Tax Freedom Day—the day when the average UK resident finishes paying George Osborne and begins putting money in her own pocket—is finally upon us.
After 150 days of sending all our money to the Treasury, we can earn for ourselves over the rest of the year.
It is calculated by comparing general government tax revenue with Net National Income (NNI). The total of all government tax revenue – direct and indirect taxes, local taxes and National Insurance contributions – is calculated as a percentage of NNI at market prices.
This year it comes to 41.5%. That percentage is then converted to days of the year, starting from 1 January.
The first day of the year that Britons work for themselves rather than the taxman is Tax Freedom Day.
It has varied quite significantly over the past few decades. In the 1970s it tended to fall in late May, before rising to the latest date on record in 1981 (20th June). It fell throughout the 1980s to a low of 20th May in 1993 before rising again to a 24 year high of 3rd June in 2001.
Tax Freedom Day over the last ten years:
| Year | TFD date |
| 2004 | 26 May |
| 2005 | 27 May |
| 2006 | 1 June |
| 2007 | 29 May |
| 2008 | 27 May |
| 2009 | 24 May |
| 2010 | 28 May |
| 2011 | 29 May |
| 2012 | 28 May (29th ex. leap year) |
| 2013 | 30 May |
Every individual will have a different personal tax freedom day subject to their own financial planning strategies. In an era of higher taxation it is important to utilise every allowance, relief and exemption the government allows you to use.
If you would like to find out more please about our tax and financial planning services please contact edward.grant@in2matrix.com for more information.
The information is intended to provide information only and reflects our understanding of legislation at the time of writing. Before making any decision, we suggest you take professional financial advice.
