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.