Residents of Birmingham have one of the lowest average income tax bills in the UK, paying an average of £3,520 per year.

The average annual income tax contribution of workers in Birmingham is 20 per cent lower than the UK average of £4,398, according to city accountancy firm UHY Hacker Young.

Malcolm Winston, partner at UHY Hacker Young, said: “Birmingham’s personal wealth and tax bills are much lower than those in places like London and the South East, a legacy of the huge changes the local economy has undergone thanks to the decline of traditional industries. 

“It has a lot of catching up to do, but there is a lot of potential in the city. Birmingham’s manufacturing industries remain an important source of exports and foreign investment for the UK, while hosting one of the Government’s new Enterprise Zones will also help attract private investment and jobs to the city, boosting wealth. 

“The Government has announced some major infrastructure projects to benefit the Midlands like High Speed 2, but these will take a long time to bring tangible benefits. More action is needed now.” “Plans to cut its long-term costs could be achieved by decentralising more of its functions to regional hubs like Birmingham.” 

The research showed that the UK is reliant on a handful of wealthy towns for income tax revenue.

Mr Winston added: “Birmingham is heading in the right direction, but it has a long way to go before it is in the same bracket as London and its leafy suburbs.”However, UHY Hacker Young’s report revealed that when total tax payments by area are considered, Birmingham contributes the sixth highest bill in the UK, with residents paying a total of £1,430million in the last financial year. This is behind London (£33,700million), Manchester (£4,410million), Liverpool (£2,190million), Leeds (£1,490million), and Edinburgh (£1,450million).Solihull is 26th with a £556million bill, followed by Dudley in 35th with £461million and Stratford-upon-Avon and Warwick with £440million in 40th place.