New research suggests that the UK has one of the highest tax burdens for both low and high earners of ‘any major economy’, according to UHY Hacker Young.
New research suggests that the UK has one of the highest tax burdens for both low and high earners of ‘any major economy’, according to UHY Hacker Young.
The firm calculated the personal taxes and social security contributions payable by single taxpayers with no children, earning US $25,000 and $200,000 respectively, and found that in both cases the UK ranks seventh out of 19 countries surveyed.
A comparison with the other G8 countries puts the UK in fourth place behind Germany, France and Italy.
A UK taxpayer earning $25,000 would keep 83% of his income, while the net pay for someone earning $200,000 would be almost $122,000 or 61% of the gross salary, the research shows.
Mark Giddens, Private Client Partner of UHY Hacker Young in the UK, said: ‘The government is now facing a difficult dilemma. Achieving a more sustainable fiscal position will be difficult without raising taxes, but higher taxes are likely to hinder economic growth.
‘The 50% tax rate on people earning more than £150,000 a year, combined with increases in national insurance, has undoubtedly made the UK less attractive to high earners. Many of these people will be highly skilled and they are usually very mobile. The UK risks losing skills and capital if high earners are taxed significantly more than competitor countries.’
The Daily Telegraph quoted Francesca Lagerberg, Grant Thornton’s Head of Tax, as saying that the figures provide ‘evidence of the detrimental effect of high tax rates on high earners’.
Lagerberg added: ‘For Britain to be competitive, action is needed to discourage a brain drain.’
Employers’ NICs
The Federation of Small Businesses has urged the government to extend the NICs holiday to existing firms with up to four members of staff that take on up to three new employees.
‘Small businesses want to employ but have told us that they need incentives to do so,’ said the FSB’s National Chairman, John Walker. ‘The Government must extend the NICs holiday to existing businesses if small firms are to take on new staff and so help tackle high unemployment.’
New research suggests that the UK has one of the highest tax burdens for both low and high earners of ‘any major economy’, according to UHY Hacker Young.
New research suggests that the UK has one of the highest tax burdens for both low and high earners of ‘any major economy’, according to UHY Hacker Young.
The firm calculated the personal taxes and social security contributions payable by single taxpayers with no children, earning US $25,000 and $200,000 respectively, and found that in both cases the UK ranks seventh out of 19 countries surveyed.
A comparison with the other G8 countries puts the UK in fourth place behind Germany, France and Italy.
A UK taxpayer earning $25,000 would keep 83% of his income, while the net pay for someone earning $200,000 would be almost $122,000 or 61% of the gross salary, the research shows.
Mark Giddens, Private Client Partner of UHY Hacker Young in the UK, said: ‘The government is now facing a difficult dilemma. Achieving a more sustainable fiscal position will be difficult without raising taxes, but higher taxes are likely to hinder economic growth.
‘The 50% tax rate on people earning more than £150,000 a year, combined with increases in national insurance, has undoubtedly made the UK less attractive to high earners. Many of these people will be highly skilled and they are usually very mobile. The UK risks losing skills and capital if high earners are taxed significantly more than competitor countries.’
The Daily Telegraph quoted Francesca Lagerberg, Grant Thornton’s Head of Tax, as saying that the figures provide ‘evidence of the detrimental effect of high tax rates on high earners’.
Lagerberg added: ‘For Britain to be competitive, action is needed to discourage a brain drain.’
Employers’ NICs
The Federation of Small Businesses has urged the government to extend the NICs holiday to existing firms with up to four members of staff that take on up to three new employees.
‘Small businesses want to employ but have told us that they need incentives to do so,’ said the FSB’s National Chairman, John Walker. ‘The Government must extend the NICs holiday to existing businesses if small firms are to take on new staff and so help tackle high unemployment.’
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