We often hear politicians, especially those on the Left, on TV and radio blithely announce that the better off in society need to pay their fair share. The obvious implication is that they currently don’t.
Recent figures reveal just how out of touch this view point is.
Almost a quarter of all income tax and capital gains tax was paid by just 100,000 individuals who shelled out a total of £55.9bn, despite representing only 0.3% of taxpayers
The UK’s top 100,000 taxpayers footed an average income and capital gains tax bill of £559,000 each in 2021/22, up by 18% from £475,000 in the previous year. These taxpayers also paid almost a quarter (24.1%) of HMRC’s annual take from these taxes, despite accounting for just 0.3% of UK taxpayers.
The top 100 taxpayers in the UK collectively paid a record £4.6bn of income and capital gains tax in 2021-22, the equivalent of £46m each, and representing 0.02% of the total income tax and CGT collected. This was more than double the amount paid in 2017-18 when the figure totalled £2.1bn. In 12 months alone there was a 14% increase from £3.9bn paid in 2020-21.
It is often claimed by politicians especially that wealthy individuals do not pay their fair share of tax. These figures prove what a myth that is.
The overall income and capital gains tax take the top 100,000 people are paying has risen by 45% in just five years, meaning not only are they paying more, but they are shouldering more of the increasingly heavy burden.
This is a dangerous strategy as the wealthiest individuals can relocate or reduce the amount of time spent in the UK, so they are no longer liable for UK taxes.
The wealthy are mobile, 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 and any exit would leave a massive gap in the UK finances.