The UK’s low pay culture is costing tax payers £11 billion per year according to research released by community organising charity, Citizens UK, today.
With over 5.24 million people in the UK, 22% of all employees, earning less than the Living Wage, the Treasury is forced to step in and top-up incomes with in-work benefits, such as working tax credits, so that workers can afford a basic standard of living despite being in employment.
The research shows that in the case of some of the UK’s largest retailers, businesses are benefiting more from the Treasury in wage top-ups than they are paying in tax.
Tesco’s low pay culture is supplemented by the Treasury who had to top up their pay rates to the sum of £364 million in the last year, whilst pay for each low waged worker each year at the retail giant Next costs the taxpayer approximately £2,087.
Huge savings could be made to the public purse if companies paid a Living Wage to employees. If Tesco alone made the move tax payers could save £92 million a year.