Frozen tax thresholds bite as 55% more pay additional rate 

Hundreds of thousands dragged into higher paying tax brackets 

Jenna Brown
clock • 3 min read

The number of people who pay additional rate tax on their income has reached its highest level ever at 862,000, according to latest government figures.  

Officials also projected 55% more people would fall into the additional rate tax band in 2023/24.  AJ Bell said the figures "laid bare" the impact of the government's decision to lower the additional rate income tax band from £150,000 to £125,140 at a time when "wages are growing fast".   Tax bands have been frozen since 2021, the result of which is now being felt as more and more people fall into higher brackets. Then-chancellor Rishi Sunak put measure in place to freeze thresholds until 2027/28. The policy was extended by Jeremy Hunt and expected to raise nearly £30bn extra ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Tax Planning

Partner Insight: Royal London's Fiona Hanrahan — 'Your top tax year end questions answered'

Partner Insight: Royal London's Fiona Hanrahan — 'Your top tax year end questions answered'

Fiona Hanrahan, Senior Intermediary Development and Technical Manager, Royal London
clock 08 February 2024 • 3 min read
Treasury collects £2bn in 12 weeks as IHT receipts continue to soar

Treasury collects £2bn in 12 weeks as IHT receipts continue to soar

Figure breaks down at £22m a day for the government’s coffers

Hope William-Smith
clock 21 July 2023 • 2 min read
Advisers and clients say financial decision-making getting harder

Advisers and clients say financial decision-making getting harder

Past five years has seen more and more political and economic uncertainty

Jenna Brown
clock 06 June 2023 • 2 min read