There will be a surge in the number of people paying income tax at the 40% rate or above during this this Parliament as a result of a long-term freeze in tax thresholds and rampant inflation, according to analysis by pensions consultancy LCP.
In 2021, the HMRC estimated there were 4.3m people paying income tax at the higher rate of 40% or the additional rate of 45% at the time of the last election in 2019/20. It also estimated the number of higher rate taxpayers would have grown to 4.6m people by 2021/22, an increase around 300,000. However, LCP highlighted these HMRC estimates were based on Office for Budget Responsibility (OBR) estimates for wage growth from March 2021, which have since changed significantly. HMRC's estimate of the number of higher rate taxpayers in 2021/22 was based on assuming a growth in total wages a...
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