Average family pays £656,000 in tax over their lifetime

January 30, 2012 12:58 AM


As the deadline looms for UK taxpayers to file their paperwork with HMRC, the TaxPayers’ Alliance (TPA) can reveal that the average family pays £656,000 in tax over their lifetime. New research shows the total amount of direct and indirect tax that households will pay over their working lifetimes and in retirement. Based on the current level of taxes applying over a working lifetime of 40 years and 15 years of retirement the TPA has calculated the total taxes paid by households broken down by income.


Click here to see the breakdown of lifetime taxes paid by households of differing incomes


Click here to read the full press release


The key findings of this research are:




  • The average household will pay £656,000 in tax over their lifetime in direct and indirect taxes. This includes a total of £250,000 in Income Tax and £101,000 in VAT

  • An average household in the highest income quintile will pay over £1.3 million in direct and indirect taxes

  • An average household in the lowest income quintile will pay £235,000 in direct and indirect taxes

  • An average household in the second income quintile will pay over £392,000 in direct and indirect taxes

  • An average household in the third income quintile  will pay over £556,000 in direct and indirect taxes

  • An average household in the fourth income quintile  will pay over £755,000 in direct and indirect taxes

  • The four most burdensome individual taxes over a lifetime are Income Tax, VAT, employee National Insurance contributions and Council Tax

  • Poorest households are hit hardest by VAT and Council Tax. A household in the lowest quintile pays £57,000 in VAT and £55,000 in Council Tax over a lifetime


 

Click here to see the breakdown of lifetime taxes paid by households of differing incomes


Click here to read the full press release





Matthew Sinclair, Director TaxPayers' Alliance said:




"Households in the UK now pay an incredible amount in tax over a lifetime, handing over a hefty slice of their income. The VAT hike has added to the cost of living and many taxpayers are really feeling the pinch with little prospect of improvement on the horizon. The Chancellor needs to deliver a tax cut in the Budget, to ease the burden and help the economy to grow. Simpler, fairer taxes can decrease the lifetime tax bill for households and leave everyone with more of their own money, so they can decide how to spend it."



The average household is defined as having a gross annual income of £36,372 . Household income is broken down into five groups (quintiles) ranging from least to most income:


The average gross annual income of lowest quintile is £11,730
The average gross annual income of the second quintile is £19,133
The average gross annual income of the third quintile is £29,227
The average gross annual income of the fourth quintile is £41,886
The average gross annual income of highest quintile is £79,888





As the deadline looms for UK taxpayers to file their paperwork with HMRC, the TaxPayers’ Alliance (TPA) can reveal that the average family pays £656,000 in tax over their lifetime. New research shows the total amount of direct and indirect tax that households will pay over their working lifetimes and in retirement. Based on the current level of taxes applying over a working lifetime of 40 years and 15 years of retirement the TPA has calculated the total taxes paid by households broken down by income.


Click here to see the breakdown of lifetime taxes paid by households of differing incomes


Click here to read the full press release


The key findings of this research are:




  • The average household will pay £656,000 in tax over their lifetime in direct and indirect taxes. This includes a total of £250,000 in Income Tax and £101,000 in VAT

  • An average household in the highest income quintile will pay over £1.3 million in direct and indirect taxes

  • An average household in the lowest income quintile will pay £235,000 in direct and indirect taxes

  • An average household in the second income quintile will pay over £392,000 in direct and indirect taxes

  • An average household in the third income quintile  will pay over £556,000 in direct and indirect taxes

  • An average household in the fourth income quintile  will pay over £755,000 in direct and indirect taxes

  • The four most burdensome individual taxes over a lifetime are Income Tax, VAT, employee National Insurance contributions and Council Tax

  • Poorest households are hit hardest by VAT and Council Tax. A household in the lowest quintile pays £57,000 in VAT and £55,000 in Council Tax over a lifetime


 

Click here to see the breakdown of lifetime taxes paid by households of differing incomes


Click here to read the full press release





Matthew Sinclair, Director TaxPayers' Alliance said:




"Households in the UK now pay an incredible amount in tax over a lifetime, handing over a hefty slice of their income. The VAT hike has added to the cost of living and many taxpayers are really feeling the pinch with little prospect of improvement on the horizon. The Chancellor needs to deliver a tax cut in the Budget, to ease the burden and help the economy to grow. Simpler, fairer taxes can decrease the lifetime tax bill for households and leave everyone with more of their own money, so they can decide how to spend it."



The average household is defined as having a gross annual income of £36,372 . Household income is broken down into five groups (quintiles) ranging from least to most income:


The average gross annual income of lowest quintile is £11,730
The average gross annual income of the second quintile is £19,133
The average gross annual income of the third quintile is £29,227
The average gross annual income of the fourth quintile is £41,886
The average gross annual income of highest quintile is £79,888




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