‘Tech-hub’ Silicon Roundabout sees highest increase in Income Tax in the year – up by over a fifth

Publications that covered this story include the Daily Mail on 17 July.

  • Fintech centre Shoreditch sees 41% rise in Income Tax take in five years
  • Surrey’s ‘Beverley Hills’ of Britain still highest Income Tax area outside London

Residents around Silicon Roundabout in East London have witnessed the biggest rise in their tax bills of all UK areas in 2014/15 (the most recent, available data), our latest research shows.

The new statistics show average Income Tax payments per person in Silicon Roundabout, Old Street, and Finsbury Park* have risen to an average of £19,500 in 2014/15 up 22% from £16,000 in the previous year. This figure is nearly four times the average national Income Tax payment of £5,100.

Old Street Roundabout – known as Silicon Roundabout – has become a key hub for the digital and technology sector in the UK. The surrounding area has become a popular and fashionable place to live, particularly with entrepreneurs in the strong local start-up community.

Residents in Shoreditch, another key tech hub, have also seen their Income Tax bills rise considerably recently. Since the 2010 Election, the average amount of Income Tax paid in Shoreditch increased dramatically to £8,240, up 40% in five years – the fifth highest rise in the entire country over the same period.

Mark Giddens, Head of Private Client Services in our London office, says: “It is true that residents of this slice of London have seen their income rise but they’ve also seen the tax they pay rise faster.”**

“The increase in tax take from start-up hubs such as Silicon Roundabout and Shoreditch mean that London is carrying even more of the Government’s tax burden.”

“With Brexit negotiations now under way, the London tax base could be disproportionately affected by a deal that significantly restricts the free movement of people. Many start-ups and companies in financial services are disproportionately reliant on the free flow of ideas and people across borders.”

‘Beverly Hills of Britain’ is national tax hotspot for fourth consecutive year

Our research revealed that residents of Elmbridge, known as the ‘Beverly Hills’ of Britain and home to some of the country’s highest earners, still pay the highest amount of Income Tax in the country outside of London, over three times the national average.

Average Income Tax payments in Elmbridge, which includes the towns of Walton and Esher, were the highest in the UK for the fourth consecutive year. Average payments were £18,700 in the last year, up by 18% in just a year.

Elmbridge is a centre for high net worths in Britain and is home to several well-known celebrities and sports stars including tennis star Andy Murray, as well as models Danielle Lineker and Abbey Clancy.

Mark Giddens says: “The Government continues to rely on the high-earning commuters in the Surrey Stockbroker Belt for significant tax receipts.”

“Possible increases in tax rates were, of course, a hot topic in the election. These statistics are interesting – not just because they show particular areas can experience a sharp increase in incomes (and therefore tax bills) over a short period of time, but also because the average Income Tax figures again demonstrate an over-reliance on London and the South East when it comes to financing government expenditure.”

Taxpayers in Silicon Roundabout see their Income Tax bill increase by a fifth in just a year

‘Beverly Hills of Britain’ is national tax hotspot for fourth consecutive year

*Islington South and Finsbury

**This in part due to ‘fiscal drag’ – the fact that people have drifted into higher tax bands as thresholds have failed to increase in line with general increases in earnings (in fact over the five years to 2014/15 the 40% tax threshold actually came down rather than going up).