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According to the Organisation for Economic Co-operation and Development (OECD), UK tax revenue as a percentage of GDP rose to 33.3 per cent in 2017.
This was up from 32.7 per cent in the previous year and was more than double the average rate of increase for nations covered by the OECD’s research.
Of the 36 nations included in its study, 34 provided data, with the UK ranking top among the 19 countries that saw a rise in the tax-to-GDP ratio.
According to the OECD, tax revenues in these advanced nations increased due to taxes on companies and personal consumption increasing total tax revenues as a proportion of GDP. In fact, VAT revenues are the largest source of consumption taxes recorded across the OECD.
France recorded the highest tax-to-GDP ratio during this period at 46.2 per cent, with Denmark coming in second at 46 per cent, and Belgium third at 44.6 per cent.
Tax-to-GDP is now higher than pre-crisis levels in 21 countries. However, eight nations – Canada, Estonia, Hungary, Ireland, Lithuania, Norway, Slovenia and Sweden – have not seen a rise since 2009.
While the UK doesn’t have the highest ratio, it does have the fastest growing tax revenue and therefore businesses and individuals need to plan carefully in future to reduce their liabilities.