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Saturday, July 16, 2005
How little of £100 you get to keep ...

The following nugget comes from the Tax Beater website:

Of GBP100 earned, 10% is paid in National Insurance contributions (nothing but a euphemism for an additional tax on income) and 22% is paid in Income Tax (40% for higher rate taxpayers). Of the remaining GBP68 of take-home pay let's say that over a week you spend it thus:

- GBP15 for a meal out
- GBP8 on cinema tickets
- GBP16 in petrol
- GBP3 put by for electricity
- GBP7 on some cigarettes
- GBP9 on a few drinks down the pub
- GBP4 paid out in insurance premiums
- GBP3 put aside for Council Tax
- GBP2 put by for Road Tax

Sound reasonable? Obviously 100% of the last two items are wholly tax. Five per cent of your electric bill goes to the taxman and 4% of any money you pay to protect yourself with insurance. Of the GBP23 you spend at the flicks and eating out, 17.5% goes to the government in VAT. While you're enjoying yourself, so is the Treasury; they take GBP4.03 from you for the evening.

35% of a well-deserved drink goes direct to our masters, and a recent AA campaign followed by the picketing of oil refineries serves to remind us that a staggering 85% of the money spent on petrol is snatched by the taxman.

Eighty five per cent! But even that is not the worst. The state loves a smoker, of course, and from the money spent on cigarettes an astonishing 88.9% enters its coffers. It brings tears to the eyes. Altogether, a full GBP32.31 of that week's expenses goes straight to the taxman.

Of the GBP100 earned, GBP64.31 will have been paid to the government in tax. At the end of the day, all you will have to show for it is GBP35.69 in goods and services. A higher-rate taxpayer will retain a miserly GBP21.69.

Oh, and we haven't even taken into consideration the host of taxes on business, employers national insurance contributions, airport taxes, capital gains tax ... and then there's stamp duty, where you hand over thousands just because you decide to move house! Somebody is taking us for a ride.

Posted by Matthew Elliott | Permanent Link

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