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Overall, Mr Sunak paid only £1million in UK tax over the course of the three years, giving him an effective tax rate of 22 percent, according to Tax Justice UK.This is being compared unfavourably to the tax rate levied on everyday Britons.
In light of these revelations, campaigners are calling for reform of the UK tax system to become more equitable.
Robert Palmer, Tax Justice UK’s executive director, said: “Our tax system is set up to allow the super-wealthy people to pay low levels of tax. This is the way the tax system is designed.
“We need to fix the tax system by ensuring that the super-wealthy, such as the Prime Minister, are properly taxed. This would bring in much-needed money for public services.”
Reacting to Mr Sunak’s tax documents, Angela Rayner, Labour’s deputy leader, said they “reveal a tax system in which the prime minister pays a far lower tax rate than working people who face the highest tax burden in 70 years”.
According to Mr Sunak’s published tax returns, he earned a total of £4.766millon across three consecutive tax years from 2019/20 to 2021/22.
Rishi Sunak paid £432,493 in tax during the 2021/22 tax, with the majority being paid on his capital gains earnings.
These earnings were more than £1.6million for that particular year with the Prime Minister paying £325,826 in capital gains tax and £120,604 in UK income tax on income of £329,561.
The rate charged people when it comes to capital gains tax is lower than that of income tax.
Tax Justice UK is lobbying for capital gains tax to be aligned with income tax as part of a wider reform measure
According to the group, this proposal and five other tax reforms would raise up to £50billion towards rebuilding the NHS and public services.
Capital gains tax is a levy on the profit when someone sells or disposes of an item that has increased in value.
It should be noted that it is the gain that is taxed and not the amount of money that someone receives.
As it stands, employees pay a tax rate of 32 percent which is split into 20 percent for income tax and 12 percent for National Insurance.
Following this, the next higher band tax rate is paid by people with earnings between £50,271 to £150,000 at 40 percent.
On top of this, the additional income tax is at 45 percent and is paid by those who earn above £150,000 but this is set to drop to £125,140 in April.
Following the publishing of his returns, Mr Sunak said he was “glad” this information was now out in the open.
The Prime Minster faced scrutiny over his tax returns after his finances became a topic of contention during his failed leadership contest against Liz Truss.
He said: “I published my tax returns in the interests of transparency, as I said I would, and I’m glad to have done that.
“I think ultimately what people are interested in is what I’m going to do for them.”
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