The number of additional rate taxpayers will surpass one million for the first time as tax thresholds remain frozen.
Since the tax thresholds were frozen in 2021, HMRC is predicted to collect £63.2 billion in income tax this year, bringing the total to £272.6bn, which is £16.3bn more than the previous year.
This situation has resulted in 1.77 million people over the state pension age paying income tax since 2021, and this number will only increase as the thresholds remain unchanged until at least 2028.
Furthermore, due to the freezes, an additional 1.9m people have been pushed into the 40% tax bracket, with 310,000 more expected to join this year. Since 2010, it is predicted that there will be up to 6.1m more taxpayers, including 3.3m higher-rate taxpayers and 900,000 additional-rate taxpayers.
People will be paying more tax on their income, and HMRC is also expected to collect an extra £10.4bn in tax from savings in 2024/25. A basic rate taxpayer will pay 20% on any savings income over £19,050.
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