Monday, March 13, 2006

The not-always-obvious ways the UK has increased its tax take

"Stealth" taxes have been rising dramatically in the UK in recent years.

Jennifer Hill, writing in the Scotsman, has some of the details in 'Fiscal drag' and other ways Brown quietly gets your cash. For instance:

The scale of the impact of these so-called "stealth" taxes is startling. Typical middle-to-high income earners now pay up to 50 per cent of their incomes to the Treasury by way of taxes, compared with 36 per cent in 1996. And, since 1997, revenue generated by stealth taxes, fiscal drag and stamp duty has increased a staggering 78 per cent - to £123bn today from £69bn.

One of the most dramatic increases can be seen in stamp duty land tax on house sales: revenue here has risen from just £675 million in 1996 to £5.5bn in 2004 - a more than eightfold increase...

[...snip...]

Soaring house prices have also created an inheritance tax bonanza for the government. They have contributed to an 81 per cent increase in IHT revenue - to £2.9bn from £1.6bn in the past eight years.

That has been driven by a surge in the IHT take on property, which has risen 129 per cent since Labour came to power in 1997 - to £1.1bn from £480m.

[...snip...]

Money is flowing into Revenue coffers from more surprising areas, too: more than a quarter of everyday motoring costs go to the government through a variety of taxes....

The same page has tips on ways you might be able to cut down on the tax you pay, if you live in the UK.

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