Income tax map: How UK tax compares with rest of Europe – including France and Germany

Rishi Sunak may have to break income tax promise says expert

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High earners in the UK are more heavily burdened than 11 European countries, according to the latest highest income tax band data. Someone in Britain earning £100,000 effectively loses 45 percent of their pay to HM Revenues and Customs once income tax is taken. This is more than three times the amount for high earners in Hungary and the Czech Republic.

Tax systems across Europe work differently, however, and generally most involve a tiered system of taxation based on income level.

Britain’s tax system is made up of income tax bands at 20, 40 and 45 percent – plus national insurance contributions of a further 12 percent.

Higher earners pay income and social security taxes that are on a par with Luxembourg and Spain, according to the Tax Foundation.

But British earners are much better off than those in Denmark, France and Austria.

Personal Income Tax rates across Europe reveal how average earners compare in these countries.

The top statutory personal income tax rate indicates how much those in the top earnings bracket pay in terms of income tax.

The highest income tax rate in 2020 was in Denmark at 55.9 percent, followed by France at 55.4 percent.

Austria was in third place in 2020 with 55 percent, followed by Greece, Portugal and Belgium at 54, 53 and 52.9 percent respectively.

The rest of Europe’s tax rates are as follows:

  • Sweden: 52.3 percent
  • Finland: 51.2 percent
  • Slovenia: 50 percent
  • Netherlands: 49.5 percent
  • Ireland: 48 percent
  • Germany: 47.5 percent
  • Italy: 47.2 percent
  • Iceland: 46.2 percent
  • Luxembourg: 45.8 percent
  • The UK: 45 percent
  • Spain: 43.5 percent
  • Switzerland: 41.7 percent
  • Turkey: 40.8 percent
  • Norway: 38.2 percent
  • Poland: 32 percent
  • Lithuania: 32 percent
  • Latvia: 31.4 percent
  • Slovakia: 25 percent
  • Estonia: 20 percent
  • Hungary: 15 percent
  • Czech Republic: 15 percent.

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This is all contingent on the income level at which the top statutory personal income tax rates apply.

Expressed as a multiple of a country’s average wage, the thresholds vary from 0 in the Czech Republic, Hungary and Latvia to 22.5 percent in Austria.

This means those in the Czech Republic, Hungary and Latvia apply their flat personal income tax on all income earned.

Conversely, Austria’s top statutory rate of 55 percent only applies to those earning more than €1 million.

The figures for the rest of Europe are as follows:

  • France: 15.4 percent
  • Portugal: 14.4 percent
  • Greece: 11.1 percent
  • Turkey: 8.6 percent
  • Lithuania: 6.3 percent
  • Germany: 5.4 percent
  • Slovenia: 4.7 percent
  • Luxembourg: 3.7 percent
  • The UK: 3.6 percent
  • Switzerland: 3.5 percent
  • Slovakia: 3.3 percent
  • Italy: 2.8 percent
  • Spain: 2.4 percent
  • Finland: 1.9 percent
  • Poland: 1.7 percent
  • Norway: 1.6 percent
  • Ireland: 1.5 percent
  • The Netherlands: 1.3 percent
  • Iceland: 1.3 percent
  • Denmark: 1.3 percent
  • Sweden: 1.1 percent
  • Belgium: 1.1 percent
  • Estonia: 0.4 percent.

Prime Minister Boris Johnson and the Chancellor of the Exchequer Rishi Sunak have reportedly butted heads in recent months over Income Tax.

Mr Johnson and Health Secretary Sajid Javid are in favour of measures which would introduce a levy of around 2p on Income Tax.

But Mr Sunak is reportedly strongly against it.

A Whitehall source told The Sunday Times: “It’s fair to say there are big differences of opinion and Rishi Sunak is not keen.”

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