UK celebrates 'tax freedom day'

The taxman takes up more of our time

Earning the money to pay taxes now takes 40% of the working time of British employees, a study suggests .

According to the Adam Smith Institute (ASI), a right-wing think-tank, a rising tax burden means that it now takes one day longer to reach "tax freedom day". This is the theoretical point where employees have put in enough work to pay their taxes, and are free to start working for their own benefit.

The Institute calculates that with the average British worker facing a tax bill equivalent to 155 days' wages, 'tax freedom' day now falls on 2 June.

The ASI predicts that the government's planned spending increases could push tax freedom day to 7 June next year, and to 9 June by 2005.

"People often say that they seem to spend more time working for the taxman than they do working for themselves," said Adam Smith Institute director Eamonn Butler.

"That's an exaggeration, but it's close to the mark, since we do spend 43% of our time working just to pay taxes."

Tax and spend

"The whole trend over the last decade has been a rising burden of taxation, with no obvious end in sight."

Tax freedom day has fallen later in line with a rising tax burden for most of the past 40 years, moving from 26 April in 1965, when Harold Wilson's Labour government was in power, to 23 May in 1993, under John Major's Conservative government.

But Margaret Thatcher, the ASI's tax-cutting icon, managed to temporarily reverse the trend.

"Under Thatcher, tax freedom day grew earlier or didn't advance for 10 years," said the ASI's Dr Madsen Pirie.

In the US, the land of smaller public services, tax freedom day falls on 19 April, some six weeks earlier than in the UK.

In the welfare states of the eurozone, tax freedom day can be celebrated on 13 June, 11 days later than in the UK.