Poor pay higher tax share than rich

Press Association
pile of money british pounds...
pile of money british pounds...

The UK's poorest households pay a higher share of their income in tax than the richest, figures show.

The poorest fifth of households pay 37.8% of their gross income in direct and indirect taxes, while the richest fifth pay 34.8%.

Cash benefits make up over half the income of the poorest households, compared with 3.5% for the richest.

The findings were published as part of the Office for National Statistics' annual survey of the effect of taxes and benefits on household income for the year 2013/14.

The report found that the richest fifth of the population pay three percentage points less of their income in tax than the poorest fifth. The gap has grown since last year when the difference was 2.3 points.

Before taxes and benefits the richest fifth of households was found to have an average income of £80,800 in 2013/14, 15 times greater than the poorest fifth, who had an average of £5,500.

After all taxes and benefits are taken into account the ratio between the top and bottom fifth of households is reduced to four-to-one.

Meanwhile the average disposable income for UK households stood at £24,500 in 2013/14 - an increase of £810 (3.4%) on the previous year, but below the peak of £25,001 in 2007/08.

Average income has roughly doubled since current records began in 1977, when the figure as compared on 2013/14 prices was £12,152.

The report also noted that overall levels of income inequality are broadly unchanged, although inequality among retired households has increased slightly.

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