Chancellor Rachel Reeves has stated those with the broadest shoulders should carry the bulk of the tax burden, but the richest in the UK already pay eyewatering amounts, according to a Freedom of Information Request made by Wealth Club to HMRC in September 2024.
The UK’s top 100 earners paid £39m each in income tax and capital gains tax (CGT) in the most recent tax year, £3.9bn in total, or 1.5% of the total taken in by HRMC.
Extending this, the top 1,000 payers of income tax and CGT paid around £10.4m each on average, totalling 4% of the amount HMRC raked in last year. Meanwhile, the top 10,000 payers accounted for almost 10% of the total paid.
Tax receipts for the most recent financial year
Source: Wealth Club, HMRC
Alex Davies, founder of Wealth Club, said: “Louis XIV’s finance minister famously declared that ‘the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing’. Nothing much has changed in the past 400 years, taxation is still about raising the revenue you need with the smallest amount of economic and political damage.”
Although Reeves has stated her intention to put more pressure on those earning the most, he noted “these numbers demonstrate just how reliant the tax system already is on a very small number of individuals”.
The risk is ultra-wealthy individuals move abroad if the tax system in the UK becomes too burdensome. HMRC estimated around 9,500 millionaires are expected to leave the UK this year.
“If just the top 100 taxpayers decided to move overseas that would rise to £3.9bn less revenue for HMRC, and if the top 1,000 taxpayers migrated out of the UK, that figure would rise to £10.4bn less in receipts,” Davies said.
“That’s not just this current tax year, but also each subsequent year, leaving huge holes in the country’s finances and draining the economy of the entrepreneurs and investors who start and support young businesses.”
He warned the UK is already seen as an “unappealing place” to start a business, with a culture that is “unsupportive of wealth creators” due to high levels of taxation.
“Changing this group’s perception of the UK and getting the balance right, should be a key goal for the chancellor. The message is clear for politicians when deciding future tax policy – tread very carefully or the geese may take flight,” he concluded.