Where UK Falls After Europe’s Income Is Compared

20 September, 2021 by Denzil Otieno 4 mins read Category:  Money Personal Finance

Because the increased taxation in the United Kingdom has caused hiccups among the working class, it has been proven that UK workers do not pay as much taxes as other nations.

Additionally, despite the coronavirus pandemic, the Chancellor has not increased Income tax: however, there has been an increase of National Insurance by 1.25 % commencing in April 2022.

A Deep Understanding of Income Tax

In the United Kingdom, taxpayers pay income tax, but they also receive a Personal Allowance of tax-free income, set at £12,570 for the current financial year.

Besides, income tax is divided into three rates: the basic rate, the higher rate, and the supplementary rate.

Those who earn between £12,571 and £50,270 pay 20% income tax while those earning between £50,271 and £150,000 pay 40%.

Additionally, those who earn over £150,000 a year are subject to an additional 45 % tax rate.

Workers in Other Countries Still Pay More Income Tax Than UK Workers 

There are nations where workers pay a lot more than in the UK, yet the UK’s income tax is not typically regarded as excessive.

The top legal personal income tax rates vary widely between European countries, depending on how much money you make.

For instance, Germany has a 47.5 % tax threshold for high income, i.e. those making more than €282,934 per year.

Additionally, its income tax system is progressive, meaning that as taxable income rises, so does the average tax rate.

In a similar fashion to the UK, where income tax is progressive and low- and middle-income workers pay little or no tax, our Irish neighbours pay a marginal income tax rate of up to 48%. This rate is applied to middle- and high-income earners equally.

On the other hand, Slovenia has a 50% top tax rate, as does Austria, with a 55 % top tax rate.

However, it is essential to note that Austria’s 55 % top statutory tax rate only applies to anyone earning over €1 million per year.

Nevertheless, Sweden has the world’s highest income tax rate, with taxes amounting to 57.1% of yearly income due to its post-industrial development.

Germany and Other Countries Keep it Low. 

Some nations have much lower taxes than the United Kingdom and other developed economies, including Germany.

For instance, Czechs and Hungarians pay a maximum personal income tax rate of just 15%. They both have flat tax rates that apply to all workers regardless of income.

On the other hand, Estonians are only required to pay a maximum of 20%, which is a savings of 25% compared to the UK.

However, our Northern European country’s proportional flat tax rate applies to anyone earning more than €6,097 per year.

Middle-class Nations include Slovakia having a personal income rate of 25%, and Poland having a rate of 32%

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