Top 1% of UK taxpayers now contribute a third of income and capital gains tax

"The top 1% of UK taxpayers contributed a third of all income tax and capital gains tax (CGT) collected in the last financial year, according to new HMRC data that highlights the growing reliance on a small pool of high earners to support the public finances. A Freedom of Information (FOI) request by investment service Wealth Club found that the top 500,000 taxpayers paid £93.8 billion in 2023/24, accounting for 33% of total income and CGT receipts."

"Wealth Club said the findings underline the fiscal risk of deterring high net worth individuals (HNWIs) from living and investing in the UK. "A very small group of individuals is responsible for a disproportionately large share of the nation's tax revenue," said Alex Davies, founder and chief executive. "Rather than penalising success, we should be creating a stable and attractive environment where entrepreneurs and wealth generators choose to remain, invest and contribute to the nation's long-term success.""

"The figures come amid concern that the abolition of the non-domicile scheme in April is accelerating the departure of globally mobile wealthy individuals. The previous regime allowed foreigners who considered their permanent home to be abroad to pay a fixed annual fee starting at £30,000 while protecting overseas income from UK taxation. Under the new rules, those resident in the UK for four years or more must pay income and capital gains taxes on global earnings, with inheritance tax also applicable on overseas assets"

The top 1% of UK taxpayers contributed one-third of all income tax and capital gains tax in 2023/24. A Freedom of Information request found the top 500,000 taxpayers paid £93.8bn, accounting for 33% of income and CGT receipts. The top 100,000 paid nearly £55bn, almost one in every five pounds collected. Wealth Club warned this concentration creates fiscal risk if high-net-worth individuals are deterred from living and investing in the UK. The non-domicile regime was abolished in April; the previous system allowed foreign domiciliaries to pay a fixed fee from £30,000 while protecting overseas income. Under new rules, residents after four years must pay UK income and capital gains taxes on global earnings.

Read at Business Matters