Poorest Households in the UK Lose Half of Salary to Tax

December 22, 2014 Taxation in UK

LONDON – The lowest earning taxpayers in the UK pay a disproportionately high amount of taxes compared to their income levels, losing as much as half of their salaries to taxation.

On December 22nd the UK non-government organization the Taxpayers’ Alliance issued a new report detailing the difference in the amount of taxes paid by the low- and high-incomes earners in the UK.

The experts of the Taxpayers’ Alliance showed that households in the top 10 percent earning households in the UK pay an average of GBP 30 023 more in taxes than they receive back in benefits and tax breaks.

These richest households earn approximately 27 times more than households in the lowest 10 percent, however, after tax payments are taken into account they earn only 5.8 times more than the lowest earners.

Conversly, the lowest earning 10 percent pay an average of 47 percent of their income in taxes, the highest proportion of any group.

The high tax burden faced by low-income earners was attributed to the high rates of indirect taxation, such as VAT, fuel duties, and council tax, and any increase to these taxes will even further deteriorate the financial position faced by the country’s poorest households.

Photo By: ItzaFineDay