(happy) Tax Freedom Day 2021

As of June 2024, this is out of date. Please refer to Tax Freedom Day 2024 for the updated statistics.

TAX BURDEN HIGHER THAN AT ANY TIME SINCE 1995

Taxpayers worked 150 days for the Boris and the taxman this year, today is the first day they start working for themselves

• Tax Freedom Day falls on May 31st

• Brits work 150 days of the year solely to pay taxes, pandemic spending and no plans to reign in political projects means taxes likely to rise in future years

• Tax demands are at a record high, even prior to taking into account the full scale of the pandemic. MPs provide their comments on the need to reduce the burden on businesses, hard working families, and the need for the Conservative Party to return to conservative and free market principles

Tax Freedom Day is a measure of when Britons stop paying tax and start putting their earnings into their own pocket. This year the Adam Smith Institute has estimated that every penny the average person earned for working up to and including May 30th went to the taxman—from May 31st onwards they are finally earning for themselves. 

British taxpayers have worked a gruelling 150 days for the taxpayers this year. Brits will fork out £730 billion to the Treasury this year, over two-fifths of every pound we earn. More of us are working for Boris than worked for the taxman in any year under New Labour, the Coalition or Theresa May’s governments. Britain’s tax burden is moving in the wrong direction. 

Unfortunately for Britons, this Tax Freedom Day cannot yet fully take into account the tax costs of measures taken to tackle COVID19 — and the Government has been borrowing hundreds of billions more to finance the covid response. All borrowing is a form of taxation deferred and the hundreds of billions of pounds borrowed to tackle this viral threat will only begin to be borne in future years and as the government begins to unlock economic activity. 

Tax Freedom Day is over a month and a half later in the UK than it is in Biden’s America, where workers started taking home their own pay from April 16th this year.

With talks of global minimum taxes on the businesses that allowed millions of us in the UK to work from home and still get fed, entertained and connected, the minimum governments could do is look again at the costs they impose on all of us. As the pandemic comes to an end we need a new approach that lets taxpayers keep more of their money, which grows our economy, creates jobs and boosts wages.

It’s easy to spend other people’s money. What we need now is a plan to reduce the burdens on working people, that lets them keep a little more of their hard-earned money.

Dr Eamonn Butler, Founder and Director of the Adam Smith Institute, said:

“Borrowing off the backs of others is easy, making sure the books are balanced is the hard part. We can all forgive the government reaching for easy credit in a crisis but the fact of the matter is that the cost of government has been on a rising path for years now. As politicians prepare to say that businesses and families need to prepare for global minimum taxes, the least they could do is to look again at the burdens they’re putting onto all of us to pay for their largesse.”

Tom Clougherty, head of tax at the Centre for Policy Studies, said:

"The latest Tax Freedom Day in decades should serve as a stark reminder that this isn't the time for tax increases. Instead, the Government needs to come up with a plan to overhaul the tax system – so that it can raise money as efficiently as possible, while also reducing the burden on people's earnings and investments. Without radical reform, we risk ending up in a vicious circle of tax hikes and weak economic growth."

Mark Littlewood, Director General of the Institute of Economic Affairs, said:

"That Tax Freedom Day falls so late in the year is a sign this government is failing to deliver on what is left of its free market rhetoric. We in fact live under a high-tax, high-spend government that is on track to create an overall level of taxation to rival Clement Atlee's socialist administration. We are approaching, if not at, our taxable limit and repairing the public finances post-COVID will require expenditure cuts, not further tax hikes."

Duncan Simpson, research director of the TaxPayers' Alliance, said: 

"Tax Freedom Day couldn't come a moment too soon. Sadly it gets later and later every year, as struggling families are battered by endless hikes and taxes reaching the highest sustained level they've been for 70 years. Hard hit households need tax cuts now more than ever, to ease the burden and help them recover from the covid crisis.”

