UK tax level hits its highest rate on record, according to new data from OECD
The UK tax level has hit its highest rate on record, new data shows
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The UK’s tax level across the economy has risen to its highest rate on record, according to new data from the Organisation for Economic Co-operation and Development (OECD).
The OECD’s annual revenues statistics update found the total tax-to-GDP ratio across the UK hit 35.3 per cent for the 2022/23 financial year.
It marks the highest level since OECD records began in 2000.
This represents a 0.9 percentage point increase from the 34.3 per cent record a year earlier.
The UK tax level marks the highest level since OECD records began in 2000
PA
It ranks the UK as having the 16th highest rate of 38 OECD countries and is 1.3 percentage points above the group’s average of 34 per cent, in relation to tax competitiveness.
Meanwhile, new analysis from commercial real estate firm Altus Group has found the UK has the joint-highest rate of property taxes across the 38 OECD countries.
It found the UK has a ratio equivalent of four per cent of property taxes to GDP.
This compares with an average of 1.5 per cent across the European Union and a 2.9 per cent average against countries in the G7 group of advances economies, according to the research.
Property taxes in the UK include all tax receipts from council tax, business rates, stamp duty land tax (SDLT) and land and building transaction tax (LBTT) in Scotland.
Alex Probyn, president of property tax at Altus Group, said: “The United Kingdom is characterised across the developed world as having higher levels of revenue from taxes on property.
“Our clients already tell us that the level of the business rates tax is a disincentive to invest and an effective tax rate of 54.6 per cent next year for commercial property will do nothing to dispel that.”
The Office for Budget Responsibility (OBR) has forecast a further increase in UK property taxes.
The OBR predicts business rates will rise by £3.2billion from April 1 due to an inflation-linked increase.
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Council tax receipts are set to grow by £2.3billion, according to the forecast.
Shadow financial secretary to the Treasury James Murray said: “Working people and businesses are being made to pay the price for their failure on the economy – with 25 Tory tax rises in this Parliament alone.
“Only Labour will grow our economy, replace business rates with a fairer system, and make working people better off.”
A Treasury spokesperson said: “The UK tax system is highly competitive, with the lowest headline rate of corporation tax and the most generous capital allowances in the OECD, while our tax to GDP remains in the middle of the pack in the G7 in 2028-29 – lower than France, Italy and Germany.
“Our autumn statement delivers a £10 billion per year tax cut for businesses by making full expensing permanent, and an over £9 billion per year tax cut for employees and the self-employed, worth over £450 for the average worker on £35,400.”