The latest figures show that the number of tax payers in the 40% band and above will have increased from just over 2m in 1997, to almost 3.7m by the end of the 2008 financial year.
The city accountancy firm UHY Hacker Young estimates the majority of higher rate taxpayers would be at least £705.84 better off this year if thresholds had been raised at the rate of wage inflation.
‘This is a stealth tax that has received very little attention,’ Roy Maugham, UHY Hacker Young tax partner, said. Philip Hammond, shadow chief secretary to the Treasury, said: ‘Gordon Brown is using fiscal drag, raising allowances and thresholds by less than the rate of earnings growth to drag more and more people into the top rate of tax.
Mike Warburton, senior Grant Thornton tax partner, said part of the increase could be explained by the fact that the number of people working and paying tax had risen since Labour came to power in 1997.
Further reading:
Comments