The top 1% pay a third of income tax and capital gains tax

The top 1% of taxpayers are responsible for around a third of the total paid in Income Tax  and Capital Gains Tax (CGT), new data from Wealth Club, the UK’s largest non-advisory investment service for tax-efficient and private market investments, shows.

Its Freedom of Information request to HMRC found 500,000 individuals paid £93.828 billion in income tax and CGT in the 2023/24 tax year equivalent to 33% of the total £288.5 billion raised. The amount they contributed increased nearly £4 billion from the 2022/23 tax year when the top 500,000 paid £89.9 billion in combined Income Tax and CGT.

It is a similar story for the top 100,000 taxpayers who paid a total of £54.9 billion – equivalent to nearly a fifth (19%) raised in the 23/24 tax year. That is around £1.2 billion higher than in the previous tax year.

Wealth Club says the FOI data underlines the extent to which the Government relies on a small group of individuals to fund the total tax bill. It also brings into sharp focus the potential impact on Government revenue should these people leave the UK which could be triggered if further taxes on the wealthy are introduced. The top 100 taxpayers in the UK paid a staggering £4.1 billion in income and capital gains tax last year.

Alex Davies, founder and chief executive of Wealth Club said: “A very small group of individuals is responsible for a disproportionately large share of the nation’s tax revenue.”

If just a handful of these wealth creators were to leave, the fiscal impact would be both immediate and severe. The government needs to think very carefully before slapping another round of taxes on wealthier individuals in the forthcoming Budget. For instance, if the top 100 taxpayers decided to up sticks and leave the country – which could easily happen – that would be an immediate loss of £4.1 billion in tax revenues.”

“Rather than penalising success, we should be creating a stable and attractive environment where entrepreneurs and wealth generators choose to remain, invest, and contribute to the nation’s long-term success.”