UK top earners pay low effective tax rates, CenTax report

Research from the Centre for the Analysis of Taxation (CenTax) indicates that only 10 per cent of the UK’s highest earners pay close to the top headline income tax rate. Based on an analysis of anonymised HM Revenue & Customs data from 2022, the study found that a quarter of the richest 0.01 per cent of the population paid an effective average tax rate of 20 per cent or less.

This discrepancy is attributed to the fact that the wealthiest individuals often generate a larger share of their income from capital gains, which are taxed at lower rates than earnings. CenTax has called on the government to equalise capital gains and income tax rates in the upcoming budget, estimating that such a move could raise an additional £19.7bn for the Treasury by 2030.

Separately, discussions regarding the UK’s total tax burden—the amount of tax revenue collected as a percentage of gross domestic product (GDP)—have intensified. For the 2025/26 financial year, tax revenues were equivalent to 35.9 per cent of GDP, marking the fourth-highest figure since records began in 1948/49.