UK tax level rises to highest on record – OECD
The UK’s tax level across the economy has increased to its highest rate on record, according to new data from the OECD.
It came as separate figures showed the UK also now faces the highest level of property taxes across the developed world.
The OECD’s (Organisation for Economic Co-operation and Development) annual revenues statistics update found the total tax-to-GDP ratio across the UK hit 35.3% for the 2022/23 financial year – the highest since OECD records began in 2000.
It represents a 0.9 percentage point increase from the 34.3% record a year earlier.
It ranks the UK as having the 16th highest rate of 38 OECD countries, and is 1.3 percentage points above the group’s average of 34%, in relation to tax competitiveness.
Separately, new analysis from commercial real estate firm Altus Group revealed the UK has the joint-highest rate of property taxes across the 38 OECD countries.
It found the UK has a ratio equivalent of 4% of property taxes to GDP.
The research said this compares with an average of 1.5% across the European Union and a 2.9% average against countries in the G7 group of advances economies.
In the UK, property taxes include all tax receipts from council tax, business rates, SDLT (stamp duty land tax) and LBTT (land and building transaction tax) in Scotland.
Alex Probyn, president of property tax at Altus Group, said: “The United Kingdom is characterised across the developed world as having higher levels of revenue from taxes on property.
“Our clients already tell us that the level of the business rates tax is a disincentive to invest and an effective tax rate of 54.6% next year for commercial property will do nothing to dispel that.”
The Office for Budget Responsibility has also forecast a further hike in UK property taxes, with business rates set to increase by £3.2 billion from April 1 because of an inflation-linked rise, while council tax receipts are set to grow by £2.3 billion.
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