Rt Hon Sir Iain Duncan Smith, Member of Parliament for Chingford and Woodford Green, said:

“I congratulate the Adam Smith Institute for their brilliant work in bringing together calculations of the whole tax burden so that we understand better just how much tax we pay to Government. We can see from their analysis that the tax burden has risen over the years. Since I first came into Parliament, we are now working for the Government for a whole extra month before we are working for ourselves. This indicates the scale of Tax rises through both Labour and Conservative Governments. The chart the Adam Smith Institute have produced makes it very clear and easy to understand that the tax burden has risen steadily over the years and for that I congratulate the Adam Smith Institute. I hope that the Government will look carefully at this and understand that no matter the debates at general elections -  the truth is that tax has risen.”

James Gray, Member of Parliament for North Wiltshire, said:

“Like my fellow Glaswegian, Adam Smith, I am a strong supporter of less government, greater individual freedom, lower 'safety nets' provided by society and as a result of that a lower need for National or local taxation.  Freedom Day should, in my view, be as close to Ne'erday as it is possible to be.”

Tim Loughton, Member of Parliament for East Worthing & Shoreham, said:

“Tax Freedom day is a stark reminder just how heavily individuals are taxed and it is always alarming when this date gets progressively later in the year. Good Conservative governments acknowledge that people are incentivised by lower and fairer tax rates and this usually results in a higher tax take to the Exchequer overall in any case, so notwithstanding the current strains on our finances caused by the pandemic I hope we return to good Conservative government principles as soon as possible.”

Alex Stafford, Member of Parliament for Rother Valley, said:

"As the days get shorter and shorter, so Tax Freedom Day gets further and further away from the start of the year. True freedom is allowing us to keep more of our own money in our pockets - so that we, rather than the Government, can choose where it goes. With the economic impact of Covid being felt, now more than ever, do we need true control over our own finances." 

David Simmonds, Member of Parliament for Ruislip, Northwood and Pinner, said:

"Everyone in politics needs to be thinking about how hard someone has had to work to earn the money that government is spending, and ask, if they were in my position, would they agree that this spend represents value for money?" 

Greg Smith, Member of Parliament for Buckingham, said:

“High taxes are a barrier to growth, a disincentive to invest and calamitous for family finances.  With tax freedom day coming later and later, it is imperative to cut taxes and go for growth.” 

Stephen McPartland, Member of Parliament for Stevenage, said:

“The only way to level up the country is to let people keep more money in their own pockets to spend in their local communities. The farcical behaviour of local and national government on fantasy projects and schemes, which sound good in a press release but in reality act as barriers to employment and investment locally, must stop.”

Sir Desmond Swayne, Member of Parliament for New Forest West:

“Individuals make better decisions about what is best for them and their families. The more we are allowed to do so, the better we will be for it. The more we have to work just to pay for government and it's priorities, so proceeding, our initiative and enterprise is diminished.”

Andrew Lewer, Member of Parliament for Northampton South, said: 

"The trend for Tax Freedom Day to get ever later in the year was well established before the trauma of Covid-19 hit us. We have had a Conservative-led Government since 2010 and so we are well overdue for this trend to be reversed. I hope that those in leading positions in Government will be mindful that increased tax RATES often do not mean increased tax TAKES." 

Christopher Chope, Member of Parliament for Christchurch, said:

“The ASI analysis is a timely wake up call to Conservatives  of the need to  take back control from the State .Taxation is the enemy of personal liberty because it transfers choice and responsibility for spending  decisions from families and individuals to wasteful bureaucrats.”

Steve Baker, Member of Parliament for Wycombe, said:

“It doesn’t just feel like it, tax freedom day does arrive later every year under Conservative Governments. This cannot go on. In order for us all to be prosperous, eventually Conservatives must stand up for the formula we have always believed in - that means lower taxes.”

Bob Blackman, Member of Parliament for Harrow East, said:

“Over the past year, significant revisions to the net national income stats have pushed Tax Freedom Day back by around a week In 2020, we worked 150 days just to pay our tax bill.

