The number of higher rate taxpayers has risen by almost 400% over the last 30 years according to recent research. More than 1 million people have become higher rate taxpayers since the Coalition formed a government in 2010.
The rise is caused by the government’s policy of lowering the threshold above which higher rate tax is payable: the rate has been frozen or adjusted below the rate of inflation. The threshold currently stands at £41,865 but should be £50,000 if it had been increased every year by the rate of RPI.
As a result, there are now an estimated 4.4 million people paying higher rate tax and over 300,000 paying the 45% additional rate.
If you are one of the people affected by the rise, you would be wise to carry out a financial audit to identify areas where you could save tax through saving or investing. Vehicles such as ISAs and pensions are common ways of doing this, but there other methods too.
Contact Beckett Financial Services on 01284 754500 or email firstname.lastname@example.org