Number of 45p taxpayers SURGES by more than a third in five years as more than ever pay the highest rate of tax  

  • HMRC data reveals 364,000 people are expected to be paying 45% next year
  • It it up by 54 per cent since the band was first introduced seven years ago 
  • George Osborne created the 45p rate when he controversially cut the 50p rate
  • Labour want to increase the number of 45p payers by slashing the threshold 

By TIM SCULTHORPE, DEPUTY POLITICAL EDITOR FOR MAILONLINE

Published: | Updated:

The number of people paying the top 45p rate of tax has surged by a third over the last five years and is now at record high levels, it was revealed today.

Data from HMRC show 364,000 workers will be paying the top rate of tax in 2017/18 - up by more than half since the band was introduced seven years ago.

Wage inflation and reducing the pension tax relief for higher earners are thought to be the largest factors behind the increase.

Data from HMRC show 364,000 workers will be paying the top rate of tax in 2017/18 - up by more than half since the band was introduced seven years ago

Data from HMRC show 364,000 workers will be paying the top rate of tax in 2017/18 - up by more than half since the band was introduced seven years ago

The threshold for the 'additional rate' of tax has remained at £150,000 since it was introduced.

Labour is campaigning on a vow to slash it to £80,000 should it win the General Election, dragging in thousands more people.

Other figures in the HMRC report show the number of basic rate taxpayers has remained steady over the last four years and is expected to be 25,200,000 this year.

The number of people paying the higher rate of 40p is expected to drop around 4 per cent to 4,160,000 in 2017/18.

The Tories are committed to increasing the 40p threshold to £50,000 to protect the middle classes from paying it.

Tom McPhail, head of policy at Hargreaves Lansdown, told the Telegraph: 'The 45 per cent rate is now trapping high earners just as the 40 per cent rate did in the past.

Prime Minister Theresa May (pictured in Bath yesterday) has been dogged by tax questions on the campaign trail after making clear she would not repeat a promise to freeze income tax

Prime Minister Theresa May (pictured in Bath yesterday) has been dogged by tax questions on the campaign trail after making clear she would not repeat a promise to freeze income tax

'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.'

Prime Minister Theresa May has been dogged by tax questions on the campaign trail after making clear she would not repeat a promise to freeze income tax.

Mrs May repeatedly insisted the Conservatives believe in low taxes but the failure to repeat David Cameron's 'tax lock' promise will fuel suspicion of higher tax bills.

Labour has set out an agenda for significant increases on the top 5 per cent of earners. People earning £80,000 would be moved into the 45p band while a new higher rate of 50p would be imposed on earnings over £150,000.

The Liberal Democrats want an extra penny on all existing tax bands to pay for extra cash in the NHS.  

Labour's Jeremy Corbyn (pictured in Cambridge last night) has set out an agenda for significant increases on the top 5 per cent of earners

Labour's Jeremy Corbyn (pictured in Cambridge last night) has set out an agenda for significant increases on the top 5 per cent of earners

 

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