Tax & Spend
Fiscal Drag Pulls 4 Million More UK Workers Into Tax Since 2020
- HMRC data show the impact of freezing income tax thresholds
- Number on 45% rate doubles to 862,000 after threshold lowered
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The number of Britons paying income tax has increased by more than 4 million in the last three years and 1.6 million people have been dragged into the higher 40% band after tax thresholds were frozen in 2021, according to official figures.
This year, 35.9 million earners will pay income tax of at least 20% because their income tops the £12,570 ($15,858) tax-free allowance, up from 31.7 million in 2020-21, HM Revenue & Customs said Thursday. The number paying 40% tax will increase from 4 million to 5.6 million. Those on the additional 45% rate will double to 862,000 after the threshold was lowered from £150,000 to £125,140 this year.