When there's something strange in your monthly payslip, who'ya gonna call? Tax Busters!
Most of us will have wondered how much we really pay once all our taxes have been added up but many won't have done the sums. Fortunately, the TaxPayers' Aliiance are here to help.
The Government spends approximately fifty percent of the British economy’s output.
To fund all that spending, it has to claw a lot of money out of our pockets. Despite the talk of the fifty percent tax rate applying to the rich, the reality is that even typical taxpayers, on average earnings, pay over fifty percent, once VAT and other taxes are counted.
Most of us have, at some stage, wondered how much we really pay in all those taxes, once they’ve all been added up. But most of us probably haven’t quite managed to summon the will power to sit down and do the sums.
Fortunately, the TaxPayers’ Alliance have released Tax Buster, a super little smartphone app that does all the calculations for us.
The idea is that it will tell you how much you need to earn before tax to buy the product you’re interested in. It lists how much went on each tax, adds them up and tells you the percentage that went in tax and what was left for the actual product.
For example, imagine ‘Irene’. She’s a shelf stacker at Tesco who wants to buy a DVD for £9.99 and who might earn £16,000 a year.
To get £9.99 of after tax income, she had to earn £17.45 because £2.94 was taken in Income Tax, £1.76 was taken in employee’s National Insurance and £2.03 was taken in employer’s National Insurance. And on top of all that, Corporation Tax means her wages are 74p lower.
But that’s not all. The DVD is as expensive as it is in part because of VAT at 20 per cent, or £1.66 of the cover price. That means only £8.33 of Irene’s hard-earned money went on the DVD she wanted. The rest, an incredible £9.13, went on all those taxes.
Tax Buster is very simple and easy-to-use. Enter a few basic income details into the app, select the appropriate product type, enter a few basic details about what you bought (like the price) and it calculates it all for you.
You can even share your results with friends and family on Twitter, Facebook or by email. Download it today and try it yourself.
You may not like what you see, but you might find discovering just how much tax you paid on your purchases pretty compulsive, especially if you try out especially highly taxed alcohol, tobacco and fuel!
Rory Meakin was until recently a research associate for the TaxPayers' Alliance. He is now a finance analyst. He tweets at @rorymeakin
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