“From May 30th onwards, we’re working for ourselves. Tax Freedom Day is now later than at any time since 1995. High taxes discourage work, investment, and economic growth. We must encourage everyone to take TaxAction by making the most of their tax reliefs. Assuming that people stick to those things approved by HMRC then there are several legitimate schemes an individual can take advantage of to reduce their tax bill.”

John Baron, Member of Parliament for Basildon and Billericay, said:

“Although taxes support our vital public services, it’s nevertheless good news that we are all now ‘working for ourselves'. The Government should work hard to keep taxes low – and must remember the lessons of the Laffer Curve.

Robert Goodwill, Member of Parliament for Scarborough and Whitby, said:

"Tax Freedom Day is a brilliant way of bringing home to ordinary people just how burdened we are with tax.  The pandemic has resulted in unprecedented peace time levels of public expenditure, but we do need to bring this under control and ensure that in future Tax Freedom Day can be earlier in the year and not later!" 

Geoffrey Clifton Brown, Member of Parliament for the Cotswolds, said: 

“As Deputy Chair of the Public Accounts Committee, I am extremely conscious that every pound spent by Government eventually must be raised in taxation. It is probably inevitable that some taxes will have to rise to pay for the enormous expenditure throughout the pandemic. But the long-term aim of Government should always be to keep taxation as low as possible, conducive to providing a reasonable level of public services. The individual or the family always know how to spend their own money more wisely than the Government.”

Henry Smith, Member of Parliament for Crawley, said:

"The fact that almost half a year elapses before we are in essence free of paying tax, is a sober reminder of the state's financial  burdens on us. A lower tax economy produces growth, which in turn creates a greater common wealth - we do well to remember this, especially given the serious demands on us as individuals and as a nation at this time." 

Alun Cairns, Member of Parliament for Vale of Glamorgan, said:

“It’s hard to believe that we work 150 days just to pay our taxes.  This brings into focus the principle of effort and reward for the benefit of all in society.  I pay tribute to the Adam Smith Institute for maintaining focus on this important acid test of fiscal discipline.  We all recognise public spending commitments but Tax Freedom Day underlines that we all pay, in the end.” 

Notes to editors:

For further comments or to arrange an interview, contact Matt Kilcoyne, matt@adamsmith.org | 07904099599

The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Government to repeal the Porn Laws

The Government's Online Safety Bill (Clause 131) will quietly abolish the much-dreaded Porn Laws.

The Adam Smith Institute’s Head of Research Matthew Lesh responded to the news:

"The repeal of the Porn Laws is excellent news for our privacy and online freedoms. This will mean Brits won't have to buy a state-sponsored porn pass or provide their credit card, passport or driver’s licence every time they visit a porn site.

"But we shouldn't celebrate too quickly. This is a pyrrhic victory. The Online Safety Bill will mandate age verification to access the adult versions of Twitter, Facebook and YouTube. Until you present a drivers' licence or passport, the sites will be forced to only display child-appropriate content. 

“Just like repeatedly approving cookies, constantly verifying your age will add huge inconvenience to surfing the internet. It would also mean forcing Big Tech to gather even more private data about individuals, risking our privacy and online security.”

Learn more about the Adam Smith Institute’s efforts to Repeal the Porn Laws.

For further comment or to arrange an interview, please contact Matt Kilcoyne via 07904099599 or email matt@adamsmith.org

Online Safety Bill: Frightening and historic attack on freedom of expression

In response to the Government’s publication of the Online Safety Bill, the Adam Smith Institute’s Head of Research Matthew Lesh said:

“The Online Safety Bill is an incoherent train wreck. The inclusion of ‘lawful but still harmful’ speech represents a frightening and historic attack on freedom of expression. The Government should not have the power to instruct private firms to remove legal speech in a free society.

“The scope of these proposals is practically limitless, encompassing everything from ‘trolling’ to ‘fraud’ and ‘misinformation’. It will threaten privacy by age-restricting the entire internet: requiring websites to gather drivers’ licenses and passports to ensure services are age-appropriate. The vagueness of the legislation means there will be nothing to stop Ofcom and a future government including any additional measures in future.

