Highest tax burden this year since 1969-70

Highest tax burden this year since 1969-70 

The government is seeking new policy ideas as it tries to find ways to pay for a promised funding boost for the NHS. Pressure is mounting for spending increases elsewhere, too, with vigorous calls for cash injections for defence and education.

But a lot of the ideas focus on increased taxes - either by establishing new taxes or hiking existing ones. The TaxPayers' Alliance today calls on the government to steer clear of tax hikes on squeezed families and businesses and instead re-prioritise existing budgets:

Click here to read the full research note

Recently, various suggestions for higher taxes have been made:
  • A hypothecated tax to pay for higher NHS spending
  • A tax on chocolate
  • Ending the fuel duty freeze
  • Higher inheritance tax, council tax and business rates to pay for social care 
  • An increase in income tax and national insurance in order to fund social care

While there is widespread recognition that Britain needs a more sustainable funding model for social care, it is wrong to assume that the only way to raise more revenue would be to increase tax. Evidence shows that reducing tax rates can bring in more revenue. For example, in the UK:
  • Corporation tax receipts have increased by 25 per cent in real terms after headline rates came down from 28 per cent in 2010-11 to 19 per cent in 2017-18
  • Income tax receipts from the additional rate have increased by 37 per cent in real terms after the rate came down from 50 per cent in 2010-11 to 45 per cent in 2013-14

Commenting on the research, 
John O’Connell, chief executive of the TaxPayers’ Alliance said:

“Families and businesses are being squeezed under the highest tax burden in nearly 50 years. The gradual increase of taxation and the introduction of new taxes have hit poorer families the hardest, leaving them with less and less at the end of the month to pay for life's necessities.

The funding models for social care and the NHS need real reform, not ever higher taxes. Instead of taking even more money away from families and businesses, the government should consider cutting taxes, or reducing spending in other areas.”

This website uses cookies to ensure you get the best experience.  More info. Okay