An official House of Commons report highlighting a huge rise in the number of workers dragged into the 40p tax rate is today branded a disgrace by a senior UKIP figure.
The figures, unveiled in a report in today’s Daily Mail, show that the number of people paying the 40p rate of income tax has risen by 400% over the past 30 years.
There are now 4.4 million people paying tax at 40p in the pound, compared to just 930,000 in 1984. The number caught by the rate – originally designed as a tax only on the very wealthy – increased rapidly during Gordon Brown’s tenure at the Treasury because he raised the threshold for payment more slowly than earnings growth.
But the situation has got even worse under George Osborne, with the Chancellor having actively lowered the threshold for paying the higher tax rate – down from £43,875 at the last election to £41,865 today. As a result 1.1 million extra people have been dragged into the higher rate. Recently Mr Osborne came under fire after appearing to suggest that people enjoy getting caught in the 40p rate.