The variety of folks accountable for the upper fee of earnings tax within the UK has surged by 50% because the begin of the last decade, in keeping with newest figures from HMRC
Chancellor Rachel Reeves has continued the freeze (Picture: Carl Court docket, Getty Photos)
Must Know: Hundreds of thousands extra Brits hit by larger tax charges as frozen thresholds create mounting burden
- Almost two million further UK residents have been dragged into higher-rate earnings tax since 2019, with frozen thresholds making a mounting burden for British taxpayers.
- HM Income and Customs figures reveal 5.76 million folks paid the 40% larger fee in 2023/24, marking a staggering 50% improve from 3.83 million in 2019/20. The upper-rate threshold has remained frozen at £50,271 since 2021/22, regardless of wages rising with inflation.
- Chancellor Rachel Reeves confirmed the freeze will proceed till 2030/31, that means extra Britons will expertise “fiscal drag” as their incomes push them into larger tax brackets. Greater-rate taxpayers now symbolize practically one in six of all UK taxpayers, up from one in eight 4 years in the past.
- The extra fee of 45% has seen an much more dramatic surge, with numbers leaping 57% from 570,000 to 893,000 taxpayers in only one yr. These high earners, representing simply 2.4% of all taxpayers, shoulder 37.7% of whole earnings tax collected.
- Sarah Coles from AJ Bell warned: “Frozen tax thresholds imply that is solely going to worsen for everybody. On this atmosphere, it is vital to make plans to make sure you do not pay greater than your fair proportion of tax.”
- The figures spotlight how larger and additional-rate taxpayers now contribute virtually 70% of all earnings tax income between them.
READ THE FULL STORY: New HMRC private tax allowance replace after Reeves choice ‘means it will worsen’
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