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‘Four million taxpayers’ set to pay top rates

More than four million taxpayers will pay tax at the highest rates this financial year, HM Revenue & Customs (HMRC) has predicted.

According to HMRC, 3.8 million people will pay income tax at the 40% rate during 2012/13, while over 300,000 will be subject to the 50% additional rate.

The figures represent a significant increase in the number of people paying higher rate tax, a change which has largely been put down to cuts in the threshold at which individuals begin to pay tax at the higher rates.

The news follows Chancellor George Osborne’s announcement in the March Budget that the 50% additional rate of income tax will be cut to 45% from 2013/14, with the Chancellor arguing that the measure has failed to raise sufficient additional income.

Meanwhile, the total number of people paying income tax is set to fall again this year from 30.1 million to 29.7 million, with the number of individuals paying tax at the basic rate of 20% likely to drop to 24.8 million.

Contact us for advice and assistance with your tax planning needs.