Accountancy firm Bates Weston has reported that the number of higher-rate taxpayers is set to increase in 2022-23, with a record 6.1 million individuals expected to pay the higher (40%) or additional (45%) rates of income tax.
The rise comes after the Government reportedly froze all UK income tax thresholds for four years in 2021, bringing 6.1 million people into the higher or additional rates for income compared to 4.3m in 2019.
Higher UK inflation means even more people will be dragged into higher tax brackets, according to the Office for Budget Responsibility.
In addition, the firm reports that the number paying the additional rate, charged on portions of incomes over £150,000, rose from 421,000 to 629,000 between the 2019/20 and 2022/23 tax years.
Chancellor Rishi Sunak imposed a freeze on the income tax personal allowance and all tax thresholds in the April 2021 Budget, which he expected to raise £8.1bn a year by 2025/26.
The additional rate threshold, however, has been frozen at £150,000 since it was introduced in 2010.
The official forecasts reportedly show that the total tax burden is set to rise to its highest levels since the 1940s, but the Government defended its taxation policy by highlighting the planned rise in the threshold for paying National Insurance in July.