One in five taxpayers will pay higher tax rate
The Institute for Fiscal Studies (IFS) has warned that one in five taxpayers will pay the higher or additional rate of income tax by 2027.
Recent threshold freezes could see around 7.8 million people paying income tax almost four times higher than during the 1990s, at 40% or more. Household disposable income will also be 1.4% lower by 2027/28 than it would have been if thresholds increased in line with inflation. While no nurses and only 1 in 16 teachers were higher-rate taxpayers in the 1990s, this is projected to increase to 1 in 8 nurses and a quarter of teachers in the next few years.
"The six-year threshold freeze is set to become the biggest tax-raising measure since 1979 according to the IFS," explains Acumen's Tax Director, Fiona Ferrol. "Higher rate income tax is no longer the reserve of the very richest - over the last few decades, it's changed to become something a much larger proportion of the population can expect to encounter - an estimated 2.5 million more people by 2027-28."
