How Fair is the UK Tax System?
Examining whether the tax burden is shared fairly in the UK, from the Sunday Times Tax List to the wealth vs income debate.
Pocket Tax Team · 4 February 2026 · 7 min read
Whilst the cost of living continues to plight families and public services face increasing pressure, many ask: is the tax burden shared fairly? The recently revealed 2026 Sunday Times Tax List provides an interesting window into the contributions of the nation's wealthiest individuals.
The Heavy Hitters: Insights from the 2026 Tax List
According to the Sunday Times, the top 100 individuals and families on this year's list contributed a staggering £5.758 billion to public finances—a 15.5% increase from the previous year.
Key highlights from the list include:
- The Done Brothers: Fred and Peter Done, the founders of Betfred, topped the list for the first time, contributing more than £400 million. Their tax bill alone is equivalent to funding 33,416 annual state pensions.
- High-Profile Contributors: Familiar names like JK Rowling (contributing over £130,000 a day), Harry Styles (£24.7m), and Anthony Joshua (£11m) continue to be among the nation's biggest taxpayers.
- Industry Impact: More than 10% of all identified tax on the list came from the gambling industry.
Tax Contributions by Top Earners
A critical part of the fairness debate involves understanding who pays the majority of income tax receipts. According to HMRC 2022/2023, income tax payments are concentrated among those individual taxpayers with the largest incomes. The 10% of income taxpayers with the largest incomes contribute over 60% of income tax receipts.
This suggests the tax system is unfair, and we are regularly seeing discussions around the wealthiest leaving the UK for lower tax jurisdictions. However it should be pointed out that the poorest households contribute a higher proportion of their income to tax. Data from the ONS reveals the following:
- The poorest 10% of households paid on average 48% of their income in tax in 2022/23
- The richest 10% of households, however, paid on average 39% of their income in tax
- Council tax is a key source of disproportionate taxation, with the poorest 10% paying 7% while the richest 10% pay just 1.2%
- Similarly, VAT hits the poorest harder, with the poorest 10% paying 12% while the richest 10% pay just 3%
- The post-tax income for the richest 10% is £112,874, over 12 times higher than the poorest 10%'s post-tax income of £9,651.
The UK's tax system is designed to operate progressively, asking "those with the broadest shoulders" as coined by Rachel Reeves, to contribute more in order to tax the middle and poorest in society less - a principle widely accepted by the public; however, the question remains - what should that contribution be?
The UK's Tax Comparison in Global Context
To determine if the UK tax system is "fair," we may want to look beyond our borders and compare it to other countries. The table below compares the effective tax rates for high earners in the UK, to other countries:
| Country | Gross Salary (Equiv.) | Total Tax & Social Charges | Effective Tax Rate |
|---|---|---|---|
| United Kingdom | £250,000 | £99k Tax + £7k Social Security | 43% |
| France | €292,000 | €107k Tax + €64k Social Security | 58.6% |
| Germany | €292,000 | €110k Tax + €6k Social/Surcharge + €18k Social Security | 46.0% |
| Spain (Madrid) | €292,000 | €120k Tax + €3k Social Security | 42.5% |
| United States (California) | $200,000 | $64k | 32.2% |
As shown above, the UK is broadly in the middle, with the US standing out as having the lowest effective tax rate for high earners, whilst France has the highest.
What about wealth?
While the Sunday Times Tax List presents those contributing billions in income tax, it highlights a glaring omission: many of the nation's wealthiest are often missing from the List. This discrepancy is at the heart of the "wealth vs. income" debate championed by figures like Gary Stevenson (of Gary's Economics) and the Patriotic Millionaires UK.
The core of the argument is that the UK tax system is geared toward taxing "work" (income) rather than "wealth" (assets) and whilst the super rich pays high amounts of tax, it is disproportionately low compared to their net-worth. In 2024, billionaire James Dyson, 5th on the Sunday Times Rich List, paid just 0.68% of his total wealth in tax.
The immediate argument against higher taxes on the wealthy is the risk they will move their residency to lower-tax jurisdictions, thus increasing the tax burden on the rest. Moreover, staunch critics of increasing taxes on the super-rich, such as Konstantin Kisin, argue that it discourages investment and entrepreneurship, the last thing a country needs in a stagnating economy.
Conclusion
Determining the fairness of the UK tax system depends entirely on which lens is used. From a revenue perspective, the system is highly progressive; with the top 10% of earners contributing over 60% of income tax, the "broadest shoulders" when it comes to income are undeniably carrying the weight of public services.
However, from a proportional perspective, it may be argued the system appears regressive. The poorest households sacrifice 48% of their income to tax—compared to 39% for the wealthiest - (both numbers of which are outrageously high but that's a discussion for another day). Dig a little deeper, and you see enormous disparities when it comes to taxes as proportion of wealth - a cornerstone of the "wealth vs. income" tax debate.
The UK currently occupies a global middle ground, balancing the need for public funding against the risk of "tax flight" and discouraging entrepreneurship and investment. Ultimately, while the system succeeds in extracting massive contributions from the highest earners, it struggles to protect the lowest earners from a disproportionate relative tax burden - forcing many of the lowest earners into relative poverty.