June 8th Was Tax Freedom Day

Tax Freedom Day falls on 8th June. Brits work 159 days of the year solely to pay taxes.

UK Taxpayers will fork out over £869.4bn to the Treasury this year, 43.29% of net national income. This is the latest Tax Freedom Day since reliable records began in 1995—and compared to earlier (less reliable) data it is the latest since the mid-80s.

Cost of Government Day, which factors in borrowing as well taxes, is July 10th—almost a month earlier than in 2020 but 4 days later than last year.

MPs have provided comments in support of Tax Freedom Day, recognising the need to reduce the burden on people and businesses during a cost of living crisis. It is now incumbent on the Government to lower taxes to boost growth and investment.

What does this mean to me?

Tax Freedom Day is the day when Britons stop paying tax and start putting their earnings into their own pocket. In 2022, the Adam Smith Institute (ASI) has estimated that every penny the average person earned for working up to and including 7th June went to the taxman - from June 8th onwards they are finally earning for themselves.

British taxpayers have worked a gruelling 159 days for the taxman before they can start earning for themselves.

Brits' tax burden is moving in the wrong direction. In the midst of a cost of living crisis, taxpayers are being burdened with even more obligations to HMRC. While the Government’s immediate interventions to help households through the crisis are welcome, the rising cost of living cannot be effectively tackled without a growing economy underpinned by low taxes.

With current trends, we can expect Tax Freedom Day to continue to fall later in the year. Using OBR growth and tax revenue projections from March 2022, Tax Freedom Day is projected to hit June 24th by 2026: the latest since at least the early 1960s, according to historical data

Andrew withers FRSA