Chancellor’s decision to drag more taxpayers into top income tax rate is a dramatic move

Publication featured in: City AM, Daily Telegraph, Daily Mail

These announcements will sharply increase the number of taxpayers paying the top rate of tax.

The Government will see its tax take increase on those high earners by £3.7bn by 2027/28.

Other recent increases in the tax burden on high earners had been undertaken through stealth tax such as by freezing the tax threshold.

This is a major attack by the Chancellor on higher earners. It’s going to bring in people into the upper rate who feel that they are far from being rich.

The £150,000 rate was only introduced in the first place as an emergency response to the Global Financial Crisis and HMRC soon came to rely on it for its normal income. Now it’s gone a major step further and dragged many more people into that tax band.

The Government needs to be careful not to squeeze higher earners too hard and risk losing internationally-mobile talent overseas. Should we really be comparing ourselves to the tax rates on higher earners in high tax jurisdictions like France.

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