Fact check: The proportion of adults paying income tax has risen since 2014

In the 2014-15 fiscal year around 30.7 million people paid income tax, and this reached 37.4 million a decade later.

Tuesday 29 October 2024 08:35 GMT

Many people in the UK do not pay income tax (Gareth Fuller/PA) (PA Wire)

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A widely shared online post claimed that 43% of working-age adults in the UK do not make enough money to pay income tax.

“In the UK, 43% of working-age adults do not earn enough to pay income tax (<£12,570),” the poster claimed.

Evaluation

The poster cited a report from the Institute for Fiscal Studies from 2019 which was using figures from the 2014-15 fiscal year. Those figures also related to the overall adult population, not just working-age adults, as the post claimed.

Since the 2014-15 fiscal year many more people, and a larger proportion of the adult population, have started paying income tax. In 2023-24 the proportion of adults and of working-age adults who did not pay income tax were both around 35%.

The post also cited today’s income tax threshold at £12,570, and not the one that was in place in 2014-15, which was £10,000.

The facts

What does the IFS say?

The poster cited a 2019 report from the Institute for Fiscal Studies (IFS) which said: “There were 54 million adults in the UK in 2014–15, and 31 million of those paid income tax.”

The report added that “around 43% of UK adults do not have an income high enough to pay income tax”.

How many income tax payers are there today?

The number of people paying income tax in the UK has increased significantly since the 2014-15 figures that the IFS cited. At that point there were 30.7 million income tax payers. That reached 37.4 million a decade later in the 2024-25 tax year, and had been 36.2 million in 2023-24. The population of adults has also increased, but at a much slower rate.

What has happened to the UK population?

Figures from the Office for National Statistics (ONS) show that the population of the UK in mid-2014 was estimated to be around 64.6 million. In mid-2023 – the latest available data – this figure was 68.3 million.

The ONS tends to measure people aged 16 to 64 (inclusive) in its working age statistics. In the UK there were 41.0 million 16 to 64-year-olds in mid-2014. In mid-2023 there were 42.9 million people aged 16-64.

Therefore it was not the working-age adult figure which has helped the IFS arrive at 43%. If it had it would have produced a figure of 25.19% for 2014. In 2023 that same figure would be much lower at 15.54%.

Instead the IFS was measuring all adults. The same ONS spreadsheets from above show that the population aged 16 and above was 52.4 million in mid-2014 and 55.8 million in mid-2023.

ONS figures show the adult population was around 54 million at the time of the IFS’s report in 2019.

What proportion of people do not pay income tax today?

While we already have taxpayer data for the 2024-25 fiscal year, the population data is more delayed. The most recent data from the ONS, as cited above, showed there were 55.8 million people aged 16 and above in mid-2023.

Comparing that with the 2023-24 taxpayer data, which showed 36.2 million income tax payers, it implies that 35.11% of adults did not pay income tax that year.

If stripping out those of pension age we are left with 27.9 million income tax payers out of a population of 42.9 million people who are aged 16-64. That means that among those aged 16-64 around 34.91% of the population did not pay income tax.

Why do some people not pay income tax?

People can earn up to a certain amount each year tax-free. At the moment, in the 2024-25 tax year, that is set at £12,570 per year.

Anyone who makes below that amount – they can be unemployed, students, pensioners on lower incomes or just not wanting to work – does not pay income tax.

Today’s £12,570 is the figure quoted in the social media post. However the figure has changed several times in the last decade.

In 2014-15 – the year that is being measured in the IFS statistics – the untaxed portion of income was £10,000 for those born after April 5 1948.