Home Business Britain relies on just 1 million top earners for £124 billion in income tax

Britain relies on just 1 million top earners for £124 billion in income tax

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Sir Keir Starmer is set to present Labour's investment agenda to global financial leaders at a conference in early October, aiming to attract tens of billions in foreign capital.

New data shows Britain is becoming increasingly reliant on a small number of top taxpayers to generate a significant share of its income tax revenue.

According to HM Revenue and Customs (HMRC), the 1.13 million people paying the 45p rate are expected to contribute £124 billion this year, representing more than 40% of all income tax collected by the Treasury.

This figure exceeds the total revenue from corporation tax, fuel duty, council tax and business rates combined. By comparison, the 29.5 million basic rate taxpayers will contribute £82.8 billion, or 28% of income tax revenue, while 6.3 million higher rate taxpayers will pay £93.7 billion, or 31% .

Labour’s Rachel Reeves is under pressure to reassess her planned tax rises on non-doms and higher earners, after Treasury officials warned that targeting a small group of top earners could raise less revenue than expected. Carl Emmerson, deputy director of the Institute for Fiscal Studies (IFS), warned that heavily taxing a small group of individuals could lead to changes in their behavior, making it a “riskier strategy.”

With income tax raising £300 billion for the government this year, Sir Keir Starmer has stressed that those with the “broadest shoulders” will have to bear the heaviest burdens as Labor prepares for a “painful” budget on October 30.


Jamie Young

Jamie is a seasoned business journalist and Senior Reporter at Business Matters, with over a decade of experience in UK SME business reporting. Jamie has a degree in business administration and regularly attends industry conferences and workshops to stay at the forefront of emerging trends. When Jamie isn’t reporting on the latest business developments, he is passionate about mentoring emerging journalists and entrepreneurs, sharing their wealth of knowledge to inspire the next generation of business leaders.

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