Politicsincome taxUK Recoveryuk taxes

Richest 1% Doing Best Out Of UK Recovery, Official Figures Show

Richest 1% Doing Best Out Of Osborne's Recovery
The Huffington Post UK
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Britain's Chancellor George Osborne poses for the media with the traditional red dispatch box outside his official residence at 11 Downing Street in London, as he departs to deliver his annual budget speech to the House of Commons, Wednesday, March 19, 2014. (AP Photo/Kirsty Wigglesworth)
ASSOCIATED PRESS

The richest 1% have been the biggest winners out of the UK's economic recovery that has so far come about under George Osborne's chancellorship, according to official figures.

Analysis of HM Revenue & Customs figures by the House of Commons Library found the top 1%, around 300,000 people, enjoyed an increased share of after-tax income from 8.2% in 2012-2013 to 9.8% in the following financial year.

By contrast, the bottom 90%, around 27 million people, saw their share fall from 71.3% to 70.4%.

The estimates are contained in the latest "Income Tax Liabilities Statistics" published by HMRC and cover 2012, the year when Osborne cut the top rate of income tax on earnings over £150,000.

Shadow chief secretary to the Treasury Chris Leslie said that the analysis provoked that ordinary workers had been "left behind".

"David Cameron and George Osborne are trying to claim the cost-of-living crisis is over, but these official figures expose what's really happening under the Tories," he said.

"With the help of a huge tax cut from this government the very richest are feeling a recovery, but everyone else is being left behind as growth finally returns. What we need is a recovery for the many, not just a few at the top.

"That's why we need to reform our economy to mend the broken link between the wealth of the nation and the living standards of hardworking Britain. The Conservatives are so out of touch they don't even understand there's a problem."

However Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, expressed scepticism about the figures.

"There was a tax cut of the 50% rate to 45% in the years being compared so it isn't rocket science that the higher income earners would be better off in the comparison period. Therefore a longer term comparison would make more sense," he told HuffPostUK.

"In addition, it would be useful to encourage such debate to also encompass the benefits regime, and to count tax rates and tax credits together."

See also: 10 tax rises George Osborne could do to avoid £25bn more spending cuts

10 Tax Rises To Avoid £25 Billion Extra Cuts
Slap on a mansion tax? (01 of10)
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The tax, which could raise as much as £2 billion a year, is supported by Labour and the Lib Dems. It would simply add a rate of 1% on the properties worth more than £2 million.
Why not increase fuel duty? (02 of10)
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Osborne plans to keep fuel duty frozen until 2015 in a bid to keep motorists on side. If Osborne added just 3p to fuel duty, he could raise £1.5 billion (according to Treasury estimates).
Tax those pasties!(03 of10)
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Widespread "pasty tax" protests forced George Osborne to back down on a 20% VAT on heated pasties to fix an "anomaly" in the system.If he went back and brought it in, he could raise over £100 million.
Try not cutting corporation tax?(04 of10)
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Stopping plans to cut corporation tax from 21% to 20% in 2015 would save £800 million.
Why not boost the bank levy? (05 of10)
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It currently aims to raise £2.5 billion a year, but Osborne could try making it tougher to get a bit more out of them, now that banks like Lloyds are back making billions in profit.
Bring back the 50p tax for top earners?(06 of10)
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According to the Treasury's estimates in 2008 and 2009, raising the tax rate from 40p to 50p would raise £2.4 billion - so expect a good chunk of that if you reversed the cut.
How about a Robin Hood tax? (07 of10)
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Slapping banks with a 0.05% tax on their financial transactions could raise up to £20 billion a year, campaigners say.
Are private schools really charities? (08 of10)
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Stripping private schools of their tax reliefs and charitable status could net at least £100m a year.
Why not go after rich pensioners?(09 of10)
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Slashing the tax relief for rich people's pensions could save up to £1.8 billion.
How about cracking down on tax dodgers? (10 of10)
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Osborne could actually try getting tax dodgers to pay up - and he wouldn't have to do anything else. Money owed to the Treasury in tax, named the "tax gap", stands at £35 billion (according to HMRC), which would be more than enough.
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