Monday 20 November 2017

Today is 'Tax freedom day' in the UK - what is it?

Employees stop working to pay taxes and start earning cash to splash on themselves today, according to research by a think tank.

The so-called tax freedom day falls four days later than it did last year as Britons face greater state levies, the free market Adam Smith Institute said.

What is Tax freedom day?

The day when Britons pay off all the tax they owe to the government and start earning money themselves.


In 2016, it falls on 3rd June

Who calculates it?

The Adam Smith Institute

How do they calculate it?

Each individual's Tax Freedom Day will be different. But the Adam Smith Institute estimates a total figure based on the entire tax take of households (including those taxes that don't come directly out of earners' pockets) as well as account depreciation and foreign investment earnings

How does it change each year?

Tax Freedom Day falls four days later in 2016 than 2015, because, according to the Adam Smith Institute, "the state's share of the pie widens".

Its analysis found that tax receipts are projected to be 42pc of net national income this year and take workers 154 days to cover.

The date has fallen in June for the first time in 15 years, which raises a "red flag" that the tax burden is moving in the wrong direction, the institute said.

Director Eamonn Butler said: "The Treasury hates tax freedom day because they don't want us to know how much tax we really pay. They conceal the tax burden with stealth taxes that we don't even realise we're paying.

"But it's shocking that the Government takes over two-fifths of the country's earnings - and then borrows more. We work longer for the Government than mediaeval serfs had to work for their Lords.

"It is absurd that people on the minimum wage are liable for National Insurance Contributions, which raise their cost to employers and make it harder to move from benefits into work. The poor are also worst hit by regressive taxes like excise duties on what they buy."

The institute found that while net national income had increased by £34.6bn from 2015, the Government has taken up £35.4bn more in taxes, leaving Britons £1bn worse off than last year.

Conservative former Cabinet minister John Redwood said: "I think it is wrong that people have to work for the Government until June 3 and for their families and themselves for only a little over half the year.

"I want us to leave the EU so we have more of our own money to spend. The UK deserves a tax cut and leaving is the way to get it."

Belfast Telegraph

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