Britain ranks 25th in European tax league – see which state taxes workers most | Personal Finance | Finance


Britain ranks 25th in the European tax take league – well behind countries such as France and Germany.

Despite the fact that UK taxes are at a 70 year high, British workers, consumers and businesses typically pay much less than their counterparts on the Continent.

The perception that taxes in Britain are particularly high was central to the general election campaign with the Conservatives promising cuts in National Insurance to woo voters.

However, a new study by experts at Utility Bidder produces a league table suggesting UK tax levels are relatively modest – at least in European terms.

The study looked at total tax revenues as a percentage of each country’s Gross Domestic Product (GDP). It took into account taxes on incomes, consumer goods and services, business profits, plus contributions to social security, such as National Insurance, by employees and businesses.

The figure for the UK tax take as a percentage of GDP came in at 34.4 percent. By comparison the figures for the top five were 47.4 percent in Denmark, 45.2 percent in France, 43.3 percent in Austria, 43.2 percent in Finland, and 42.7 percent in Sweden.

Once the impact of Social Security payments are added into the equation, Finland came out top in terms of total payments to the state, ahead of France, Austria, Denmark and Italy.

Interestingly, Ireland was identified as having a particularly low tax take as a percentage of GDP at 20.7 percent. As a result, it ranked 31 out of the 34 countries in terms of total payments to the state.

The study also looked at a regional breakdown for the UK to identify those areas which contribute the highest amount in tax to the government to fund public services.

As might be expected, London came out on top with more than 1 million workers paying the 40 percent higher rate of tax – some 21.67 percent of the total.

Scotland ranked second with 19.22 percent paying higher rates of tax with the South East of England third at 19.01 percent, the East of England on 17.09 percent and the South West on 14.06 percent.

At the other end of the scale just 10.85 percent of workers in Northern Ireland pay top rate tax with a figure of 10.95 percent in Wales, 10.98 percent in the North East and 11.57 percent in the Yorkshire and the Humber region.

The report said “Despite London being home to many high earners the cost of living in the English capital is considerably higher than other regions.”

Looking at Europe as a whole, the report said: “Finland takes the top spot with a tax score of 8.26 out of 10. Finland scored highly across our categories, ranking particularly high for total tax revenues, taxes on goods and services, and taxes income and profits as a percentage of GDP.

“France takes second place with a tax score of 7.50 out of 10. Although France’s tax on goods and services and income and profits aren’t exceptionally high, its social security contributions and total tax revenue put the country in second place on our list.

“Our top three is completed by Austria, with a tax score of 7.27 out of 10. Austria’s tax on goods and services may not be the highest. However, its social security contributions and total tax revenues as a percentage of its GDP are among the highest in Europe.”

More details can be found here.



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