Debt repayments hampered by stealth tax hikes

Figures from accountancy firm BDO Stoy Hayward reveal that the Treasury has enjoyed massive increases in the amount of money it has collected from Britons since the Labour government came to power.

Revenue from income tax has increased by 55 per cent. Although the top rate of tax has remained static at 40 per cent, the number of people liable for this rate has increased by 65 per cent, tantamount, critics claim, to a tax rise by stealth.

Tax on petrol and property transactions are also listed as other ways the Treasury has managed to boost its coffers by stealth.

“Combined, these taxes have increased by an astonishing 283 per cent since the government came into power and have directly affected the pocket of most UK tax payers,” said Stephen Herring, tax partner at BDO Stoy Hayward.

With more money going to the Treasury, it is perhaps not surprising that many Britons are struggling to repay loans.

Those struggling will no doubt be relieved to hear that June 3rd marks tax freedom day: the first day of 2006 when Britons stop working for the government and start taking their pay packet home.

However, this year’s tax freedom day falls three days later than last June’s and nine days later than in 1997, lending weight to the claim that the Treasury is increasingly squeezing people’s finances.