Forget Spring Bank Holiday – Monday 30 May is tax freedom day – 4475

26th May 2011

But more importantly, while we now get many days off each year, May 30 is the only day of 2011 when we can break open the Champagne, Chardonnay and Claret and toast that greatest annual occasion of all – Tax Freedom Day.

It's the day, according to free market think tank the Adam Smith Institute, when we stop working to pay taxes that feed the government and start earning for ourselves.

Every penny the average person makes during the 149 working days before May 30 is taken by the taxman.

Taxes include income tax, national insurance, VAT, corporation tax, excise duties (on tobacco, alcohol and road fuels) plus, council tax, and these are quite small, capital gains tax and inheritance tax.

But every penny we earn from May 30 onwards can be spent on anything we want including the above mentioned beverages, holidays, electronic gadgets, buying our homes, putting money away into savings and investments – in fact, total spending freedom.

Cue celebration. After nearly five months of government shackles, we are free. And, as anyone and everyone in financial services knows, the phrase "tax free" is solid gold.

We all go mad for "tax-free" Isas at the end of each March even if the tax saving is minimal.

Some tax free products are actually bad value and, (surprise, surprise!) Conservative peer Baroness Stowell recently claimed that banks were failing to pass on the tax saving to account holders and keeping it for themselves.

If her charge is right, then it's no more than insurance companies used to do when there was tax relief on life policy premiums. This does not make it right.

Tax freedom is like the high-speed train or a new building. It's fine as long as it is "not in my back yard". With tax nimbyism , we all ideally want to pay nothing but we all complain like crazy if our favourite library or railway branch line is slashed to save taxpayer money.

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