The Staggers

The New Statesman’s rolling politics blog

How much tax do the super-rich pay?

Never-before-published data reveals the extent of tax avoidance.

By George Eaton Published 16 April 2012 10:39

The sun rises behind the Canary Wharf skyscrapers on the Isle of Dogs. Photograph: Getty Images.

As Samira noted earlier, in an attempt to defend its cap on tax relief, the Treasury has released new figures revealing the extent of tax avoidance among the super-rich. No government has ever published data of this kind before, so I thought Staggers readers might like to see the full chart. As it shows, 12 [6 per cent] of the 200 taxpayers earning over £10m pay less than 10 per cent in tax, while 58 [29 per cent] pay 40 per cent or less.

The debate on tax transparency has accelerated so fast that it would no longer be surprising if one of the main parties called for the UK to follow the Nordic countries and make all tax returns public.

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View the discussion thread.

18 comments

Mon, 2012-05-21 09:34 — Steve T (not verified)

Publishing tax stats on their own would be almost meaningless, as are the above stats.
They only show tax paid on declared incomes, presumably.
This doesn't give anything like the full picture.
For instance, if you have your salary paid through a service company, then your declared, taxable, income would be only a small part of your actual income.
All those on higher incomes use all sorts of these devices to minimise their tax.

Sun, 2012-05-13 15:33 — hugh markey (not verified)

Why is it that foreign billionaires prefer a London lifestyle to a New Yorker way of living? Couldn't be the 'perp' walk and the aggressively democratic juries, could it? And a fearless media?
Now the French rich list are contemplating relocating to London. George Osborne has feather-bedded this world capitol for the rich ex-pats and these Gallic patriots can expect a nice soft landing.

You Don't Have to Know the Language

Wed, 2012-05-09 04:11 — Kantian School (not verified)

The problem is that the rich keep getting richer because they can invest their money, while the poor keep getting poorer because of debt and living month to month. It is shameless that the rich don't pay their fair share of taxes. They want to exploit the economy for their own good but not give back. They probably feel they don't have enough and no amount will ever be enough for them. check out http://1keytolife.com if you want to learn what the real key to life is.

Mon, 2012-04-16 19:16 — New Stateswoman (not verified)

Aren't you just sick of the greed? You'd think they'd sicken themselves.

Mon, 2012-04-16 19:14 — Mr Danger

"That's less than I pay and I earn less than a third of that."

No you don't. You are confusing marginal rate with the overall rate.

Mon, 2012-04-16 19:08 — Indu Pendent

Wonder how much tax millionaire Ed Balls pays?
Wonder if we will ever find out?

Mon, 2012-04-16 16:57 — nourredine

@Eddy S,
If i was on £10 million a year, i will not mind paying 45% of tax, because with what left5 is damn more than the one on minimum wage.
Don't you think?

Mon, 2012-04-16 16:37 — hugh markey (not verified)

Surely the rich pay that flat tax - VAT! Or is that the charitable view.

Sponger

Tue, 2012-04-17 02:07 — Jan Cosgrove

So the rich guy and poor guy pay the same £300 for item X plus the VAT. That is, £60. Or,item Y for £800, +£160. One buys his car for £10,000, +£2,000, the other for £250,000, +£50,000. Do you get my drift? Charitable, certainly. Not to the poor guy on e.g. £20,000 p.a. But, yes, to the one on £10 million p.a. Flat rate taxes are thus seen as regressive. Now, how about a VAT system that is not flat-rate, reasoning that if you afford that Ferrari, you can afford greater sales tax? Oh, maybe people might like to examine the effect of the cap on National Insurance which means that those above £1m p.a. pay an effective 1% compared to the 11% of average earners. (Their employers pay more NI). An FoI a couple of years ago to HMRC showed that removal of this NI employee cap would generate around £9 billion a year extra plus give employers over £1 billion back. (The employee rate above £44,000 p.a. falls to 1% on the income above that lower limit, and the employer NI rises a tad.) So, the poor old rich man does not have to pay his full 11% on most of his income. Ah, I do love the kindness of government towards the struggling rich, don't you.

