Britain’s tax take has leapt to a record high, marking the latest evidence of the Treasury’s squeeze on hard-working families and businesses.
Figures from the Organisation for Economic Cooperation and Development (OECD) show the level of tax rose to 35.3 per cent of Gross Domestic Product in 2022, up from 34.4 in 2021.
It suggests the UK is an increasingly high-tax country among the 38 OECD nations – moving up from 21st to 16th in the rankings.
Separate analysis from commercial real estate firm Altus Group shows the UK has the joint highest rate of property tax – including council taxes, stamp duty and business rates – among these countires.
The figures are likely to further antagonise Tory MPs worried about Rishi Sunak’s leadership as the party languishes in the polls
The figures are likely to further antagonise Tory MPs worried about Rishi Sunak’s leadership as the party languishes in the polls with an election looming next year.
MPs have called on Sunak and Chancellor Jeremy Hunt to lower taxes and go further than the 2p cut to National Insurance in the Autumn Statement.
Britain’s high business taxes are an increasing source of grievance for firms looking to invest, especially after corporation tax was hiked from 19 to 25 per cent this year.
While income taxes have not been going up, the freezing of tax thresholds means millions are suffering from ‘stealth’ raids raking in tens of billions of pounds for the Treasury.
Budget watchdog the Office for Budget Responsibility (OBR) predicts the tax burden is on course to rise to a post-war high of 37.7 per cent of GDP five years from now. The latest OECD figures appear to mark another waystation on Britain’s baleful march to a high tax future.
Its data shows that for much of the past quarter century, the UK’s tax burden has been lower than the OECD average.
It was 31.1 per cent in 2009. The analysis finds that the UK has particularly higher revenues from personal income, profits, capital gains and property taxes than other nations that belong to the Paris-based OECD.
But Britain’s tax burden is still well below that of France, on 46.1 per cent, and Germany at 39.3 per cent. It is far higher than the US’s 27.7 per cent.
Altus Group’s analysis found that property taxes in the UK equated to four per cent of GDP, equal with Israel as joint highest in the OECD.
That compares with 2.9 per cent across the G7 group of advanced economies. Alex Probyn, president of property tax at Altus Group, said: ‘Our clients tell us that the level of the business rates tax is a disincentive to invest.’
Chancellor Jeremy Hunt has said he wants to cut taxes when Britain can afford it.
In his autumn statement, he slashed the main rate of national insurance while making permanent a tax break called ‘full expensing’ which rewards businesses for making certain investments.
But the OBR said the £10billion impact of national insurance cuts was more than offset by the £40billion being raked in by stealth taxes as more are dragged into paying income tax at a higher rate.
