New tax data shows growing income inequality

New official figures on taxable incomes show how those at the top of the income distribution in the United Kingdom have taken a steadily greater share over the last 20 years. They also highlight the continuing disparity in taxable income between men and women.

The HM Revenue and Customs report is based on survey information relating to individuals who could be liable to UK income tax. The latest figures are for 2009/10.

Key points

  • From 1992/3 to 2009/10, median annual income increased by 70 per cent, from £11,500 to £19,600. For those at the top end of the distribution (the 99th percentile), incomes increased by 137 per cent, from £62,800 to £149,000.
  • There was no significant increase over the final two years of the period (from 2007/8) in income at the 99th percentile – possibly reflecting the hit to City of London bonus payments as the global financial collapse unfolded.
  • Of the 30.6 million taxpayers in 2009/10, 87 per cent were liable to income tax at the basic rate, while 10 per cent were liable at the higher rate (then 40 per cent). Ten per cent of taxpayers had an annual income before tax of less than £9,510, while ten per cent had an income of more than £46,600.
  • For those at the very bottom of the distribution scale (the 1st percentile), income increased by 87 per cent over the period since 1992/3, from £3,630 to £6,800 – somewhat more than median income.
  • 55.9 per cent of taxpayers were male, and males had a higher median income in every age range – £22,300 overall compared with £16,800 for females.

The full statistical report (Personal Incomes Statistics 200910: Tables 3.13.11, HM Revenue and Customs) is available on the HM Revenue and Customs website.