Number of additional rate taxpayers grows 39% since 2010


HMRC has published its latest analysis of their UK Income Tax Liabilities Statistics. The tables in this series provide breakdowns of the number of income taxpayers and Income Tax liabilities by age and gender, marginal tax rate, income source and tax band, and by country and Government Office Region.

It is estimated that the number of higher and additional rate taxpayers will drop from the high of 4.9m in 2015-16 to 4.7m in 2018-19. While the proportion of higher rate taxpayers normally rises as income growth exceeds indexation of tax thresholds, UK earnings growth was projected to be below indexation up to 2015-16.

Also, from 2015 to 2018 there were increases in the personal allowance which in turn caused the higher rate threshold to increase.
The decrease in these higher rate taxpayers is also because the higher rate threshold increased to £43,000 in 2016-17, rising even further to £45,000 in 2017-18.

The higher rate threshold was frozen at the 2011-12 level of £42,475 in 2012-13 before falling to £41,450 in 2013-14, rising by 1% to £41,865 in 2014-15 and rising again in 2015-16 to £42,385.

The higher rate threshold for Scottish taxpayers was frozen at £43,000 in 2017-18 for earned income before rising to £43,430 in 2018-19.

The additional rate tax band was introduced in 2010 by then Chancellor George Osborne for taxpayers earning over £150,000. Since its introduction the number of additional rate taxpayers has grown 39% from 236,000 in 2009-10 to 393,000 in 2018-19.

It is projected that in 2018-19 HMRC will collect £185bn from income tax, up from £178bn in 2015-16, with 60% of all income tax paid by the top 10% of taxpayers. It is also estimated that total earnings will hit £1.111bn in 2018-19.



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