Welsh top earners get less than in rest of UK

AN ANALYSIS of tax data has confirmed that top earners in Wales earn significantly less than their counterparts in the rest of the UK.

Guto Ifan, of Cardiff University’s Wales Governance Centre, has written a blog in which he examines the profile of the 1.3m income tax payers in Wales.

He states: “Although the income of the median taxpayer in Wales of £20,300 is similar to that of the UK as a whole income differences between Wales and the UK begin to widen above this point. Earning over £42,600 a year would put you in the top 10% of income tax payers in Wales. Of these top 10% of income tax payers in Wales only one in four are women. In contrast the top 10% of all UK taxpayers earn over £50,600. The data therefore suggests the incomes of taxpayers in Wales are more equally distributed than the UK as a whole.”

Mr Ifan says those lucky enough to have a six-figure salary in Wales are probably in the Welsh 1%. In 201314, the top 1% of taxpayers in Wales earned over £100,100, while one would have needed to earn almost £159,000 to be in the top 1% of UK taxpayers.

Of those classed in the top 1% of UK taxpayers, only around 1.3% – just under 4,000 – live in Wales, compared with around 4.4% of all UK taxpayers generally. Of this small group of taxpayers in Wales only one in six are women.

Mr Ifan states: “Moving even further up the income distribution the top 0.1% of Welsh taxpayers earned over £231,700 – significantly below the almost £650,000 you needed to earn to be in the top 0.1% of all UK taxpayers. The top 10% of taxpayers across the UK earned 34% of total taxpayer income in 2013-14, a greater share than the 32% earned by the bottom 60% of taxpayers. Meanwhile, the top 10% of Welsh taxpayers earned 26% of total taxpayer income in Wales.

“The top 1% of income tax payers in the UK earned around 12.6% of total taxpayer income. In contrast the top 1% of taxpayers in Wales earned only 6.5% of total Welsh taxpayer income. In other words, Wales’ highest earners took a smaller slice of a smaller pie.”

Mr Ifan goes on to state that understanding the size, nature and distribution of the Welsh income tax base will become more important when a £2bn share of income taxes gets devolved to the Welsh Government from 2019-20. With its powers to set income tax rates for the first time the Welsh Government will be able to directly influence post-tax incomes. However a left wing Welsh Government determined to “tax the rich until the pips squeak” would raise far less proportionately than a similarly minded UK Government.