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Income tax mapped: Do you live in the highest paying area? Check here

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Income tax is usually paid on most people’s earnings from employment but it can also be levied on some state benefits, pensions, rental incomes and interest on savings. As it stands, there is a personal allowance in place which allows people to receive income up to a certain limit before tax is charged.

The personal allowance in place will allow people to earn up to £12,500 a year before any tax is levied.

Beyond this, there is a basic rate paid on earnings between £12,501 and £50,000 of 20 percent.

Those with an income between £50,001 and £150,000 will be taxed at 40 percent, with people receiving more than £150,000 a year facing an additional rate of 45 percent.

As this tax will vary based on how much a person earns/receives in income, there will likely be huge range across the UK as to where the tax is generated.

On this, UHY Hacker Young Group recently conducted research into where in the UK are the highest income tax bills.

The accountancy firm analysed the latest data from HMRC and Hamptons International & Land Registry, finding that Surrey came first out of 578 constituencies in the UK.

Individuals here are paying an average of £20,600 in income tax last year, or 28 percent of their earnings.

Four of the top ten towns paying the highest amount of income tax on average are in Surrey.

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Additional analysis from UHY revealed the “top ten tax towns” now pay an average of £14,320 income tax, an increase of 20 percent compared to five years earlier.

This is also triple the amount of tax paid on average across the UK last year, which equated to £4,726.

Other towns in the top ten include Windsor, Beaconsfield, Sevenoaks and Guildford.

On the other end of this scale, the constituencies where individuals pay the lowest level of income tax on average is in Sheffield, Brightside and Hillsborough, at an average of £2,180 or 10 percent of earnings.

Hodge Hill, Bolton and Nottingham also feature in the “bottom ten”.

Neela Chauhan, a Tax Partner at UHY Hacker Young, commented on the findings: “Towns in the traditional Stockbroker Belt remain the UK’s top income tax hotspots.”

“Esher’s popularity amongst celebrities and High Net Worth individuals has earned it the nickname ‘Britain’s Beverly Hills’.

“The area’s wealth and high average incomes means its position as the town paying the most income tax looks secure for years to come.”

“It seems likely that high earners may face even higher tax bills in the future – hikes to income tax may be looked at to help pay for coronavirus spending.”

Full details on the “top ten” can be found below:

  • Esher and Walton Surrey: Average income per person £74,300, average amount of income tax paid per person £20,600, tax as a percentage of income – 28 percent
  • Beaconsfield, Buckinghamshire: Average income per person £63,100, average amount of income tax paid per person £15,700, tax as a percentage of income – 25 percent
  • Chesham and Amersham, Buckinghamshire: Average income per person £58,700, average amount of income tax paid per person £14,200, tax as a percentage of income – 24 percent
  • Sevenoaks, Kent: Average income per person £56,900, average amount of income tax paid per person £14,000, tax as a percentage of income – 25 percent
  • Mole Valley, Surrey: Average income per person £57,600, average amount of income tax paid per person £13,700, tax as a percentage of income – 24 percent
  • Windsor, Berkshire: Average income per person £57,100, average amount of income tax paid per person £13,500, tax as a percentage of income – 24 percent
  • Hitchin and Harpenden, Hertfordshire: Average income per person £57,200, average amount of income tax paid per person £13,300, tax as a percentage of income – 23 percent
  • Henley, Oxfordshire: Average income per person £54,900, average amount of income tax paid per person £12,800, tax as a percentage of income – 23 percent
  • Guildford, Surrey: Average income per person £53,900, average amount of income tax paid per person £12,700, tax as a percentage of income – 24 percent
  • Runneymede and Weybridge, Surrey: Average income per person £52,900, average amount of income tax paid per person £12,700, tax as a percentage of income – 24 percent

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