One in five taxpayers will pay higher-rate tax by 2027, says IFS

By 2027-28 the number of people paying income tax at 40% or above will reach 7.8 million – that’s one in five taxpayers and one in seven of the adult population according to analysis from the Institute for Fiscal Studies (IFS). This compares with 3.5% of UK adults (1.6 million) in 1991-92 and 11% (6.1 million) in 2022-23. For the 40% rate to affect the same fraction of people as it did in 1991 the threshold would need to be nearly £100 000 in 2027-28 – almost double its actual level of £50 270.

The IFS researchers found that in the 1990s virtually no nurses and just one in 16 teachers paid higher-rate tax but by 2027-28 more than one in eight nurses and one in four teachers are set to be higher-rate taxpayers.

The six-year freeze to income tax allowances and thresholds which...