UK workers only have until today to cover all of the tax that they must pay in for this year (2009) according to Think Tank.

According to the Adam Smith Institute, this is a shorter wait than last year when ‘tax freedom day’, which was on 22nd May.

On average, a UK worker must work 134 days this year in order to earn any money going to the government through income tax, National Insurance, VAT and other taxes. Though if government borrowing is also included in the maths behind this, this period is extended to 176 days.

Gabriel Stein is the chief economist at Lombard Street Research – the company that has carried out all these calculations. He says: “Running up deficits can be described as a form of deferred taxation.

“ The effect will be that when the economy recovers – as it will eventually do – the UK tax burden is likely to rise much faster than would otherwise have been the case and tax freedom day is likely to creep later and later in the year.”

Recession Strikes Again!

The calculations that have been made also include outlays of things like fuel, alcohol, cigarette duties, car tax and council tax.

If the figures used exclude government borrowing, the day falls earlier than any time since 1973 – 36 years!

However, recent business failures and rising unemployment means that the government is not able to bring in as much tax revenue as usual, which has led to greater levels of borrowing.

According to researchers at the Institute, the gap between tax freedom day based on actual revenues (which is 14th May), and tax freedom day based on government spending (which will be on 25th June), is the widest it has been in nearly 40 years.

The 25th June is also the latest date for tax freedom based on government spending since 1984.

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