Recession cuts higher rate taxpayers by one million

Tax authorities expect the number of higher rate taxpayers to shrink from 3.89 million in 2007-8 to just 2.90 million in 2009-10. The amount of income tax paid is also expected to contract by £16bn from £91bn to £75bn over the same period. Higher rate tax payers are presently taxed at 40% on taxable income above £37,400. "These projections show how significant a contribution higher rate taxpayers make to the Exchequer - and how important it is to keep them contributing," says John Whiting of PricewaterhouseCoopers. With the threshold for paying the 40% tax rate recently hiked from £...