UK Tax higher than French?

[Mjc]

Thought you might be ineterested in the following recent article.
Reproduced without comment.


Britons pay more tax than almost anybody else in Europe, and save the least, research by The MarketPlace at Bradford & Bingley claimed today.
The study, which compared taxation in the UK, France, Germany, Spain and Italy, found that Britons lose 29% of their total income to tax, second only to Germany, where the tax man takes 30%. At the bottom of the scale, the French lose just 22% of their total earnings to tax, while in Spain they part with 23%, and in Italy 27%. Ian Darby of The MarketPlace said: "This means the average UK household has to work from January 1 to April 15 to pay their gross income tax bill. In France, households have fulfilled their tax obligations almost four weeks earlier, on March 22."

Income and wealth tax, such as capital gains tax, takes up 13% of Britons gross pay, compared with 15% in France and just 7% in Spain. Social contributions, such as national insurance, account for a further 16% of Britons' incomes, less than the 20% German's contribute, but more than double France's 7%. Yet despite the relatively high tax burden Britons still have a higher level of disposable income in terms of cash, because average income per household is higher in the UK. Britons have an average annual income per household of 35,917, which gives a disposable income of 24,407 after tax and other transfers such as life insurance premiums.

The sterling equivalent of average total household income per household in Italy is 24,111, which leaves 17,051 after tax. However, Italians still manage to save more than 10% of their disposable income, compared with Britons who set aside just 5%.

In percentage terms, Britons are saving less than any of the countries in the study, with the French saving 15.8% of their take home pay - nearly three times more than the British - and the Germans putting aside 15.1%, while the Spanish manage 11.6%. Mr Darby said: "With the debate on UK pension funds continuing, British workers are being encouraged to put away a lot more than they'd expected for retirement. If our tax bill is increased this year it may put added strain on our ability to save for our future."

Another reason why workers in other countries are able to save more could be the comparatively lower cost of living on the Continent.

According to the research, which was carried out for The MarketPlace by the Centre for Economic and Business Research, the cost of living in Spain is 26% lower than in the UK, while in Italy it is 23% less. The study also found that Britons are having to work longer for their money than their European counterparts, with people in the UK averaging a 8.7 hour day, an hour more than the average Italian works.

Workers in the UK also have fewer days off, with the employees getting an average of just 28 days holiday a year, compared with 47 days in France and 46 in Spain.

[Teamedup]

I have always heard that the french pay one of the highest 'tax' rates in europe. This being based on all the 'taxes and stoppages' one pays on everything rather than comparing just income tax for example. What this was based upon was average earnings and the amount that was left at the end of the day, once the government had wrung every bit of money out of that sum that they could.

We can all play with statistics, but for me a good comparison of this would always be what we start off with and what we end up with.

I keep saying french wages are lousy. I know that french families think that around 13000ff as a pick up salary per month is good, in fact very very good and then they have their income tax to pay on top of that.

[martinetchris]

LAST EDITED ON 13-Nov-02 AT 09:55 AM (GMT)

mjc

Thanks for this - always interesting to see different perspectives on an issue !

By way of example, the following are the figures quoted by PKF in "Taxation in France 2001" (I repeat - I don't have shares in PKF !!). The figures are sourced from 1997 so may/will have changed since, and are NOT percentages of taxation levied upon individuals, but are levels of taxation as a percentage of gross national product :

Country : total taxes (incl income tax; corporation tax; social security; capital taxes and VAT)

France : 46.1%
Germany : 37.5%
UK : 35.3%
USA : 28.5%
Japan : 28.4%

The biggest difference between France and UK was to be found in Social security (19.2% and 6.0% respectively). Figures for income tax are 6.8% and 9.1% respectively.

Perhaps a statistician or economist amongst us can tell us what a comparison of the two sets of figures reveal !

Thanks again

Best wishes

Chris and Martin