This happened to us last week when over 900 newspapers and websites picked up a comment our executive director Robert Palmer made about the prime minister’s tax return.
Last year Rishi Sunak brought in £2.2 million in earnings. But he only paid 23% tax on it. This is the same tax rate as the average teacher. This situation is grossly unfair.
The story was picked up by, to name just a few: Sky News , The Express , The Mirror , and The Guardian . As well as nearly 900 local newspapers. Robert was also on LBC with Matthew Wright.
Why was there so much interest? The story was a spark, igniting a growing suspicion held by many: that there’s no cost of living crisis for the super rich. And that the very wealthy are not being fairly taxed.
How is his tax rate so low?
How does our tax system allow a multimillionaire to pay such a low rate of tax? In this case it comes down to capital gains tax.
Most of Sunak’s earnings in this period (£1.8m) came from financial investments. When you sell shares you pay capital gains tax on any profits you’ve made. It’s likely that the Prime Minister paid just 20% tax on these gains.
This rate is a lot lower than if he had earned £1.8 million through working. In this situation, Sunak would pay more like 45% in income tax alone.
20% vs 45%. That’s a big difference. It’s the key to understanding one of the ways in which very rich people pay much lower rates of tax than they should. This is deeply unfair.
We’re campaigning to ensure that income from wealth is taxed at the same level as income from work. So if your income is £2.2 million a year from whatever source, you pay the same rate.
Our research shows that in doing this we could raise up to £15 billion a year extra.