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22 Feb 2016

UK employment taxes rise despite falling in other EU countries

New figures have revealed that employment taxes in the UK have risen to more than 11% of an employee´s salary, despite similar taxes falling in other European countries, the Accountancy Age website reports.

According to accountancy group UHY Hacker Young, UK employment taxes have jumped from 11.2% to 11.5% in the last three years, which could have a negative impact on income growth and the creation of jobs in the future.

The body says that for an employee earning a salary of £47,680 UK businesses now pay an average of £5,460 in employment taxes each year, on top of the employee´s wages. In 2012 this figure was £5, 360.

However, in Europe as a whole the average employment tax paid by employers has dropped from £9,700 (19.8%) to £9,130 (19.2%). Meanwhile, the global average has fallen from £8,680 to £8,460, the equivalent of 17.7% of an employee´s wage packet.

On a slightly more positive note, the rise in employment taxes seen in the UK is nowhere near that of China, where taxes have increased by almost half since 2012 - rising from 12.6% to 18%. For an average employee earning £47, 680 here, employers pay an average of £8, 550 in taxes.

Commenting on the findings, UHY Hacker Young tax partner Roy Maugham said that the introduction of auto-enrolment in 2012 is severely impacting the UK´s competitiveness in the global market, putting “an additional burden on businesses.”

“Add that to other measures like the National Living Wage and employers are seeing cost burdens being heaped on across their workplace. Inevitably, that will hit new job creation,” he added.

Copyright M2 Bespoke 2016

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