UK’s higher earners have one of world’s biggest tax burdens

HIGHER earners in the UK face one of the highest tax burdens in the world, according to figures from a Scottish accountancy firm.

Campbell Dallas LLP said out of 26 countries analysed, the UK had the ninth highest tax burden on those earning £125,000 and £160,000 per year, and the sixth highest for those earning £950,000.

Aileen Scott, tax partner at the chartered accountants, said: “The tax burden on the UK’s highest earners has become heavier and heavier over the past few years.

“The cut of the 50 per cent top rate of tax to 45 per cent can’t come soon enough for the UK’s highly skilled, highly motivated and highly mobile directors and entrepreneurs.”

She added: “However, Britain’s higher tax burden over the past few years has not just come through the temporary 50 per cent rate – but from increases in National Insurance and changes to allowances and reliefs.

“Those will not be reversed when the reduction to the 
45 per cent rate finally comes.” she said.

“The complex way in which governments layered on the tax burden on high earners also shows how complicated the UK’s personal tax system has become.

“High, complex and opaque taxes are making the UK uncompetitive internationally.”

However, some of the UK’s nearest neighbours were among those taxing their high earners more.

France took 54 per cent of income from people earning £950,000 of more, Italy 52 per cent, Ireland 52 per cent, the Netherlands 51, and Spain 50 – compared with 50.03 per cent taken by UK government taxes.