mockery of the lazy socialist trope that we can simply tax the rich more. The highest earning 1% in the UK pay an estimated 28% of all income tax.  But what is also clear is that taxes tend to hit the poorest families hardest. The lowest earners in Britain pay more than 49% of their income in tax, leaving them with less and less at the end of the month to pay for life’s necessities.”

“The tax burden is about to hit a 50 year high, and the government are yet to disclose how they will pay for their pledge to give the NHS an extra £20 billion a year. The chancellor should reconsider plans to increase the tax burden on families and instead introduce automation in the public sector and make spending reductions in other areas, including foreign aid and scrapping the pointless HS2 project.”

Click to see full analysis.