A record number of people are now paying the highest rate of income tax, according to HMRC’s Income Tax Liabilities Statistics report. By the end of this tax year, 364,000 workers to be paying 45 per cent income tax, a 10 per cent rise on the previous year and a 54 per cent rise since the tax band was introduced seven years ago.
The dramatic increase is as a result of wage inflation, which is sending incomes above the tax threshold of £150,000 a year, and reductions in pension tax relief.
In 2017-18, the top 50 per cent of taxpayers are expected to be liable for 90.3 per cent of total tax. Meanwhile the top 10 per cent of taxpayers are projected to be liable for 59.2 per cent of total tax.
Commenting on the report, a spokesperson says: “High earners are already contributing a larger proportion of income tax than ever before and cuts to pensions have unfairly removed their opportunity for them to use tax efficient savings products to reduce their tax bill.
Whether you are in business as an individual or as a corporate, you will want to ensure that you pay no more tax than you are legally bound to do. Our experts at Beavis Morgan can ensure that your tax affairs are as efficient as they can be, to fit your circumstances. In addition, we can look ahead to retirement and inheritance tax planning.
If you would like to know more please contact Alan Ford or your usual Beavis Morgan Partner.