Many people are feeling frustrated at finding out that tax in the UK has increased, but it turns out that the UK is not one of the biggest taxpayers in Europe. While income tax is not set to increase, National Insurance has increased by 1.25% for both employers and employees since April 2022.

Income tax is the tax you pay on your earnings and in the UK taxpayers get a Personal Allowance of tax-free income which is currently set at £12,570. Those earning £12,571 to £50,270 pay an income tax rate of 20%, and those earning £50,271 to £150,000 pay 40%.

Those earning more than £150,000 per year pay tax at the additional rate which is 45%.However, it has been reported that tax rates in Europe can be higher, and in some cases, much higher. Taxpayers in Ireland pay a marginal income tax rate as high as 48%, using a system similar to the UK.

In Slovakia and Austria, the tax rates are 50% and 55% respectively, but the Austrian 55% rate is only for those earning over €1 million (£860,000).

The Scandinavian countries of Denmark and Sweden have the highest tax rates. Denmark has a 55.4% top statutory personal income tax rate, while Sweden has a developed post-industrial society with an advanced welfare state and the highest income tax rate in the world, with as much as 57.1% deducted from annual income.

But some countries pay less tax than the UK. The Czech Republic has a top rate of personal income tax as low as 15%, as does Hungary. It is a flat tax rate, regardless of how much people earn.

Estonians only have to pay 20%, which is 25% less than UK taxpayers on the highest rate, but their personal allowance rate is much lower, at €6,097 (£5,200).

If you’re looking for tax planning accountants, get in touch today.