21 March 2013

In case you hadn't noticed ...

The Telegraph blog records:

But rising numbers of people on above average earnings are paying income tax at 40pc. The starting point for higher rate tax has already fallen from £37,400 under Labour to £34,371 now. HMRC’s figures show that has increased the number of people paying 40pc or higher rates of income tax by 670,000 from 3.19m in in 2009 to 3.86m today.
As a result of Mr Osborne’s proposal to lower the starting point for 40pc tax to £31,865 with effect from April, 2014, nearly 5m people will be caught in the top rate tax net – even if their pay remains unchanged. By the time of the next election in 2015, Grant Thornton forecasts that more than 5.2m people will pay higher rate tax.

And it's not just those who suddenly find themselves in the higher tax bracket.  The reduced threshold means that everyone in the higher tax bracket will pay more tax than would otherwise have been the case.


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