Figures published last week by HM Revenue & Customs (HMRC) show that the number of people in the UK paying income tax at the higher or additional rate is estimated to have reached a record 5 million last year.
The figures show that increasing numbers of people are being swept into higher and additional rate tax bands, where they pay income tax of 40 per cent and 45 per cent respectively, meaning that the UK’s tax revenues are becoming increasingly reliant on a small group of wealthy, high income earners.
However, the figures also reveal that more than a million fewer people will pay income tax this year than they did under the last Government, although low-paid workers are still caught in the net of national insurance contributions (NICs).
This is because the personal allowance has been raised with the aim of taking millions “out of tax altogether”. It has had the effect of reducing the number of people paying income tax from 31.3 million in 2010-11 to just 30.1 million this year. Had the discretionary increases in the personal allowance not been brought in, this figure would have risen instead of having declined.
There are 23 million adults in the UK who will not pay income tax this year, although a significant minority of these, who earn between £8,000 and £11,000 a year, still have to pay NICs. Meanwhile, the top 10 per cent of income tax payers pay three-fifths of the total tax in the UK, even though they only receive a third of total income.
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