According to a new analysis of government revenues, UK employees pay an average of £1.25 an hour in tax. 69p of this is deductions from wage. The remainder is known as indirect taxation.
It’s revealed that the average worker pays around £30 a day in tax, which equates to £11,000 a year. VAT, council tax and other tax duties amount to nearly £5,000 of this, which equates to 56p an hour. These are indirect taxes.
Income tax and National Insurance account for the remaining £6,000. This means the total bill equates to 40% of average earnings.
MetLife who analysed the figures also revealed a gender discrepancy. For example, male workers pay almost double direct and indirect tax compared to that of female counterparts. Employees aged between 40 – 49 pay the most tax on average, at almost £35 a day (£1.50 an hour) however, this drops to £23 a day for employees over 60.
Jonathan Isaby, Chief Executive of the TaxPayers’ Alliance, said that the splitting of income tax and national insurance is one action that should be looked at. Merging them, he said, “would be a very good move towards transparency and simplicity”.