Tax burden hits poor harder than rich in divided Britain

Published:  4 Jul at 6 PM
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As an increasing number of retirees leave the UK for a better chance of living comfortably in older age, established expats abroad would do well to look back at their home country’s huge gap between the poor and the wealthy.

Official figures issued recently revealed that the rich in the UK are a massive 15 times better off than those in the poorest sector. Number-crunching by the National Statistics Office shows the impact of high taxation as against benefits on household income.

Expats living in comparative luxury overseas might like to consider the gap between the very rich and the very poor as stated by the figures. The top 20 per cent of households earn on average £81,300 per annum, whilst the poorest 20 per cent earn just £5,500, and 50 per cent of households receive more in state benefits than they pay in tax.

The playing field between the two extremes is levelled somewhat by the benefit system and income tax, with the wealthiest on average taking home £59,900 and state support to the poorest raising income levels to £15,600. However, income paid to the taxman by the rich totalled 37.4 per cent of annual income, and that paid by the poor totalled 35.1 per cent.

Calculations of taxes paid included income tax and all indirect taxes including VAT. The result is that the top 20 per cent still have plenty enough to fund a comfortable lifestyle, whilst the poorest sector of society loses up to a third of its already insufficient income mostly by indirect taxation, and is reduced to struggling to make ends meet.

Expat retirees who’ve chosen their destination carefully can live on the British state pension even although they rarely have access to state top-up benefits. Those with an additional work-related pension or invested capital from the sale of a UK property can live their dream without having to leave Europe, and those brave enough to move to far-flung Asian retirement hubs can enjoy the best lifestyle of all.
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