28 out of the Top 30 UK areas paying the highest average income tax bills are ‘Stockbroker Belt’ towns in the South East, according to our research.
We explain this is due to the shift of the tax burden onto higher earners, who have been hit by an increase in the upper rate of tax, which now sits at 45p. A failure to increase tax thresholds in line with inflation has also pushed more people into the highest tax bands.
‘Stockbroker Belt’ towns are the leafy towns in the South East within commuting distance of London, with a large proportion of high-earning residents working in financial services and associated professions such as law and accountancy. Increasingly these are senior figures in hedge funds, private equity companies and investment banks rather than the archetypal stockbroker.
Mark Giddens, Head of Private Client Services, explains: “The Government is increasingly reliant on the wealthiest parts of the South Eastern commuter belt and London for income.”
“The Government has gradually increased the tax burden on high earners since the credit crunch. Higher taxation of wealthy individuals in the South East has proven to be an effective means to boost tax receipts, but these numbers will not make for pleasant reading for those affected.”
Taxpayers in the Top 30 areas pay an average of £9,463 in income tax each year*, almost double the UK average of £4,985.
For the second year in a row, residents of the Surrey district of Elmbridge, covering the wealthy towns of Esher, Weybridge and Walton on Thames, are paying the highest average income tax per taxpayer.
Taxpayers in Elmbridge, nicknamed the ‘Beverly Hills’ of Britain, pay an average of £16,600 in income tax each year, a 3.1% rise on the average of £16,100 paid a year earlier. On average, Elmbridge residents pay nearly twice as much income tax per taxpayer as in London and over three times the average for the UK.
Famous Elmbridge residents include Andy Murray, Sir Elton John and several Chelsea Football Club players who train at nearby Cobham. The late Russian oligarch, Boris Berezovsky, lived in the area and the Sultan of Oman is rumoured to own property nearby.
We explain that the rest of the Top five areas which pay the highest average amounts of income tax are South Buckinghamshire (primarily the upscale towns of Beaconsfield and Gerrards Cross), Chiltern (including the wealthy Buckinghamshire villages of Chalfont St Giles and Chalfont St Peter), Sevenoaks in Kent, and Waverley (the Surrey towns of Farnham and Goldalming).
Mark explains: “The huge income tax payments from households in the Elmbridge area indicate the desirability of the area among the super-rich. With many sports and entertainment stars living in the area, both income and the resulting tax bills from HMRC are sky-high and increasing.”
The two areas in the Top 30 not in the ‘Stockbroker Belt’ are London and the Cotswolds, in 14th and 29th place respectively. Both areas are also home to extremely wealthy individuals.
We state that the Cotswolds are a desirable location for the second homes of workers in the financial services, professional services and property sectors, making the demographics of the area very similar to the stockbroker belt.
At the other end of the table, Blackpool (last out of 401 areas) residents make the lowest average income tax payments in the UK, with payments of £2,290 a year, a decrease of 4.6% from £2,400 a year ago.