03 June 2016
Today (03 June) marks Tax Freedom Day – the notional day on which UK taxpayers have earned as much as they will pay out in taxes that year. This year, it has taken 154 days for the average Briton to earn enough to pay for their income tax, National Insurance, VAT, fuel duty and other taxes owed in 2016. Effectively this means that UK taxpayers will only start to earn for themselves from today.
This year, Tax Freedom Day (as calculated by the Adam Smith Institute) falls on Friday 03 June four days later than 2015.
Karen Barrett, chief executive at Unbiased, the site that connects millions to advice, comments: ‘Of course, it’s only theoretical – but Tax Freedom Day is a very effective way for people to visual the amount that they pay out in tax. Many will be shocked to realise that they work for roughly a third of the year purely to pay taxes, but rather than demoralise us, it should motivate.
‘As necessary as tax is, it’s the payment of unnecessary tax that people need to address. We know from our TaxAction Report that unnecessary tax payments will amount to a staggering £4.6 billion this year. The wastage comes from people not using the available allowances and reliefs, whether through a lack of knowledge or simple inaction. Tax Freedom Day should be a wake-up call to those people who are losing out needlessly. If we as a nation can bring this day earlier by even a few days next year, that will be something to celebrate. A good first step would be to ask a financial adviser about how to be more tax-efficient.’
Les Cameron, tax specialist at Prudential, comments: ‘While Tax Freedom Day comes 154 days into the calendar year, it’s important to remember that we’re only a few weeks into the new Tax Year, which started on 6 April. This leaves plenty of time for people to take action before their next tax bill is due. There are several simple ways for people to cut their tax liabilities, including saving into tax-efficient savings products, such as ISAs, and making pension contributions. Hopefully the knowledge that 154 days have passed before people’s money is their own is enough to encourage them to seek advice and sort out their liabilities.’
Notes to editors:
1 TaxAction report 2016 has been produced by Opinium Research on behalf of unbiased.co.uk. All figures are based on calculations done on unrounded values to guarantee accuracy; text paragraphs display rounded figures. Survey results come from an Opinium online survey, commissioned by unbiased.co.uk, of 2,006 UK adults aged 18+ carried out between 20th and 24th November 2015. Results have been weighted to nationally representative criteria.
22015 TaxAction Research can be found here.
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