According to the 'Adam Smith Institute', today 30th May 2011 is 'Tax Freedom Day' - This is the first day of this calendar year that the average Briton stops working to pay taxes and actually starts earning money solely for themselves.
All the money earned between the start of the year and May 29th, 149 days or 5 months, would be taken in taxes for the Government to support their spending.
It's taken an extra 3 days this year, compared to 2010. The main reason for this being the deficit fighting 2.5 percent increase in VAT from the start of the year.
If you were to break down these statistics regionally, Londoners take the longest (51 days) to pay off their taxes, whilst the Welsh spend the shortest time (35 days).
So, with more money going to the Goverment what is the effect on the deficit and underlying national debts? Unfortunately, the average Briton would have to pay their entire pay packet, before taxes, from one year and a halfs work to settle the books. A lot of hard work still to be done.
Commentators from the Adam Smith Institute note that with growth being as slow as revealed recently, a simpler, flatter tax system would benefit all, help growth and make the 'Tax Freedom Day' come earlier in future years. The Government has already signalled reforming the tax system, removing complexity and aims to merge income tax and national insurance over the coming tax years.
Remember the way the 'Tax Freedom Day' is determined is by the amount of tax you have to pay on average - with
30 million taxpayers in the UK, it is important to make sure you are paying the correct amount of tax, reclaiming any expenses that are allowable and if you are self employed - weighing up the benefits of incorporating.
Try our set of
tax calculators at www.uktaxcalculators.co.uk, or start by using some of our tax widgets below!
