UK Tax Freedom Day,Today

May 30, 2012 Taxation in UK

Tax Freedom DayLONDON – Today is Tax Freedom Day in the UK, and taxpayers will now be working for themselves and not for the tax collector.

In 2012 the Tax Freedom Day in the UK falls on May 29th, two days later than last year, according to the independent UK think-tank the Adam Smith Institute. Calculations carried out by the Institute show that an average UK taxpayer needs to work 149 this year in order to raise the funds needed to pay his annual tax obligation, including all direct and indirect taxes.

Explaining why the Tax Freedom Day has come later this year, the Adam Smith Institute confirm that the UK economy has been slowing, and wage growth for the average taxpayer has being outstripped by tax increases, such as fuel duty and value added tax hikes, instated during the course of 2011 and 2012.

The Tax Freedom Day date only takes into account the government’s tax collections for the year, and does not include any government borrowing or budget deficits. But, according to the Adam Smith Institute, the UK government takes on one pound of extra debt for every four pounds raised from tax collections, and if the Tax Freedom Day calculations also counted this borrowing the date would shift to 23rd June.

Tax Freedom Day is a hypothetical measures which calculates how long the average taxpayer would need to work in order to completely meet all of their tax obligations for the year.

Photo by Newtown grafitti