Smarter News Now
  • About Us
  • Privacy Policy
  • Terms & Conditions
  • Contact Us
  • Email Whitelisting
No Result
View All Result
  • Top News
  • Economy News
  • Forex News
  • Investing News
  • Stock News
  • Politics News
  • Editor’s Pick
  • Top News
  • Economy News
  • Forex News
  • Investing News
  • Stock News
  • Politics News
  • Editor’s Pick
No Result
View All Result
Smarter News Now
No Result
View All Result
Home Politics News

Extra 2m workers pay higher-rate tax under Boris Johnson

by
July 1, 2022
in Politics News
0
Extra 2m workers pay higher-rate tax under Boris Johnson
0
SHARES
10
VIEWS
Share on FacebookShare on Twitter

More than two million people have become higher-rate taxpayers under Boris Johnson’s government, fuelling a backlash from Tory MPs.

Figures released by HM Revenue & Customs yesterday showed that 6.1 million people — equivalent to one in six adults — now pay at the 40 per cent rate, up from 4.2 million in 2019. They include 629,000 who pay the highest level of income tax — 45 per cent on earnings above £150,000 — up from 421,000 in 2019-20.

It will add to concern among Tory MPs that the Conservatives’ reputation as the party of low taxation is under threat. More people have been dragged into paying the higher rate because of a decision by Rishi Sunak, the chancellor, to freeze the income tax personal allowance and higher-rate threshold.

The Institute for Fiscal Studies has said that the four-year freeze at £50,271, announced in the budget last year, could raise as much as £13 billion in part because of soaring inflation.

LCP, a consultancy, projected that the number of higher-rate taxpayers would increase by another million before the end of this parliament because wages and pensions are expected to increase rapidly.

Sir Steve Webb, a partner at LCP and a former Liberal Democrat pensions minister, said: “Paying higher-rate tax used to be reserved for the very wealthiest but this has changed very dramatically in recent years.

“The starting point for higher-rate tax has not kept pace with rising incomes, and the five-year freeze on thresholds has turbo charged this trend. People who would not think of themselves as being particularly rich can now easily face an income tax rate of 40 per cent and around one in five of all taxpayers will soon be in the higher-rate bracket.”

In 2010 there were 3.26 million people in the top two bands, paying a combined £75.33 billion in income tax. In 2022-23 there will be 6.13 million, contributing £166.21 billion.

According to analysis by Blick Rothenberg, the accountancy firm, a worker who earned £80,000 in 2010 would now be on £104,838 if their earnings kept pace with inflation. This means they would now be paying £8,405 more in income tax thanks to fiscal drag.

Under the same scenario a worker on £48,000 in 2010 would now be paying an extra £3,463 in income tax, despite being no wealthier in real terms than they were 12 years ago.

Johnson and Sunak will resist calls from Tory MPs to announce tax cuts in a joint economic speech expected next month that will set out the government’s economic strategy. They are under pressure from cabinet ministers and backbenchers to help people with the cost of living.

Government sources previously suggested that Johnson and Sunak would announce a broad timeline for future tax cuts in an effort to alleviate pressure from Tory ranks. However, any announcements will now be delayed until the autumn budget at the earliest.

Johnson and Sunak have also said that tax cuts would not be implemented while inflation remained high. They have yet to agree on the contents of the speech, which is due to be made within the next three weeks, although some in government suggest that it could be delayed further. It is expected to focus on a broad overview of the government’s economic strategy, helping to “join the dots” between varying aspects of policy.

“This speech will not be about tax cuts. They’re a matter for fiscal events,” a source involved in discussions about the speech said. “It’s about setting out a medium to long-term plan for dealing with the cost-of-living crisis.”

The prime minister believes that inflation is likely to ease early next year, providing the government with space for tax cuts. He is said to be particularly keen to reverse a planned rise in corporation tax from 19 per cent to 20 per cent and to make further reductions in income tax.

By 2025 Britain is due to have its highest postwar tax burden. Paul Johnson, director of the Institute for Fiscal Studies, said it was a “fairytale” for Sunak to suggest he had a plan to cut taxes but pointed out that the Treasury’s income remained low by European standards.

Streamlining the tax system is the way to unlock growth, he told the Future of Britain conference yesterday. “We know how to get more growth and we explicitly decide not to do it.”

Martin Lewis, the money saving expert, told the conference organised by Sir Tony Blair that Sunak had called him for advice four days before announcing his last package of support in May. Lewis said that he would resign if he were chancellor.

He added: “The number of ministers I meet who just know bugger all about the subject when they get there and you have to explain on such a remedial level when you talk to them about the subject. You can’t even begin to come up with the clever stuff, because you just trying to explain to them ‘I’m afraid it doesn’t work that way minister, not politically, but factually, you just don’t understand how this system works’.”

David Davis, the former Brexit secretary, has said that the government should prioritise tax cuts over infrastructure investment. He told Today on BBC Radio 4: “The simple truth is that there are priorities in everybody’s life and for most of the people in the red wall seats the first issue is paying the bills. If the government is stopping you doing that, that is a real problem.”


ShareTweetPin

Related Posts

Usain Bolt moves to trademark signature victory pose
Politics News

Usain Bolt moves to trademark signature victory pose

August 23, 2022
London to get new airport as Manston is cleared for take-off
Politics News

London to get new airport as Manston is cleared for take-off

August 23, 2022
Over 1,000 regional businesses are fending off cyber-attacks with police-led cyber resilience
Politics News

Over 1,000 regional businesses are fending off cyber-attacks with police-led cyber resilience

August 23, 2022
British Airways to cancel further flights up to the end of October
Politics News

British Airways to cancel further flights up to the end of October

August 23, 2022
Microsoft in trademark row with UK children’s reading firm Word Windows
Politics News

Microsoft in trademark row with UK children’s reading firm Word Windows

August 23, 2022
Crypto fraud revenues drop 65% following market meltdown
Politics News

Crypto fraud revenues drop 65% following market meltdown

August 23, 2022
Next Post
BT staff vote for first national strike in 35 years

BT staff vote for first national strike in 35 years

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Email Address *
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!
 

Recommended

J.T. Poston holds on for wire-to-wire victory at John Deere

J.T. Poston holds on for wire-to-wire victory at John Deere

July 4, 2022
Globe wants DITO to pay P622M for deal ‘violation’

Globe wants DITO to pay P622M for deal ‘violation’

August 9, 2022
Cebu City rushes to address flooding problems

Cebu City rushes to address flooding problems

August 9, 2022
Abortions can resume in Texas after judge blocks pre-Roe v. Wade ban

Abortions can resume in Texas after judge blocks pre-Roe v. Wade ban

June 29, 2022
Hanjin shipyard collapse leaves FIRB wary on future incentive grants

Hanjin shipyard collapse leaves FIRB wary on future incentive grants

June 7, 2022
Crypto fraud revenues drop 65% following market meltdown

Crypto fraud revenues drop 65% following market meltdown

August 23, 2022
  • About Us
  • Privacy Policy
  • Terms & Conditions
  • Contact Us
  • Email Whitelisting

Copyright © 2022 SmarterNewsNow.
All Rights Reserved.

Disclaimer: SmarterNewsNow.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

No Result
View All Result
  • About Us
  • Contact Us
  • Email Whitelisting
  • Home
  • Privacy Policy
  • Terms & Conditions
  • Thank You

Copyright © 2020 SmarterNewsNow. All Rights Reserved.