We pay an average £5,000 per year in indirect taxes


UK employees pay an average of £1.25 an hour in tax, according to a new analysis of Government revenues.  Of this, only 69p of that is in the form of deductions from wages.

The rest is in “indirect” taxation.

An average worker pays £11,000 a year in tax to the Government – around £30 a day.

Indirect taxes, which include VAT, council tax and other duties, account for nearly £5,000 of this, equating to 56p an hour.

National Insurance and income tax account for the remaining £6,000, with the total bill equating to 40pc of average earnings.

The number-crunching by financial group MetLife also revealed a significant gender disparity.

On average, male workers pay nearly double the direct and indirect tax of their female counterparts, at £14,196 compared to £7,762.      Employees aged 40-49 pay the most tax on average, at nearly £1.50 an hour, or £35 a day, dropping to £23 a day for employees aged 60 and over.

Although there are no changes to income tax or national insurance forthcoming – aside from the increasing personal tax free allowance – indirect taxes such as insurance premium tax and council tax have been on the rise.

Councils were entitled to increase council tax by up to 4pc this year, with many councils choosing to increase tax by close to the maximum permitted.

In March, Telegraph Money took a look at the total lifetime tax bill of a middle-class professional, including income tax, capital gains tax, inheritance tax and more.

Experts flagged the lack of clarity surrounding the current tax system as one of the major challenges currently faced.

Martin Daunton, emeritus professor of economics at the University of Cambridge, said: “I don’t think people quite realise what’s happening to them until the last minute…..there’s no way to stand back and make sense of it as a whole; it’s too complicated, which is dangerous.”

Jonathan Isaby, Chief Executive of the TaxPayers’ Alliance, said that the splitting of income tax and national insurance is one action that should be looked at. Merging them, he said, “would be a very good move towards transparency and simplicity”.