This research published by the TaxPayers Alliance looks at how much households across the income spectrum and regions of the UK pay in taxes and how much they receive in benefits and services such as education and the NHS. Intuitively the results are as would be expected.
Key findings of the report include:
Net effects of taxes and benefits
•The top 10 per cent of households pay an average of £30,023 more in tax than they receive in cash benefits and benefits in kind such as education and the NHS
•Before taxes and benefits, the most well-off households had an average income 27 times higher than the households on the lowest incomes, but after tax and benefits this falls to 5.8 times higher
•The average household paid £274 more in taxes than they received in benefits and services
Taxes
•The poorest households paid an average of 47 per cent of their gross income in taxes, the highest percentage of any income group
Benefits
•The poorest households of households received an average of £7,961in benefits in kind, compared to the top 10 per cent who received £4,980
•The third lowest 10 per cent of households received an average of £4,912 in non-contributory benefits, more than the bottom and second-bottom deciles
Regional Breakdown
•The average household in London, the South East, East of England, South West and East Midlands paid more in taxes than they received in benefits and services. All other regions, including Scotland, received more in benefits and services than they paid in taxes
•Households in the North East of England received an average of £3,175 more in benefits and benefits in kind than they paid in taxes, whereas in London households paid £4,119 more in taxes than they received in benefit and benefits in kind.
Tax Impact
•The poorest 10 per cent of families pay by far the largest proportion of their gross income in taxes
•This is mostly due to indirect taxes such as VAT, Council Tax, fuel duties and duties on alcohol and tobacco
•VAT is the most burdensome tax for households in the lower half of the income scale, whilst Income Tax is the most burdensome for the upper half
