Two million pay 60 percent income tax

Sean McCann, of NFU Mutual, said: “By then, the threshold will not have changed for 18 years, dragging more and more people into the higher marginal tax rate as salaries rise to keep up with inflation.”

He added: “Income between £100,000 and £125,140 is effectively taxed at 60 per cent, and if you add in the 2 per cent National Insurance, it means that just £38 of every £100 earned between these amounts goes into the pocket of the employee arrives. That means you lose £15,587 in tax and social insurance on the £25,140 of income over £100,000.

It comes as Mr Hunt also announced plans to lower the threshold for the top 45p income tax rate from £150,000 to £125,140 from April next year.

At £125,140, ​​the personal allowance is lost entirely, but even those earning above this threshold pay a 60 per cent marginal rate on their earnings between £100,000 and £125,140, ​​Mr McCann said.

According to analysis, 957,000 taxpayers would receive 45 percent. pay income tax when the reduction of the extra-tariff threshold starts next year – rising to 1.1 million in 2025-26.

Some experts argue that the government would generate more revenue if it tackled the 60 percent tax trap.

According to projections from the Office for Budget Responsibility, average earnings will grow by 18 percent between now and 2027-2028, but many taxpayers will see their pay increases eaten away in the coming years due to frozen tax thresholds and the impact of fiscal impediments.

The Treasury Department did not respond to a request for comment.

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