Are taxes higher in the UK

Are Taxes Higher in the UK? – A Basic Guide

The competition in different sectors of the industry can never be denied among developed countries and so, is the tax comparison. Just like the head-to-toe struggle observed a few months ago between the UK and US for the Davis Cup, so is the struggle of having higher taxes matters a lot in the industry to know which country is better off for a living. Do people often enquire about ‘Are taxes higher in the UK?’ This article is based on the relevant and frequently asked questions about whether the types of taxes are the same as implemented in other developed countries, tax higher in the UK, are other countries a better living options because of the higher taxes in the UK, and what are types of lower taxes.


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Tax Types in the UK – Are They the Same as in Other Countries?

There are several types of taxes implemented in developed countries like the UK, US and others. In the UK the main types of taxes that are implemented in different sectors include the following:

  • The tax on the property is known as property tax
  • Value Added Tax is also known as VAT
  • National insurance
  • Income tax

In other countries like the UK, the tax brackets are broken down as given in the following:

  • Tax on the purchases you make
  • Tax on what you own
  • Tax on your earnings

This breakdown of tax is quite simple and easy to understand as well.


Are Taxes Higher in the UK?

Several people enquire about the taxes types that are implemented in the UK. Whether they are higher than the other tax types implemented in developed countries. Well, we will get delve into the comparison to have a clear picture of it first. When we talk about personal allowance, the tax rate tends to be 0% on the amount of £12,570 or less than this. The taxable rate of the income between the range of £12,571 – £50,270 is 20% in the UK which is the basic tax rate. the higher tax rate for the income band £50, 271 – £150,000 is 40%. And when the income band touch the limit of £150,000 or goes over it, the additional tax rate is 45%.

On the other hand, if we take the example of the US, a developed country for a tax rate comparison, we observe a few differences that are further explained. The tax rate is 10% when your tax band is up to $10,275. The tax rate is 12% when your income is between the amount of $10,276 – $41,775. 22% for the taxable income between $41,776 – $89,075. The tax rate is 32% for the income range of $170,051 – $215,950. 35% for $215,951 – $539,900 and 37% for the income range of $539,901 or more. This comparison speaks for itself and explains that the tax rate in the US is comparatively lower than in the UK.


Is it Better Off in Other Countries Because Of Higher Taxes in the UK?

Better off in the other country than the UK because of the tax rates is not a very powerful statement. The income tax rates are comparatively lower in the UK.  Before you decide to reside in the UK, you must gather information about the tax rates and how are they relevant and the most beneficial in the UK. A few of the benefits are listed below for you:

  • A state pension programme is preferable in the UK which will give you benefits in several ways.
  • The housing aid for the homeless, some developed countries are observed to have more homeless individuals than they are in the UK.
  • The cost of living help and other benefits related to social security.
  • A free healthcare system is offered in the UK, whereas, the healthcare programme is quite costly in other countries.

Moreover, you will not find the better off statement justifies because you are ensured that you are paying higher taxes for a better security and social programme to make a better living in the UK.


What are Other Types of Lower Taxes?

Now that we have an idea about some of the developed countries charge 37% tax for the amount of income if reaches or goes above £500,000. You must be wondering about the details related to the inheritance tax and sales tax comparison with the UK tax practices.


1- Sales Tax

Sales tax is implemented in the US for the consumers, food and clothes are a few products that come under the obligation of the sales tax. The average rate in every state revolves around 5%. It is to be collected by the final purchase of the final customer. A similar kind of tax is implemented in the UK and is known as the vat. The following listed points are prominent to make a comparison between the vat and the sales tax.

  • VAT is the abbreviation of the value-added tax.
  • When a product is going through the process of production, VAT is collected several times at different stages of production.
  • Sales tax and vat are not exactly the same but are not far off as well.
  • 20% is known to be the standard rate for vat.


2- Inheritance Tax

Inheritance tax is implemented in the six states of the US. However, in the UK everyone has to pay the inheritance tax at the rate of 40%.


The Bottom Line

Now that you have gathered a fair amount of information about ‘Are taxes higher in the UK?’, we can say that the UK tax rate and the tax system are designed to ensure the well-being of the people by providing a secure and good society to live in.


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Disclaimer: The information about ‘Are taxes higher in the UK?’ is provided in this article including text and graphics. It does not intend to disregard any of the professional advice.

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