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Tax Freedom Day 2011 revealed…

Tax Freedom Day 2011 revealed…

Category: Money

Updated: 10/01/2011
First Published: 10/01/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The day in 2011 when British workers stop having to pay tax to the Government and start working to line their own pockets has been revealed by the Adam Smith Institute.

The think-tank has calculated that employees will work for 149 days to pay their taxes this year, meaning that every penny and pound earned in the UK between 1 January and 29 May will be taken by the taxman to support Government expenditure.

As a result, Tax Freedom Day, the day when people stop working for the Government and start working for themselves, will be 30 May 2011.

According to the latest Government statistics, this means that Britons will spend three extra days working to pay their taxes in 2011 compared with 2010, when it is currently thought Tax Freedom Day came on May 27.

Playing a major part in the new lateness of the date is the rise in VAT, which the Government has introduced to help reduce the UK's record budget deficit.

Questioning the wisdom of the move, Tom Clougherty, executive director of the Adam Smith Institute, said the VAT hike will hit every household and could put the brakes on the economic recovery.

"The Government is right to give priority to cutting spending and plugging the deficit," he added.

"But as Tax Freedom Day shows, Britons are still desperately overtaxed.

"The fact that we spend almost five months working for the state - and only seven months working for ourselves and our families - is a shocking indictment of big, wasteful Government."

Dr Eamonn Butler, director of the Institute, called on the coalition to examine the possibility of making targeted tax cuts now to encourage economic growth.

"But in the long term, they need to fundamentally overhaul the entire tax system," he added.

"Lower, simpler, flatter taxes would be fairer for individuals, and better for the economy."


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