Tue, 2012-05-01 12:43 — New Stateswoman (not verified)

And people wonder why we had the riots and shop looters...
I'm surprised that NS advocates atheism and breakdown of religion. At least religious people are not inclined to jealousies, envy, shoplifting or covetous acts, right? But they like to see justice, and many are feeling a lack of justice. Just keep on ignoring us, Prime Minister, and feel the weight at the next election.

At least half the people are existing on between £4k and £7k a year, and the very idea of paying £4M a year in tax is astounding to the minds of the poor - poor, not because they haven't worked, but despite having worked. Many are not governed by religious belief of any kind, many are law abiding atheists, but then the rest are not governed by anything except a desire to even the score, in no matter how small a way, but in their eyes, the bigger, the better. I'm not advocating breaking the law, but we have witnessed "the have-nots" doing just this in an attempt to have a little of what the rich enjoy on a daily basis. I know it's getting tiring to say it, but television documentaries, movies and media gossip have much to blame for the covetous culture in society today.

Until there is a substantial rise in minimum wage, pensions and social benefits, to AT LEAST cover the cost of living, there will ever be struggle and resentment among the poor, disadvantaged, disabled and the elderly. £4 to £7 thousand a year is not a living income, by anybody's standard. That's £90 to £140 A WEEK, in which to pay utilities, groceries, clothing, and tv licence. The rich spend more sneezing into a handkerchief. Honest working people are waking up to the fact that they have been well and truly conned all their lives by cleverness and guile of the crafty rich, greedy self-serving fat cats who work people to the bone, and then don't know how to share in the profit. We have seen the effect of the French revolution to know how certain heads roll.

Tue, 2012-05-08 08:27 — Gerry Tierney (not verified)

"At least religious people are not inclined to jealousies, envy, shoplifting or covetous acts, right?"

Do you have a shred of evidence to support this? The vast proportion of the prison population is religious.

Mon, 2012-04-16 16:19 — Eddy S (not verified)

in terms of those earning 10 million a year paying 1 million a year in tax, that pays for a hell of alot of nurses and teachers. as long we don't end up with 50% of nothing, i'd take 10% of 10 million any day of the week.

if someone on 10 million will pay 5 million rather than trying to move to more business friendly climates like switzerland in order to save 4 million pounds a year then it would be a good thing, but even then how many in the UK earn more than 10 million - it must be people like louis hamilton or paul mccartney just about.

Mon, 2012-04-16 13:57 — It doesn't add up... (not verified)

As Douglas Carswell pointed out, it would only be fair to publish the benefits paid out to recipients as well.

Mon, 2012-04-16 23:14 — kenelmist (not verified)

Let's start with you, you anonymous person. What is your name and address, and what tax/benefits are you paying? Let me read about your health problems, and your family relationships, all laid out in the disclosures you want.

No, you don't want it, do you? And really I don't, either. And Carswell will also found out that he is not going to be elected again if he peddles this line.

Mon, 2012-04-16 13:55 — Des Demona (not verified)

I agree with CG above. Rich people avoiding tax is galling but the figures are nothing compared to corporate avoidance.

Mon, 2012-04-16 13:49 — Fergus Pickering (not verified)

Because something is a charity doesn't make it noble and good. Eton is a charity. I'm sure you think it is a quite wicked place. Mitt Romney gives 10% of his substance to the Mormons. What do you think of the Mormons? I've no doubt a whorehouse could be made into a charity. It's probably happened.

Mon, 2012-04-16 13:38 — Alex Jones (not verified)

Surely the really shocking data here is the effective rates paid by those earning between 100 and 250k p.a. None of those earning between 100 and 150k pay more than 40% and only 6% of those earning over 150k and less than 250k. A third of those earning between 100 and 150k pay less than 30% tax. That's less than I pay and I earn less than a third of that.

Mon, 2012-04-16 11:13 — CG (not verified)

Seems like Osbourne is just doing some PR stunt. Looking at the stats you show here, it seems only a tiny minority don't pay their full tax. When you add up the money they dodge, it probably doesn't amount to much.

However: Ozy should look at corporate avoidance. Corporations like Amazon for example. There we're talking about billions.

But who pays the price for his little populist stunt? Charities. Shame for all that think this is a noble gesture.