Tax Freedom Day Has Come in the UK

May 29, 2014 Taxation in UK

Tax Freedom DayLONDON – Tax Freedom Day has finally arrived for taxpayers in the UK, although, in reality, the day would come a full month later if the full extent of the government’s borrowing was taken into account.

Tax Freedom Day in the UK fell on May 28th this year, and workers in the country have now earned enough to pay off their tax obligations for this year, according to research completed by the non-government organization Adam Smith Institute.

This year Tax Freedom Day fell 147 days into the year, 3 days sooner than in the previous year, when the date was May 31st.

The experts of the Adam Smith Institute pointed out that while the date of Tax Freedom Day is marginally earlier this year, the overall picture is rather different over the long term, as fifty years ago the date was nearly a month earlier.

It was also noted that the Tax Freedom Day calculation does not take into account the fiscal impact of government borrowing, and, according to the Institute, the UK takes on nearly GBP 1 of sovereign debt per GBP 5 of tax revenues earned, an amount which will eventually need to be repaid though higher taxes.

If the calculation factored in this full extent of government debt, Tax Freedom Day would not come until June 26th this year.

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