Tax Freedom Day Has Fallen in the UK

May 30, 2018 Taxation in UK

Tax Freedom Day UKLONDON – The time it takes the average taxpayer to cover their tax bill has shrunk since last year, however, the government is still outspending its own incomes.

Each year the UK think-tank, the Adam Smith Institute, calculates and publicizes the date of Tax Freedom Day, which will fall on May 29th in 2018.

Tax Freedom Day is a commonly used theoretical measure aimed at illustrating the extent of the tax burden in a country.

The date is calculated through examination of total tax receipts expected to be seen in a country and the total production in the same country, all over the course of the same year.

Tax Freedom Day is commonly described as the date at which taxpayers will have earned enough to pay their annual tax obligations, and will be able to start working for themselves.

In this year, the date of Tax Freedom Day falls 148 days into the year.

In 2017 the date was 3 days earlier, meaning that in 2018 the tax burden faced by the UK has risen.

The Adam Smith Institute has noted that the date of Tax Freedom Day in 2018 is the highest since 1995, which is as far the currently used dataset extends.

Further, the Adam Smith Institute noted that the Cost of Government Day, the day at which taxpayers have paid enough to cover the government’s spending, is in late June.

While the difference between the Tax Freedom Day and the Cost of Government Day has shrunk since 2008, the government is still spending beyond its own means.