Record number of taxpayers paying highest rate of tax, says study

A record number of taxpayers are paying the highest rate of income tax, according to new figures from HM Revenue & Customs (HMRC).

The figures show that the number of people paying the 45p rate of tax has jumped by more than a third over the last five years.

HMRC published data on the income tax liabilities of everyone in the UK. It shows that a total of 30.7 million Brits paid income tax in 2014/15 – the latest data available. This was down from a peak of 32.5 million in 2007/8.

Of those, 364,000 people paid at the additional income tax rate, while 25.1 million paid tax at the basic rate (20 per cent), and 4.2 million taxpayers paid at the higher rate (40 per cent).

Experts suggest that wage inflation and measures to reduce pension tax relief for higher earners may have contributed to the increase. The £150,000 additional rate tax band has also been frozen for a number of years, adding to the rise.

HMRC predict that the number of people paying the additional rate will jump a further 10 per cent by the end of this tax year (April 2018).

The data also shows that the top one per cent of taxpayers had a 12 per cent share of total income, and were liable for 27.7 per cent of all income tax.

The Revenue estimates that 15,000 UK taxpayers have incomes above £1 million, while 4,000 have income exceeding £2 million.