Monday was `Tax Freedom Day`

Monday was `Tax Freedom Day` - the day on which the average person in the UK has earned enough to pay all their taxes for the year.

That`s according to the Adam Smith Institute - the economic think tank which calculates Tax Freedom Day. It means that on average, just under five months` worth of people`s earnings went purely towards paying tax.

This year`s Tax Freedom Day came three days later than last year - largely as a result of January`s VAT increase - and six days later than the year before that. The last time it came later was in 2007 (June 1st).

The Adam Smith Institute also looked into what it describes as "the worrying extent of the UK`s debt". It found that the average UK taxpayer would now have to work for almost a year and a half (525 days) to pay off their share of the national debt.

Similar research into `Debt Freedom Day`, by financial advice website unbiased.co.uk, found earlier this year that the average person had to work for 45 days just to earn enough to pay the interest on their debts.

An expert at debt management company Gregory Pennington said: "Tax Freedom Day, along with the similar research into Debt Freedom Day, shows just how much of our income is effectively lost in taxes and interest.

"There`s not much we can do to reduce tax spending without changing the things we buy, but it`s possible to reduce the amount of interest paid on debts by repaying them more quickly, or by switching debts to a lower-interest alternative, such as a 0% interest credit card."