Lib-Dems Call For Major Changes To UK Tax System

by Amanda Banks, Tax-News.com, London

29 April 2002

Commenting on the release of government figures last week which showed that the United Kindom's lowest earners pay a higher percentage of their income in tax than more wealthy taxpayers, Liberal Democrat Treasury Spokesman, Matthew Taylor called for a 'radical overhaul' of the UK tax system.

'People expected taxes to go up under Labour to pay for public services, but they certainly didn't expect the poor to be hit harder than the rich,' he observed, adding that: 'The British tax system needs a radical overhaul to make it fairer, not the endless tax fiddles that Gordon Brown delivers.'

The House of Commons Library note showed that although wealthy taxpayers pay more in income taxes, the poor are disproportionately affected by Council Tax, VAT, and petrol and tobacco duties.

It was revealed last week that the poorest quintile of the UK population has an average gross annual income of around £8,425, of which 41% (£3,452) goes on taxes. The wealthiest fifth of UK households, on the other hand, earn around £55,848 per year, but part with a smaller proportion - 35%, or £20,157 - of that income.

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