149 days of tax

Tax Freedom Day is the day when Britons begin working for themselves rather than the taxman and falls on May 30 in 2011, compared to May 27 in 2010. The Adam Smith Institute calculates this each year and this is the latest.

http://www.adamsmith.org/blog/tax-and-economy/tax-freedom-day-will-be-30-may-2011/

The main reason for the three extra days appears to be the rise in VAT (Value Added Tax), which increases from 17.5 per cent to 20 per cent on January 4.

Tom Clougherty, executive director of the Adam Smith Institute, described Britons as being “desperately overtaxed”.

It is interesting to view the tax freedom date and the comments of Mr Clougherty alongside the recent Government announcement that a review of the tax system will be undertaken with 'tax simplification' the aim. Call me a cynic but I just don't see the taxation system becoming simplified anytime soon and I have less faith that the overall tax burden on the nation will fall...

Tax Freedom Day has moved on six days since 2009, but remains less than the previous decade’s peak of 2006 when Britons needed to work until June 4 before they began working for themselves rather than the taxman.

So this means the average Briton will have to work for 149 days to pay their taxes in 2011. Every penny earned in the UK between January 1 and May 29 will be taken by the taxman to support government expenditure.

I have long maintained with my client facing work that much of my value lies in helping clients to pay less tax on their income - legitimately - and that whilst I cannot promise returns of x% or y% each year I can guarantee savings of 20% or 40%. This makes a big difference in capital needed to support income and the benefit increases over time, especially when tax freedom day moves later in the year.