Poor 'pay 47% of income in tax'

Press Association
Poor 'pay 47% of income in tax'
Poor 'pay 47% of income in tax'

The poorest 10% of households pay almost half of their gross income in tax, analysis by a campaign group has claimed.

The TaxPayers' Alliance research found that direct and indirect taxes accounted for an average 47% of the gross income of the poorest 10% of households, with VAT accounting for the biggest share of the bill.

The analysis of Office for National Statistics figures showed that the average gross income, including benefits, in the group was £9,743 but after tax the figure was £5,132.

The figures for 2012/13 showed that for the poorest 10%, some 13.9% of their gross income went on VAT, 7.2% on council tax and 5.6% on alcohol or tobacco duties.

The top 10% of households paid an average 35% of their gross income in taxes, some £37,287 a year, with income tax accounting for 19.1% of the money paid to the Exchequer.

The campaign group's chief executive Jonathan Isaby said: "This analysis shows how pernicious our tax burden has become. Not only does the tax system hit the poorest hardest, but those at the top are already contributing far more than anybody could reasonably describe as their 'fair share'.

"Our tax system is neither progressive nor fair, and we need radical reform as well as necessary savings if the way we tax and spend is to become fit for purpose."

A Treasury spokesman said: "At the Autumn Statement the Government published the most complete, rigorous, and detailed record of the impact of this Government's policies on households.

"This distributional analysis shows that in 2015/16 the 20% of households with the lowest incomes will receive almost five times as much support from spending on public services and welfare as they contribute in tax.

"But the Government also realises that the effects of the great recession are still being felt which is why we have taken continued action to help, including by lifting 2.95 million out of paying income tax all together."

Read more on AOL Money

Starbucks boss unrepentant about tax avoidance

Govt tax promises 'will isolate the young and poor'

Boris Johnson: Mansion Tax Would Be Tax on London
Boris Johnson: Mansion Tax Would Be Tax on London