By James Tapsfield, Political Editor For Mailonline Published: 09:07 EDT, 14 October 2024 | Updated: 19:57 EDT, 14 October 2024
Top-rate taxpayers are set to account for two-fifths of all income tax this year, according to official estimates.Figures issued by HM Revenue & Customs show there are 1.13million people in the 45p rate band.But they are expected to pay £124billion to the Exchequer – 41 per cent of the £301billion total take from income tax. That is equivalent to around £110,000 each, according to the statistics released earlier this year.In comparison, 6.3million on the higher 40p rate are due to hand over £93.7billion, and 29.5million on the basic rate £82.8billion.The numbers on the additional rate have nearly doubled from 587,000 in 2022, after the threshold was reduced to £125,000. In total there are estimated to be 37.4million taxpayers this year.
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The numbers on the additional rate have soared after the threshold was reduced to £125,000Many more are likely to be drawn into the band over the coming years, as the thresholds have been frozen.People in the top 1 per cent of incomes – a slightly different measure – are expected to make up 28.2 per cent of income tax receipts this year. The burden on the wealthier was highlighted as Chancellor Rachel Reeves draws up a ‘painful’ Budget.Although Labour has committed to holding the main rates of income tax, NICs and VAT, there are fears the government will mounts raids on capital gains and inheritance tax. Keir Starmer has vowed to protect ‘working people’. Carl Emmerson, deputy director of the Institute for Fiscal Studies (IFS), told the Telegraph that focusing tax raids on small numbers of people was ‘risky’. HMRC figures show how the income tax contribution varies as earnings increase’If you can get the revenue, it might be nice to have. But the problem is, if you’re hitting a really small number of people for quite a lot of tax each, what happens if they change their behaviour?’ he said.’If you put a penny on income tax, you’re taxing loads of people by a small amount. And most people, I would suggest, will just go to work and do exactly what they would have done anyway.’I don’t think many people would choose to work fewer hours each week, or not bother to take a more highly paid job, or change the country where they live. ‘If, on the other hand, you’re trying to get a huge amount of money from a small number of people, I would just worry more about how much you’re hitting them or whether they might change their behaviour.’ People in the top 1 per cent of incomes – a slightly different measure – are expected to make up 28.2 per cent of income tax receipts this year
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Just over a million top-rate taxpayers are set to contribute two-fifths of ALL income tax this year – £124billion – handing over an average of £110,000 each