"A record number of people are now paying the highest rate of income tax, new data show.
This is due to wage inflation sending incomes above the tax threshold of £150,000 a year and reductions in the pension tax relief available to high earners.
By the end of this tax year HMRC expects 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.
Meanwhile, the number in lower tax bands has fallen or remained static.
Last night experts described the tax regime for top earners as “unfair” and drew parallels between it and the 40 per cent “higher rate” tax bracket, which has trapped millions of middle-class employees."
Source: Record number dragged 'unfairly' into highest rate of tax
This 45% "additional rate" is tulip enough, but what's really unfair is that these people (myself included) are robbed of personal allowance which creates 60%+ effect tax rate around £100-123k range - now THAT's totally unfair, yet very few publications talk about it.
P.S. Kunt Osborne's reductions in pension relief were designed to drag people into 45% rate (plus 13.8% employer NICs - never forget about those, they are uncapped!)
This is due to wage inflation sending incomes above the tax threshold of £150,000 a year and reductions in the pension tax relief available to high earners.
By the end of this tax year HMRC expects 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.
Meanwhile, the number in lower tax bands has fallen or remained static.
Last night experts described the tax regime for top earners as “unfair” and drew parallels between it and the 40 per cent “higher rate” tax bracket, which has trapped millions of middle-class employees."
Source: Record number dragged 'unfairly' into highest rate of tax
This 45% "additional rate" is tulip enough, but what's really unfair is that these people (myself included) are robbed of personal allowance which creates 60%+ effect tax rate around £100-123k range - now THAT's totally unfair, yet very few publications talk about it.
P.S. Kunt Osborne's reductions in pension relief were designed to drag people into 45% rate (plus 13.8% employer NICs - never forget about those, they are uncapped!)
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