"The costs to businesses will be huge, with the Government's impact assessment indicating that the proposals will cost £2.1 billion, with an extraordinary £1.7 billion expected to be spent on content moderation. These costs will be crippling for start-ups and scale-ups, cementing the power of Big Tech.

“The bill needs a serious rethink. There needs to be a mandate on Ofcom that prevents the issuing of guidance that infringes on legal speech, open to arbitrary interpretation under the current proposals. There also needs to be a much greater focus on the perpetrators of unlawful behaviour. The proposals will not see a single extra penny dedicated to law enforcement or prosecuting serious online crimes.

For further comment or to arrange an interview, please contact Matt Kilcoyne via 07904099599 or email matt@adamsmith.org

"Nutty nanny statism": Government plans to ban 'junk food' advertising online and after 9.00pm

In response to the Government maintaining plans to ban so-called ‘junk food’ from online advertising and before 9.00pm on television, the Adam Smith Institute’s Head of Research Matthew Lesh said:

“The ad ban plan is nutty nanny statism. It will do nothing to reduce obesity while savagely striking at struggling hospitality businesses and hurting the public.

“The measures will apply to a shockingly large array of foods. It will be illegal to advertise online British favourites like fish and chips, scotch eggs or even a Full English breakfast; takeaways would be unable to post images of their food online; descriptive words like ‘delicious’ will be banned. Thousands of restaurants, which have been kept alive thanks to online delivery, will no longer be able to advertise online to find new customers, hitting small businesses the hardest. 

“The ban will even make it harder for the public to discover new restaurants and food delivery services, taking joy out of our lives.

“It’s all pain for no gain. By the Government’s own calculations banning online advertising will reduce children’s calorie consumption by just 2.8 calories per day—having no impact on obesity.”

Click here to learn more about the ASI’s research on the Mad Ad Ban Plan.

For further comment or to arrange an interview, please contact Matt Kilcoyne via 07904099599 or email matt@adamsmith.org

UK Gov will miss Brexit chance to make 2030 smoke free

• Despite decades of public policy aimed at reducing smoking, there remain 7 million smokers in the UK (14.1% of adults, down from 14.7% in 2018)

• According to ONS data the average annual decline in the smoking rate from 2011 to 2019 was 0.76 percentage points.

• The UK’s public health consensus in favour of e-cigarettes as a smoking alternative has played a significant role in accelerating the decline in smoking rates over the past decade

• But for the first time since e-cigarettes were introduced to Great Britain their use has declined from 7.1% to 6.3% of the adult population.

• The Cochrane review found that for every 100 people using nicotine e-cigarettes to stop smoking, 10 might successfully stop compared to just 6/100 using nicotine replacement therapy or 4/100 with no support or behavioural support only.

• Even with the current rate of decline, the Government’s ‘2030 smoke-free’ goal will be missed.

• Brexit and the new Tobacco Control Plan “provide once-in-a-generation opportunity to create and implement evidence-based policy” says Rt Hon David Jones MP

• Any missed Brexit opportunities to reduce restrictions on sale and advertising of alternative products risk lives lost to smoking related illnesses.

In the UK, around 78,000 people die every year as a consequence of smoking with and many more live with the misery of debilitating smoking-related diseases. While the number of smokers has fallen in recent years the Government is not on track to meet its target of being ‘smoke-free by 2030’, which means having an adult smoking prevalence of 5% or less.

Even under optimistic assumptions, the Government will miss its target by a whole percentage point on current trends. This is the warning today by the free market think tank the Adam Smith Institute in a new report. Previous forecasts have predicted an even higher degree of failure, with Cancer Research UK suggesting that England would hit the target 7 years behind schedule while Scotland was only predicted to reach the target in the latter half of the century.

The neoliberal think tank argues that decades of policies designed to reduce smoking prevalence are at risk have only started to bear fruit after a squeeze on incomes against inelastic consumption of nicotine via higher taxes was also met with options to switch away from cigarettes to less harmful alternatives such as e-cigarettes.

