Britons In Top Tax Bracket Pay Up To Half Of Salary In Tax

by Jason Gorringe, Tax-News.com, London

07 September 2004

The average UK higher rate taxpayer is currently seeing half of his salary disappear in taxation according to a recent study.

According to figures published by accounting firm Smith & Williamson, a family man with two children who earns £40,000 per annum is paying up to 50p in the pound to the Treasury through a combination of direct and indirect taxation, the Daily Telegraph has reported.

It is claimed that said family man would have been paying just 35p in the pound when the Labour government came to power in 1997. Meanwhile, a man in similar family circumstances earning £25,000 per year is now paying 38p in the pound in combined taxation, up from 33p in 1997.

However, the Smith & Williamson report explains that the rising tax burden has affected some groups more than others depending on a range of other factors and lifestyle choices.

"Some people may have been worse hit, while others will have fared better,” Francesca Lagerberg of S&W observed in the Telegraph report.

“For example, if you drive more than 8,000 miles a year, which is approximately the national average distance according to the AA, your relative tax bill is likely to increase,” she noted.

Heavy smokers are also likely to be paying significantly more in tax, she stated.

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