The United Kingdom

TAX SYSTEM

MADE BY: ESTELA HYTRA, MATEUSZ SMOLEN, MADS TARNAWSKI

1 of 3
 The United Kingdom is positioned in Europe, in the north-west hemisphere with the population of
approximately 68.9 million. The currency used is named “British Pounds” with the symbol being
£. The UK consists of 4 parts: England, Scotland, Wales and Northern Ireland. The Capital city of
England is London and the o cial language is English.

According to data from PricewaterhouseCoopers, income tax rates for the highest earnest are
relatively low in the UK compared to other European OECD nations.

The Tax System is divided into 4 tax bands:

• The lowest being personal allowance (up to £12,570 with the tax rate of 0%)

• Second being basic rate (£12,571 to £50,270 with the tax rate of 20%)

• Third being the higher rate (£50,271 to £125,140 with the tax rate of 40%)

• The highest being additional rate (over £125,140 with a tax rate of 45%

* The tax rates may di er in Scotland

With Euro (€ or EUR) translating in about £0.88, we prepared three di erent examples of earnings
and how much tax would be paid for each of them.

• The rst example was given for €100,000 earned by a person per year where transferred into
pounds and taken the 40% tax rate it could be written as the equation of
(100,000 × 0.88) × 0.40 which equals to £35,218. If we brought it back to EUR it would be
about €39,981.

• The second example was given for €1,000,000 earned by a person per year where transferred
into pounds and taken the 45% tax rate it could be written as the equation of
(1,000,000 × 0.88) × 0.45 which equals to £396,208. If we brought it back to EUR it would
be about €449,789.

• The last example was given for the minimum UK’s salary earned by a person per year.
(22,363 × 0.88) × 0.20 which equals to £3,936. If we brought it back to EUR it would be
about €4,487.

In conclusion, we believe that the tax system in the United Kingdom is clearly not the hardest to
operate in. Comparing it to other countries in Europe, the UK’s system may be considered as one
of the simplest for an average citizen but it might be more complex for more nancials a airs. The
tax infrastructure is well-established and has clear rules.

2 of 3
fi
ffi
ff
ff
fi
ff
Bibliography:
- https://www.gov.uk/income-tax-rates

- https://chat.openai.com/

- https://www.worldometers.info/world-population/uk-population/#:~:text=Population
(LIVE)&text=The current population of the,the latest United Nations data.

- https://www.personio.com/hr-lexicon/uk-minimum-wage/

3 of 3