Super-rich pay more UK tax, without Finnish openness

 
Man in sportscar Should we know the tax affairs of the super-rich?

One of the most fundamental principles of the British tax system is privacy.

But attitudes differ in some other countries. I have just been reminded of this, having seen a visualisation of the details of Finland's highest taxpayers.

Compiled by a Finnish data journalist Jens Finnas, it takes their names, gender, age, region and other facts to present his personal graphic exploration of their characteristics (with a political point at the end).

It is based on publicly available tax data, released last month for 2010 and used by the media to compile league tables and generate searchable databases.

Boomed

Of course none of this information would be accessible on British tax payers, however big their individual contribution to the Treasury's receipts.

But under the Freedom of Information Act, the BBC has obtained some information on the collective amount of income tax paid by the UK's biggest taxpayers.

This shows that the number of super-rich individuals paying tax in the UK has increased dramatically, which must reflect how the incomes of those at the top of the scale have been growing. And the amount of income tax obtained from such people has therefore also boomed.

Over a five year period up to 2010 (the latest data available) the number of UK taxpayers with an annual taxable income over £10m more than doubled from 131 to 274.

Prevented

The income tax this growing group had to pay between them increased a little more rapidly, jumping from £0.8bn to £2.1bn. (This was before the 50 per cent top tax rate came into force in 2010/11).

UK taxpayers: taxable income over £10m

Tax year Number of individuals Total income tax liability (£bn)

Source: HM Revenue & Customs FOI responses

2005-06

131

0.8

2006-07

181

1.3

2007-08

218

1.7

2008-09

192

1.7

2009-10

274

2.1

There's no likelihood that the British tradition of individual tax secrecy will change. And perhaps the Scandinavians could actually be moving in this direction.

In Norway the government this year prevented media sites from promoting their own searchable tax databases of the kind created in the past by, for example, the newspaper Aftenposten or the TV2 television network, although figures for individuals can still be used in stories about them.

And Norwegian citizens can still search the database on the official site of the country's tax administration - but I gather they first need to use their national identity number to register.

 
Martin Rosenbaum, Freedom of information specialist Article written by Martin Rosenbaum Martin Rosenbaum Freedom of information specialist

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Comments

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  • rate this
    -5

    Comment number 1.

    More money can be saved if all government spending to the penny is published.

    For companies, company name and vat number needs to be published.

    For individuals, name and postcode.

    It should be a condition of receiving tax payer's money.

    That way lots of fraud can be detected.

    Ideally, the government should offer a percentage as a reward.

  • rate this
    +4

    Comment number 2.

    Any one want to bet that the figure for income tax paid for 2010-11 will be a lot less than £2.1bn

  • rate this
    +2

    Comment number 3.

    I wonder how much of this increase is attributable to the information procured by HMRC on off shore bank accounts which was given to the tax man on computer CD's a couple of years ago ?
    I can not see that rich people have suddenly decided to become more egalitarian so it's got to be down to better cough up before a visit by the tax inspector.
    Watch it go back down once another safe haven is found.

  • rate this
    0

    Comment number 4.

    Finland Taxation is progressive - higher the income, higher rate of tax payable. In 2011. income tax rate for an individual is between 6.5%-30%. IN ADDITION to direct taxation there is also municipal tax. This tax is payable by an individual on his or her income & fluctuates between 15% - 20% depending on the municipal authority. Church tax of 1%- 2% is also payable.

  • rate this
    0

    Comment number 5.

    It would be interesting to see these figures in terms of those hitting the 50% income tax bracket. You could see how how much of the estimated tax bill is actually being received and thus how much is being evaded.
    Are those in the lower tax brackets paying a higher percentage of tax due than those in the higher?

  • rate this
    0

    Comment number 6.

    If everyone's tax and income was made public, it would be too easy for criminals to know who is best to target. Even in an ordinary street, with ordinary incomes, some are a far more worthwhile target for fraudsters and criminals generally than others.

  • rate this
    +1

    Comment number 7.

    If 274 people between them paid 2.1 billion in tax, then the rich are not all tax dodgers.

  • rate this
    0

    Comment number 8.

    I could not care less if people knew how much I earn and how much tax I pay, so publish everyone's for all I care.

  • rate this
    +1

    Comment number 9.

    8. Green Future
    "I could not care less if people knew how much I earn and how much tax I pay, so publish everyone's for all I care."
    Fine that's up to you but some people don't want this info published for the very good reasons in comment number 6.
    And i look forward to your full name, address, earnings, tax paid, etc being published on this comment board, as you don't mind us all knowing

  • rate this
    0

    Comment number 10.

    I believe that Scotland is much more likely to move towards a transparent and more progressive tax system.
    The UK is still so tied in to the House of Lords, Aristocracy, inherited Wealth, Old School Ties etc etc.
    Most of Europe - and particularly Scandinavia - have a more meritocratic outlook.
    Westminster and the City of London really hold back the rest of Britain.
    Slainte Mhor

  • rate this
    0

    Comment number 11.

    #10 Only if Scotland becomes independent or there is a wholesale change to the devolved rights as ability to change income tax rates is very limited.

    UK had a simple and progressive income tax system: 0% then 20% then 40% then Labour came to power.

    Of course it would help if we scrapped NI and combined with income tax to get true rate

  • rate this
    0

    Comment number 12.

    "UK had a simple and progressive income tax system: 0% then 20% then 40% then Labour came to power."

    Currently, with income tax/NI combined people pay at the following rates as your income increases:

    0%
    12%
    32%
    42%
    62%
    42%
    52%

    Of course, the position becomes a bit more complicated if dividends are involved.

  • rate this
    -1

    Comment number 13.

    How very true.

    Personally I would prefer a simple flat tax with virtually no reliefs except for pension and charity, couple that with a starting position where no one pays tax until they earn more than £10,000 pa (£12000 is possible).

    Treat income and capital gains as the same.

    Progressive is just code for "we hate the rich"

  • rate this
    0

    Comment number 14.

    If only the huge increase in numbers earning over £10m was reflected further down the scale, where, since 2008 most of us have seen our incomes frozen or cut.
    The statisitcs should be public but individual tax details should definitely remain confidential.

  • rate this
    0

    Comment number 15.

    "One of the most fundamental principles of the British tax system is privacy."

    maybe the fact that 6 of out 10 of the world's top tax havens are controlled by the UK plays part in this? only corrupt people and corporations benefit from this type of 'privacy'.

  • rate this
    0

    Comment number 16.

    15 - I had no idea there was a league table of tax havens. Where did you find it? Is it really the case that only 4 out of the following make the top 10?

    Andorra
    Cyprus
    Ireland
    Liechtenstein
    Luxembourg
    Mauritius
    Monaco
    Panama
    San Marino
    Seychelles
    Switzerland
    Campione d'Italiction
    Delaware
    Jebel Ali Free Zone
    Labuan
    Netherlands Antilles
    Texas

 

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