TaxPayers’ Alliance finds average tax level is highest in 70 years

Embargoed: 00:01 Monday 1st February 2021

• New analysis by the TPA has found the five year average tax burden is at a 70-year high, increasing to 34.2 per cent of GDP in 2021-22.
  
  
• HM Treasury plans to raise Britain’s historic-high tax burden over the next five years despite the economic downturn.
  
  
• The level of taxation under Boris Johnson is likely to be higher than it has been since Clement Attlee was prime minister.
  
  

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After millions filed their tax returns yesterday, the TaxPayers’ Alliance (TPA) has revealed that the average tax burden has reached a 70 year high. It means the level of taxation as a percentage of GDP under Boris Johnson is likely to be higher than it has been under almost every other postwar prime minister.

According to the Office for Budget Responsibility, the tax burden will rise by almost 1 percentage point to 34.2 per cent next year, making it the highest in 52 years. Using a five-year average - which gives a more reliable picture of the sustained level of tax - this research reveals that tax is the highest it has been in a generation. The current average burden is 33.8 per cent, the highest level since Britain was recovering from the second world war 70 years ago in 1951.

The research found that in his postwar government, Winston Churchill reduced the tax burden more than any other postwar prime minister, by 4.5 percentage points. It also shows that taxes were lower during Churchill’s premiership than they have been under each of the last three Conservative prime ministers. The biggest rise in taxation came under Labour’s Harold Wilson, who oversaw a 4.6 percentage point increase.

Like the second world war, coronavirus measures have seen massive government intervention and the economy put on life support. Raising taxes now would mean austerity for taxpayers, which would cripple the recovery. The TPA is calling on the chancellor to give taxpayers a respite from tax rises, rescue struggling sectors and revive the economy in the upcoming Budget.

CLICK HERE TO FIND OUT HOW POSTWAR PRIME MINISTERS RANKED

Key Findings:

• In 2021-22 the share of GDP extracted in tax - the ‘tax burden’ - will reach its highest level in 52 years at 34.2 per cent of GDP.
  
  
• The previous high was a one-year spike in 1969-70. Smoothing out volatility with five-year averages shows the tax burden is now at its highest sustained level since 1951, the highest level in 70 years.
  
  
• HM Treasury plans to raise Britain’s historic-high sustained tax burden even higher over the next five years.
  
  
• Next year, total receipts will hit a 36-year high at 38 per cent of GDP. The five-year average of total receipts is this year at a 35-year high, at 38 per cent of GDP.
  
  
• The tax burden under prime minister Boris Johnson is likely to be higher than it has been since Clement Attlee.

CLICK HERE TO FIND OUT HOW POSTWAR PRIME MINISTERS RANKED

CLICK HERE FOR A BROADCAST CLIP

John O’Connell, chief executive of the TaxPayers' Alliance, said:

“This research confirms that we’re facing the highest taxes in a generation. 

“The sustained tax burden is now the highest it’s been since the country was recovering from the second world war 70 years ago, and any tax rises in the next budget will put that figure even higher. 

“In these difficult times, the chancellor should give hard pressed families and businesses a respite from taxes, offer a rescue to struggling sectors and try to revive the economy.”

TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)

Media contact:

Danielle Boxall
Media Campaign Manager, TaxPayers' Alliance
[email protected]
24-hour media hotline: 07795 084 113 (no texts)

Notes to editors:

1. Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
   
   
2. TaxPayers' Alliance's advisory council.
   
   
3. The TaxPayers’ Alliance have published five tax reforms to secure a recovery from coronavirus.
   
   
4. The TaxPayers’ Alliance have ranked each post-war prime minister by their effect on the tax burden. It found Winston Churchill reduced the tax burden more than any other post-war prime minister.