UK’S highest earners are being clobbered with the sixth highest overall tax burden in the world, data showed today, dampening the incentives to work and invest in the UK.
UK citizens earning the equivalent of $1.5m (£936,900) in a year take home just $749,600 after taxes and social security contributions, the report from UHY Hacker Young revealed, just under half of their gross pay. This makes the UK’s tax burden the sixth heaviest in the world, the auditor said, ahead of Germany, Canada, and the USA, but behind five Eurozone countries.
Of these five euro area nations France topped the chart followed by Italy, the Netherlands, Ireland and Spain. France led the table by a wide margin – even before President Francois Hollande’s tax hikes – leaving those earning $1.5m with just 45.9 per cent of their gross earnings.
However not all income groups faced such high duties – those on the equivalent of $25,000 took home 83.9 per cent, placing the UK 11th best in the world. And even at $200,000, the UK placed 18th, as this group paid an average 39.2 per cent of their income in taxes and compulsory contributions.
Mark Giddens at UHY warned that the high burden could make the UK uncompetitive in attracting highly mobile top earners.
“A high personal tax burden makes it difficult for the UK to attract and retain the most experience and skilled workers and entrepreneurs,” Giddens said, “High earners are the biggest contributors to the Treasury, and shouldn’t be taken for granted – high taxes will put off skilled workers from coming to the UK.”
This came in tandem with data from the British Retail Consortium suggesting next April’s planned rise in business rates could drive firms to cut investment and job creation.