There is a long way to go as many still view the UK tax system as burdensome and complex. As much as lower taxes encourage growth, job creation and spread prosperity, the 2020 Tax Commission’s proposal had a bigger picture in mind and not just the short term effect of lowering the tax rates. Some of the suggestions that the commission proposed is that there should be a more generous tax allowance for all tax payers and that the tax rate should be uniform. All tax payers should incur a single, fair and proportional tax rate on all their income sources.
New tax laws also stripped child benefits meaning that many middle income families were paying a higher amount of tax. Large marginal tax rates on struggling families are bound to degrade their motivation to work and this is never a good sign. We have provided a neat infographic that shows some statistics on the UK’s sources of income tax and some simple data and information to go along with it. Hopefully it will help you understand the complex tax system in the UK.