Leafy Surrey suburb Elmbridge has retained its top spot as home of the UK's biggest taxpayers with a 10% hike to reach a £20,500 average income tax payment per person this year, compared to the national average of just £4,794, according to analysis by UHY Hacker Young
The firm says the high levels of tax paid reflects how the area is populated with wealthy sportspeople, entertainers and musicians, as well as City executives due to its proximity to London. Elmbridge has an average income of £73,600, double the UK average of £30,688.
Famous residents of the local area, which covers Esher and Walton, include Andy Murray and Kim Sears, John Terry, Sir Elton John, Antonio Banderas and Chris Tarrant.
UHY Hacker Young says Elmbridge has now increased its lead on other wealthy areas in the home counties, including second place Beaconsfield in Buckinghamshire. The average payment in Beaconsfield was £14,700 last year, up from £13,900 the year before. Chesham & Amersham, which is also in Buckinghamshire, came third with £14,300.
There has been a 20% increase in the amount of income tax collected from the top five towns with the highest average payments per person over the last five years, increasing to £15,540, up from £12,380 in 2010/11. Meanwhile, the national average increased 16%, up from £4,150, over the same period.
UHY Hacker Young says the increasing amount collected from the ‘stockbroker belt’ around London may be the result of fiscal drag, which occurs when income tax brackets do not move with inflation. As a result, more individuals fall into upper tax brackets, increasing overall tax payments.
While inflation has increased 26% since 2008, the higher rate tax threshold has only risen 13.5% over the same period. As a result, nearly five million taxpayers have been pulled into paying the 40% or 45% tax rate, which the government is unlikely to adjust substantially as it raises additional revenue, although the Chancellor Philip Hammond has pledged to raise the 40p base threshold to £50,000 by 2021.
UHY Hacker Young says there are likely to be more people subject to fiscal drag in areas with higher average incomes, such as Elmbridge and Beaconsfield.
Mark Giddens, partner at UHY Hacker Young, said: ‘“The ‘Beverly Hills of Britain” has strengthened its position as the UK’s number one tax hotspot.
‘HM Treasury is increasingly reliant on the tax collected from London and the south east, which reflects the continuing success of the economy in this part of the UK.’
Top 10 constituencies with the highest average income tax per taxpayer last year
Report by Pat Sweet
