Just 100,000 Brits pay a quarter of all income and capital gains tax
Britain’s top 100,000 taxpayers paid almost a quarter (24 per cent) of all income and capital gains tax in 2021/22, new data has revealed.
The UK’s top 100,000 taxpayers, making up 0.3 per cent of the total number of taxpayers, footed an average income and capital gains bill of £559,000 each, up 18 per cent from the year before, according to a freedom of information request obtained by retail investment firm Wealth Club.
Meanwhile, the top 100 taxpayers paid an average of £46m each in income and capital gains tax, up 14 per cent from the previous year.
Wealth Club said the overall income and capital gains tax take from the top 100,000 had risen by 45 per cent in five years.
“It is commonly claimed that wealthy individuals do not pay their fair share of tax. These figures prove what a myth that is,” said Alex Davies, the founder of Wealth Club. “The message is clear for politicians of all persuasions when deciding future tax policy – tread very carefully.”
He added: “The wealthy are a mobile bunch, proven by the fact that an estimated 3,200 millionaires are expected to leave the UK this year. And they pay a significant proportion of the UK’s tax.
“If the top 100 taxpayers up sticks and move to sunnier tax climates, that would be £4.6bn less in tax receipts. If the top 1,000 taxpayers migrated out of the UK, that figure would rise to £11.5bn, leaving a massive gap in the country’s finances.”
Wealth Club’s warning comes after a YouGov poll earlier this year found three-quarters of Britons supported the introduction of a wealth tax. However, research by campaign group Patriotic Millionaires published in March showed that around two-thirds of UK millionaires actually held the same view.
The Chancellor Jeremy Hunt announced a raft of what he described as tax cuts at the Autumn Statement.
However previously announced freezes to tax thresholds will more than counterweigh those measures and result in Brits lumbered with the highest tax burden in more than seventy years.
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “High taxes are damaging growth, squeezing household budgets and risking an exodus of high-value taxpayers.”
“There’s a danger that some of the biggest contributors leave the UK for friendlier countries and take jobs and businesses with them. Ministers should work to create a simpler and more competitive tax regime to benefit all taxpayers,” he added.
A Treasury spokesperson told City A.M.: “Our approach to delivering fiscal sustainability is underpinned by fairness.
“The UK’s taxes on wealth are on par with other G7 countries, and our system is progressive, with the top one per cent of income taxpayers expected to contribute over 28 per cent of its total in 2023-24.”