Taxpayers will fork out £5.7 billion in Christmas taxes this year

Embargoed: 00:01 23rd December 2018

  • As millions of Brits hit the shops today, research shows how the Treasury rakes in billions in Christmas taxes.
  • This Christmas, a UK household will pay an average of £211 in tax for their festive spending. This is enough to buy 17 luxury Lidl Christmas puddings.
  • Christmas trees, children's toys and dessert wines are just some of the items Brits are paying high taxes on.

New research by the TaxPayers' Alliance shows how the taxman drains away our Christmas cheer by imposing stealth Christmas taxes.  Christmas taxes, as calculated by the TaxPayers' Alliance, include the cost of VAT on shopping items, as well as fuel duty, the new sugar tax, and alcohol taxes.  

With rising inflation and the highest tax burden in 49 years, many in the UK are struggling with the cost of living. Despite this pressure on finances, households across the country still intend to enjoy the festive season. Research from Deloitte shows that the average UK consumer intends to spend £567 this Christmas, which is an increase of 1 per cent in real terms from last year, and 42 per cent more than the European average. Consumers in the UK spend the most in Europe, followed by the Spanish with an average spend of £526.

Key findings

  • This Christmas, UK households will pay an average of £211 in tax on their festive spending, enough to buy 17 luxury Lidl Christmas puddings.
  • The total Christmas tax bill will come to £5.7 billion.
  • The average household will spend £1,355 on Christmas gifts, travel, socialising and alcohol.

The table below gives a few examples of typical Christmas spending. The TaxPayers’ Alliance calculations of the total tax bill for Christmas are based on our own research and that of Deloitte, not the items that are listed below.

Table 1: tax charged on popular Christmas gifts and essentials

Item

List price (£)

VAT charged (£)

iPhone XS

999

167

Sony PlayStation 4 Pro

350

58

Chanel No 5 Parfum 15ml

160

27

Lego Harry Potter Hogwarts Express

75

13

Jurassic World Jurassic Rex

120

20

Paw Patrol Ultimate Rescue Fire Tuck Playset

65

11

Hatchimals Mystery Egg

50

8

Debenhams Green Canada Spruce Christmas Tree (6ft)

70

12

Santa Suit

50

8

Christmas Wreath

30

5

John Lewis Emerald Pavone Christmas Crackers

12

2


Table 2: potential impact of the meat tax

Item

Current cost (£)

Meat tax (£)

New cost (£)

Tesco Finest 4 Cheddar And Bacon Sausage Rolls (188g)

2.60

2.05

4.65

Tesco Finest Honey Gammon Joint (750g)

7.50

1.05

8.55

Tesco Lamb Whole Leg Joint (2.2kg)

24.20

3.39

27.59

Tesco 12 Pigs In Blankets (240g)

2.00

1.58

3.58

Tesco Large Beef Roasting Joint

18.70

2.62

21.32


Click here to read the full report

Commenting on the figures, John O'Connell, chief executive of the TaxPayers' Alliance, said:

"Every year taxpayers work hard and save so they can enjoy the Christmas break with their families, but HMRC makes it increasingly difficult to do so. Santa had better watch out that his sleigh isn't next in line for a hefty levy. The taxman should stop playing Grinch and leave us a bit more for our Christmas stockings."