Embargoed: 00:01, Friday 9th February 2024
Millions more people are paying income tax than in 2010, according to new research by the TaxPayers’ Alliance, with the total number surging from 31 million to 35.5 million, an increase of 4.5 million.
In 2014, current foreign secretary, Lord Cameron, described lifting millions of people out of income tax while prime minister as “one of the proudest things I have done in government.” That was after the then Coalition government lifted the personal allowance from £6,475 to £10,000.
Yet 1.7 million more people are paying the basic rate of income tax, with the total number increasing from 26.8 million to 28.5 million since 2010. Since thresholds were frozen in 2021/22, an additional 1.1 million are paying the basic rate of income tax and an additional 1 million are paying the higher rate.
Since thresholds were frozen, the North East, Yorkshire and the Humber and Wales are set to be the UK regions with the largest percentage increases in the total number of people paying income tax and in the number of people paying the basic rate. The largest percentage increases in the number of people paying the higher rate were Wales, the North East and Northern Ireland.
By contrast, London saw the smallest percentage increase of people paying income tax since 2021/22, both in terms of the basic rate, the higher rate and the additional rate.
Frozen thresholds have been a major contributor to the record high tax burden in the United Kingdom, with TPA analysis of the academic literature on tax and growth finding a consensus that a high tax burden dampens growth. The TPA is campaigning for a cut to income tax.
Darwin Friend, research director of the TaxPayers' Alliance, said:
"Taxpayers in every corner of the United Kingdom are struggling with the bruising impact of tax rises and threshold freezes.
“The transformation of Britain into a high-tax, low-growth economy has hit almost every household, from Edinburgh to Eastleigh and Cardiff to Colchester.
“Ministers must use the budget to give taxpayers the income tax relief they desperately need.”
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