Introduction
With rising inflation and the tax burden scheduled to reach a 73 year high, many households in the UK are struggling with the cost of living. Unfortunately, the joys of the festive season also bring additional pressures on household finances. Research from PwC shows that the average UK consumer intends to spend £428 on Christmas this year, an increase of 11.5 per cent from last year. In a blow to the high street, customers are continuing to move their shopping habits online. UK shoppers are expected to spend £287 on online shopping this year – 67 per cent of their Christmas shopping.
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Key findings
- This Christmas, a UK household will pay an average of £191.75 in tax on their festive spending, enough to buy 23 Tesco Finest 800g Christmas puddings.
- The total estimated Christmas tax bill will be £5.2 billion. This is equivalent to what the government predicts it will cost to return the aid budget to 0.7 per of GNI in 2024-25.
- The average household will spend £3,240 in December, 29 per cent more than a typical month. This will be spent mainly on Christmas gifts, clothing, furniture, food, travel and alcohol.
- A UK household’s average tax bill on festive spending would increase to £193.81 if a proposed 2 per cent online sales tax levy were applied. This would add £57,142,275 to the Christmas tax bill.