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Top-rate taxpayers have doubled to four million since 1997
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30 June 2008
The number of workers who have to pay the top rate of tax has doubled under Labour, official figures reveal.
Four million are now paying the 40 per cent rate. When Labour came to power, it was
2.1million.
The figures, published by HM Revenue and Customs, show how an extra 140,000 taxpayers have been caught in the net over the last year.
Four million people are now in the 40% tax bracket. The increase is partly down to a reshuffle of the tax brackets after the 10p tax changes
To qualify as a higher-rate taxpayer, you must be earning a gross salary of £40,835 or more. This means many who would not consider themselves wealthy, such as senior teachers or mid-ranking civil servants, are paying 40 per cent on part of their income.
Despite having a salary about £15,000 over the national average, their finances are under attack from huge rises in their household bills, particularly food, fuel and mortgage costs.
The rise in the number of higher-rate payers is partly due to changes to the tax system after the 10p tax debacle.
Everyone's personal allowance - the amount that can be earned before paying tax - was increased by £600 from £5,435 to £6,035.
But the level at which top-rate tax begins was cut from £36,000 to £34,800 in excess of the personal allowance. As a result, the point at which a worker starts paying 40 per cent tax falls from a gross salary of £41,435 to £40,835.
Mike Warburton, senior tax partner at accountants Grant Thornton, said: 'Hard-working people with incomes which are not that much above the average are drawn into the higher-rate tax net.'
The Treasury said the fact that there are four million higher rate taxpayers is a sign of the UK's economic success.
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