Flat tax 'would hit middle Britain'

Middle income earners would lose out from a flat tax system, a report has concluded.

As part of an in-depth analysis of a flat taxation system produced for ACCA, Richard Murphy, the tax researcher and campaigner, has suggested that a flat tax system in the UK employing a £10,000 personal allowance and a 20% tax rate would benefit the rich and the poor and hit middle earners, who would pay a higher effective rate than they do now with available allowances and tax rates.

Murphy told Accountancy Age people earning between £22,000 and £74,000, typically the 'Mondeo man' swing voters targeted by political parties at election times, would find themselves paying more.

The findings back up other research suggesting a similar outcome.

The report also disputes many of what are considered the prime attractions of a flat tax. 'There's absolutely no evidence to prove [points made in favour]. There's no evidence of increasing tax takes and no evidence of increasing growth.'

Read the report here.