It is the poorest that will suffer, they argue and are joined in that opinion by the Rt. Hon. David Jones MP who argues that “poorer communities across the country are being left behind, and the problem, currently, is only getting worse.”

The free market think tank says that the government has so far failed to make the best use of Brexit to reduce the barriers to products like e-cigarettes that are proven to reduce the harms of smoking.

Over the past decade the success of our harm reduction approach has seen an average annual decline in the smoking rate from 2011 to 2019 of 0.76 percentage points.

More worryingly the recent spate of people quitting cigarettes during the pandemic is likely to be short-lived and a result of young people having reduced time to spend with friends and at events, falling disposable incomes and job insecurity, and COVID-related health worries — all of which are both intended to be reversed by the government and society at the end of the pandemic. The free market think tank says that even in the best case scenario where these COVID-induced quits are long-term — a questionable assumption since young people tend to relapse at higher rates — they represent a one-off event rather than shift in the overall trend. 

E-cigarettes’ reputation as an effective way to stop smoking is borne out by the evidence. In October 2020, a Cochrane medical science research review of 50 completed studies summarised that “for every 100 people using nicotine e-cigarettes to stop smoking, 10 might successfully stop, compared with only six of 100 people using nicotine-replacement therapy or nicotine-free e-cigarettes, or four of 100 people having no support or behavioural support only.” A wide consensus of UK public health bodies and NGOs also maintain that they are significantly less harmful to health than tobacco cigarettes.

The Adam Smith Institute argues that the recent plateauing of e-cigarette use by smokers since 2016 — hovering at just under two-thirds of all adult smokers and despite the fact that almost all (94%) of smokers having heard of of e-cigarettes — means nearly one-third of UK smokers have still never used the UK’s most popular (and arguably most effective) quit method. 

When Britain left the European Union powers and advertising rules over nicotine products like cigarettes, cigars, vaping, and heated tobacco returned to the Westminster level from Brussels. With that came a chance to reform things like warnings to be product rather than sector specific, advertising alternative products within cigarette packets, and nicotine levels in certain products that are both safe and more likely to act as a direct replacement for long-term smokers. With no movement shown in the 13 months since, and despite a cardio-vascular disease pandemic, the think tank warns that the opportunities of Brexit are being squandered. 

However, the Government can signal their intent to continue the liberal approach to regulation, product development and access at the Framework Convention on Tobacco Control’s COP9 later this year — the UK’s first time unbound by the EU’s common position. 

If the Government is to achieve its target of a sub 5% smoking rate by 2030, it will best do so by continuing and expanding a liberal and consumer-welfare focused approach to access of alternatives to smoking, as well as seizing the opportunities that Brexit presents. 

Report author and ASI Head of Programmes Daniel Pryor, says:

“For a decade, the UK has been a world leader in using tobacco harm reduction to encourage smoking cessation. But until now, EU restrictions limited how far we could pursue this path. If the Government doesn't take advantage of Brexit to change its approach to vaping and other low-risk smoking alternatives, they'll miss the Smokefree 2030 target and squander a golden opportunity to help British smokers make the switch.

“We need to make these changes now. Many smokers aren’t switching to safer alternatives like vaping because of widespread misperceptions about relative risk or because they are simply unaware that other options exist. Others are put off by outdated product rules and even outright bans on things like snus that our newfound Brexit freedom gives us the opportunity to revise. 

“Global Britain should also leverage its newly independent position to push for the World Health Organisation to adopt a more sensible approach to reduced-risk products at COP9 later this year: especially in light of our decision to increase their UK taxpayer funding. If we don’t make these changes now, what was the point of Brexit?”

Notes to editors:  

For further comments or to arrange an interview, contact Matt Kilcoyne: matt@adamsmith.org | 07904 099599.

The report ‘The Golden Opportunity: How Global Britain can lead on tobacco harm reduction and save millions of lives’ is available here.

Daniel Pryor is Head of Programmes at the Adam Smith Institute. The Adam Smith Institute is a free market, neoliberal think tank based in London. It advocates classically liberal public policies to create a richer, freer world.