- New stats reveal HMRC raked in an extra £11billion in income tax in 2018/19 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/827866/Income_Tax_Receipts_Statistics_August_2019.pdf)
- Total net income tax receipts for 2018/19 estimated at £191billion, 6% higher than the previous year
- UK citizens pay almost 30% more income tax today than they did 10 years ago
- Saving in a pension or ISA can help reduce your income tax bill
Tom Selby, senior analyst at investment platform AJ Bell, comments: “Despite successive Governments making very public proclamations about reducing the income tax burden by repeatedly raising the personal allowance, the bare facts show as a nation we are paying more income tax than ever before.
“A number of factors have contributed to rising income tax bills in recent years, including the slashing of the dividend allowance from £5,000 to £2,000 and tax bands either being frozen or rising at a slower rate than wages. Both of these have resulted in more people being dragged into the higher and additional-rate tax brackets over the last decade or so.
“As income tax bills soar, people should consider using tax efficient savings vehicles like ISAs and pensions to limit these costs where possible.
“Certainly any dividend paying investments would benefit from the tax-free growth offered by ISAs and pensions, while increasing pension contributions when you move to a higher income tax band is a sensible and legitimate way to reduce the amount of income tax you pay.”
