The number of people paying the additional rate of income tax has risen to its highest ever level, according to new data released by HMRC.
The tax authority predicts that around 364,000 people will be subject to the highest rate of income tax in 2017/18, up from a figure of 311,000 in 2013/14. This accounts for 1.2% of all UK income tax payers.
The additional rate is currently set at 45% and is payable on income over £150,000. HMRC estimates that 25.1 million people will pay the basic rate of tax (currently 20%) in 2017/18, accounting for 85.1% of taxpayers. A further 4.2 million individuals are expected to pay the higher rate of 40%, representing 13.7% of taxpayers.
The personal allowance (the amount you can earn before paying income tax) has increased considerably over recent years, rising from £6,475 in 2010 to £11,500 in 2017/18.
However, the figure at which individuals must pay the additional rate has remained at £150,000, which experts say may explain the increase in the number of 45p taxpayers.
HMRC’s latest income tax statistics reveal that some 15,000 UK taxpayers have incomes in excess of £1 million. Of this figure, around 4,000 people are believed to be earning over £2 million. We can help you plan to minimise your personal tax burden – please contact us for further advice.