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UK tax rate 'one of the highest'

The UK has one of the highest tax rates for both low and high earners out of nearly 20 major economies, research indicates.

This country has the seventh highest tax rate for people on less than 25,000 US dollars (£15,242) a year out of 19 countries, while it is also ranked seventh for the amount of tax it takes from people earning more than 200,000 US dollars a year (£121,900), according to accountants UHY.

Someone who was on the equivalent of 25,000 US dollars in the UK would get to keep only 83.2% of their income, compared with 100% if they earned it in Dubai, 95.7% in Ireland and just over 90% in Japan and the United States.

Only Germany, India, France, Italy, Estonia and Mexico take more tax and social security contributions from the low-paid than the UK.

Low-paid workers in Germany get to keep the lowest proportion of their pay at just 72.6%, followed by those in India at 74.7% and France at 75%.

High earners in the UK take home only 60.9% of their pay once they have paid tax, considerably less than the 87% they would keep in Russia and the 80.4% they would retain in Egypt, while Dubai is tax-free.

Italy has the highest tax rates for wealthy people, with workers on the equivalent of 200,000 US dollars able to keep only 54.1% of their earnings, while the situation is not much better in the Netherlands at 54.7% or Ireland and Germany at 56%.

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."


From Belfast Telegraph