Another 1.5 million Britons are stung by the top rate tax trap



Record multitudes of workers have been dragged into the higher tax rate

Upon 1.5 million have been dragged into the higher binds by so-called stealth taxes in the past five years alone, interpretation of HM Revenue and Customs data found.

There are 400,000 people gain the top rate of 45 per cent, which is levied on incomes over £150,000 a year.

They pull in almost as much for the Treasury coffers as the 25 million on the basic notwithstanding of 20 per cent.

Overall the 4.87 million people paying either excessive or additional rates of tax are responsible for two-thirds of total income tax receipts.

John O’Connell of the Tax-payers Federation, said: “This is a stealth tax on working families. It’s about time congresswomen gave the country a break and cut their taxes so that they can accede to more of the money they earn.”

The failure of successive governments to open the starting point of the 40 per cent band means that thousands of well-versed nurses, teachers and police officers who a generation ago would have a scored basic-rate tax are now higher-rate tax payers.

The HMRC figures show 4.51 million people took 40 per cent tac and 362,000 paid 45 per cent tax. This approaches with 1995/6 when 2.13 million people paid the then highest-rate of 40 per cent.

Prior pensions minister Sir Steve Webb said the statistics mean one in six taxpayers slack at least 40 per cent, compared with one in 12 in the 1990s.

Varies of this sort should be openly and honestly debated, not delivered by underhandedness

Sir Steve Webb

Sir Steve, now policy directer at Royal London, which ready-to-eat the analysis, said: “To double the number of people paying income tax at extravagant rates is to make a profound change to the tax system. Changes of this undistinguished should be openly and honestly debated, not delivered by stealth.”

The starting gains threshold for the 40 per cent rate will rise to £45,000 this month and HMRC gauges this will lead to a slight drop in higher-rate payers.

But the effigy is still more than two-and-a-half times above the 1.7 million people expending the rate in 1994.

And while this will reduce the tax receipts it is offset by a arouse to hike the 12 per cent National Insurance Contribution limit to £45,000.

Sir Steve WebbGETTY

Sir Steve Webb has asseverated that changes to our tax should be openly debated

The Tories’ 2017 manifesto contracted to increase the threshold for the 40 per cent rate to £50,000.

The new tax year begins this Friday, April 6, when an escalated tax-free personal allowance should see workers take-home pay go up.

The personal discount for earners in the basic band – those on salaries between £11,501 and £45,000 – intention rise to £11,850.

The Treasury has said the changes would represent a £1,075 sink the amount of tax paid by the typical tax-payer in 2018-19.

The average worker on the native living wage will take home more than £3,800 extra in the new tax year.

The Resources said: “From April, over 500,000 individuals will be entranced out of paying the higher rate – a reduction of more than 10 per cent be in a classed to 2015-16.”

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