For the first time, the income tax contributions from London and the South-East have surpassed £100 billion in a single year, as per the latest official figures.
Londoners alone paid £59.3 billion, while residents of the South-East contributed £41.4 billion, collectively accounting for just over half of England's total income tax bill of £198 billion. This increase is largely driven by the Chancellor’s policy of freezing the income tax thresholds, which, according to the House of Commons Library, will result in approximately one million residents from London and the South-East being pushed into a higher tax bracket by the 2027/28 tax year.
Notably, 20 of the top 25 constituencies with the highest income tax contributions are located in London. The highest bills were recorded in Kensington with £3.37 billion, followed by the Cities of London and Westminster at £3.15 billion, and Hampstead and Kilburn at £3.06 billion. This financial year marks the first instance of the Chancellor's freezes on income tax and National Insurance thresholds, suggesting that the amounts have likely risen since.
Moreover, London taxpayers face the highest average income tax bills in the country at £3,650 annually, surpassing the South-East's average of £3,010. The Treasury has seen a significant revenue increase from these regions, with a rise of £13.1 billion to £100.7 billion in 2021/22, which represents a nearly 15% increase from the previous year.
This pattern has been consistent over the past years, escalating financial pressures on residents in these areas.
