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 analysis has been released as a result of a Freedom of Information request made by Wealth Club to HMRC in November.
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. 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.
In total, tax paid by all UK income and CGT taxpayers was £232.7bn in tax year 2021-22, up by over £40bn from £190bn in 2017-18.
The share paid by the wealthiest is likely to rise significantly when the effect of frozen thresholds and the lowering of the 45% additional rate tax entry point to £125,140, which came into force on 6 April 2023, is included in the figures. Already this tax year, HMRC has raised nearly £50bn more in taxes than the same period the previous year.
Alex Davies, founder of high net worth investment service, Wealth Club said: ‘It is commonly claimed that wealthy individuals do not pay their fair share of tax. These figures prove what a myth that is.
‘In fact, 100,000 people paid £55bn in tax, a staggering 24% of all income and capital gains receipts, despite making up just 0.3% of taxpayers.
‘Moreover, the overall income and capital gains tax take they 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.
‘Meanwhile the top 100 people in the UK paid on average over £46m each in tax, contributing 2% of the UK’s total income and capital gains tax receipts, despite accounting for just 0.0003% of the income and capital gains tax paying population.
‘The message is clear for politicians of all persuasions when deciding future tax policy – tread very carefully.’
Another factor for the wealthiest individuals is their ability to relocate or reduce the amount of time spent in the UK so they are no longer liable for UK taxes.
‘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,’ added Davies.
‘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.’
Source: https://www.accountancydaily.co/quarter-income-tax-paid-only-100000-people
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