![]() If the Government continues with the freeze as planned, then in the next three years, the number of taxpayers paying 45pc will grow to 760,000, the IFS predicts. In the March 2021 Budget, former chancellor Rishi Sunak announced that tax thresholds, including income tax bands, would be frozen until 2025-26. Tax freezes mean that 240,000 taxpayers have been dragged into the net since 2010, the IFS said. Over a third of these additional-rate taxpayers would not be paying the rate at all, had the threshold increased with inflation. Although they make up only 1pc of the population, this is more than double the number who paid the 45pc rate in 2010, according to the Institute for Fiscal Studies. There are 630,000 additional-rate taxpayers in the UK. Sean McCann of NFU Mutual said: “While many high earners may be better placed to deal with higher rates of tax, this fiscal drag will have cost some people significant sums in tax over the past dozen years.” Had the threshold risen in line with inflation, it would now stand at £206,570, financial advice firm NFU Mutual found. This year alone, the same taxpayer will pay almost £3,000 more than they would if not for the tax freeze. The threshold at which earners pay 45pc income tax has remained unchanged since 2010 while inflation and wages have risen.Īs a result, a worker on a salary of £150,000 in 2010 whose earnings have kept pace with inflation will have paid an extra £19,092 in tax over the last twelve years, according to wealth manager Quilter. Yet analysis reveals that reform of the top income tax rate is long overdue. Top earners have lost thousands of pounds while the additional-rate tax threshold has stayed frozen at £150,000 for more than a decade, new analysis shows.Ĭhancellor Kwasi Kwarteng announced plans to cut the 45p tax rate down to 40p in his mini-Budget, only to U-turn due to fierce opposition. The Government’s stealth tax move has pushed hundreds of thousands of taxpayers into paying the 45pc rate Top earners lose £19,000 to frozen tax thresholds ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |