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Higher rate taxpayers to ‘net Treasury an extra £10bn’
The Government is on course to net an extra £10 billion in income tax in 2010/11, according to official estimates from HM Revenue and Customs (HMRC).
Experts predict that almost all of the additional revenue will come from 40% and 50% rate taxpayers.
If accurate, the figures could mean that the Government’s total tax take will reach around £173bn, reversing the two-year fall in revenue witnessed during the recession.
The 40% higher tax rate is levied on taxable incomes above £37,400 and a new 50% top rate of income tax is now levied on taxable incomes above £150,000 a year.
This, coupled with the gradual erosion of the personal income tax allowance for people earning over £100,000, means that HMRC could see a significant rise in tax revenues during this financial year.
Meanwhile, analysts expect that the total number of income taxpayers will increase by 400,000 to 30.6 million in 2010/11. It is thought that the number of 40% and 50% taxpayers will rise by 192,000 to 3.412 million.