INCOME taxes paid by Cestrians are rising 40% faster than incomes.
In the last four years, the average pay for a Chester taxpayer rose by 19.5% but income tax increased by a pocket-emptying 27.3%.
Taxpayers are seeing a greater proportion of their wages swallowed by income tax because of the Government’s failure to move up tax thresholds in line with wage rises, according to data obtained by Chester accountancy firm UHY Hacker Young.
The statistics provided by HM Revenue and Customs show that Chester taxpayers’ average incomes rose 19.5% over four years, but this was outpaced by income tax which rose 27.5%.
UHY Hacker Young also found that Chester residents pay £5,730 each year in income tax and earn an average of £28,800 per year.
John Ierston, Chester partner at UHY Hacker Young, said: “Income tax is rising faster for Chester’s taxpayers than their wages.
“They are worse off than they should be, because income tax thresholds have not kept pace with salaries, resulting in a greater proportion of taxpayer’s incomes being paid out as tax.
“The effect of this mis-match is that the highest tax band now applies to an increasing proportion of wage earners and this has acted as a stealth tax.
“So many middle wage earners in Chester, with relatively modest lifestyles, are now paying income tax at 40%.”
Mr Ierston adds: “In effect, Government revenue from income tax has increased disproportionately.
“The Government needs to raise the higher rate tax band in line with earnings instead of letting those on relatively modest incomes get hit by a tax intended to target the rich.”
According to the data, taxpayers in St Albans pay the highest average income tax of all the top 100 UK towns and cities and Hull pay the lowest – Chester came 13th, Despite earning more on average, taxpayers in Cambridge and Warwick pay hundreds of pounds less in income tax.
The data also shows that Chester residents pay £1,397 (31%) more per head than the UK average income tax contribution of £4,333. Residents earn £4,508 (18%) more than the national average income, which is £24,292.
London narrowly missed out on the top four and sits fifth in the league table with an average income of £34,700 and an average income tax burden of £7,740.