According to the non-ministerial department, total net income tax receipts for 2018/19 was estimated at £191bn, 6% higher than the previous year. Furthermore, UK citizens are paying almost 30% more income tax today than they did 10 years ago.
Pay As You Earn (PAYE) Income Tax receipts for 2018/19 are estimated to be £161.9bn, 4.95% higher than the previous year. Self-Assessment Income Tax receipts for 2018-19 are estimated to be £31.5bn, 11.39% higher than the previous year. Income tax repayments are estimated at £7.1bn.
“Despite successive governments making very public proclamations about reducing the income tax burden by repeatedly raising the personal allowance, the bare facts show as a nation we are paying more income tax than ever before,” AJ Bell senior analyst Tom Selby said.
“A number of factors have contributed to rising income tax bills in recent years, including the slashing of the dividend allowance from £5,000 to £2,000 and tax bands either being frozen or rising at a slower rate than wages. Both of these have resulted in more people being dragged into the higher and additional-rate tax brackets over the last decade or so.
“As income tax bills soar, people should consider using tax efficient savings vehicles like ISAs and pensions to limit these costs where possible.
“Certainly any dividend paying investments would benefit from the tax-free growth offered by ISAs and pensions, while increasing pension contributions when you move to a higher income tax band is a sensible and legitimate way to reduce the amount of income tax you pay.”
Source: Adam Cadle, Money Age 30th August 2019
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