A SHOCKING study by UHY Hacker Young has revealed that Elmbridge, Surrey, pays nearly £300m more in income tax than Glasgow, Scotland’s largest city.
Elmbridge has a population of 130,000, much smaller than Glasgow’s 600,000. However, the leafy commuter area pays £1.2bn in income taxes, considerably more than the £900m that comes from Glasgow.
The residents of London also pay a huge proportion of income tax. The capital’s bill was £33bn in 2010-11, three times higher than the combined contribution of Manchester, Leeds, Edinburgh, Merseyside and Birmingham.
Mark Giddens, head of the accountancy groups’s private client services, said the data drew attention to a huge and growing economic disparity between different parts of the UK. “There is a growing regional mismatch within England and Wales, with wealth and tax bills becoming concentrated within a handful of cities home to lucrative industries, or a collection of leafy suburbs”.
Both the current government and its predecessors have been publicly committed to rebalancing the UK economy towards areas with low earnings. Despite the deliberate relocation of public sector employment from London and the South East, earnings remain considerably higher than in other regions. Blackpool registered the lowest average individual income tax bill, at £2,490 per year, less than one sixth of the £16,100 paid by a typical Elmbridge resident.
Gross value added (GVA), which measures the value of goods and services, remains much higher in London than the rest of the country, with the South East firmly in second place. The GVA of London makes up 22 per cent of the UK economy, while the proportion has shrunk in all regions of northern England and Wales.
However, Aberdeen was cited as a rapidly growing source of income tax in Scotland, with a booming oil and gas industry drawing industry and high-paid jobs to the region. The average income tax bill has leapt by over £900 in the past five years, at twelve times the pace of the national average. “It’s now a major global energy hub and one of the pillars upon which the Scottish economy is built”, added Giddens.