Do you pay more tax than others?

You’ve almost certainly looked at how much tax you pay and nearly fallen over backwards in shock!

Have you ever wondered who pays what and how you compare to others when it comes to handing over your hard-earned cash to Mr Tax Man?

Tax comparison statistics

Check out these statistics from Her Majesty’s Revenue and Customs aka HMRC.

  • There are 30.6 million individual income tax payers.
  • There are 27.4 million non-higher rate tax payers (89.6% of all tax payers) and 3.19 million higher rate tax payers (10.4%).
  • Relative to total income before allowances, deductions and reliefs, average rates of tax were 12.5% for basic rate tax payers and 27.0% for higher rate tax payers.
  • The richest 25% of tax payers by total income accounted for 70% of the total tax paid.
  • The richest 50% of tax payers by total income accounted for a 77.1% share of total income and 88.4% of tax liabilities.
  • The richest 1% of tax payers by total income accounted for a 13.9% share of total income and 24.1% of tax liabilities.
  • 90.5% of tax liabilities were due on earnings, 7.1% on dividends and 2.4% on savings.
  • 59.4% of tax liabilities were due on taxable incomes falling within the basic rate tax band; 40.6% in the higher rate band; and 0.1% in the starting rate band.

Wow…those are some jaw dropping stats, particularly if you’re a higher rate tax payer.

If you weren’t disgruntled before, you probably are now!

Whichever tax bracket you fall into, what options do you have to reduce your tax liability? Find out How to Reduce Your Tax Liability: Venture Capital Trusts

How shocked were you when you read the HMRC statistics? Let us know below.

Sources: HMRC December 2013; Cabinet Office December 2013

Legal & Medical Investments Ltd is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate tax advice. The tax reliefs referred to are those currently applying in the United Kingdom to UK Tax Residents. These tax reliefs are liable to change. The value of any tax relief available will depend upon the individual circumstances of the taxpayer.

This article was written by Tim Haddon

Tim has been a financial adviser to doctors and dentists since 1988 and joined Legal & Medical Investments in 1999. He is based in the Somerset and Devon area, and holds the Diploma for Financial Advisers (DipFA®) and the Certificate in Financial Planning (Cert PFS, formerly FPC).

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