Call 0161 366 6535 - email admin@amhaccounts.com

IFS states high earners 'increasingly hit by lack of indexation'

12 Apr 2019

The Institute for Fiscal Studies (IFS) recently published a report which revealed that more people are being 'dragged into higher rates of tax' as a result of tax thresholds failing to rise in line with the rate of inflation.

The report states that, in 2007, the year before the top income tax threshold of £150,000 was announced, there were 319,000 individuals with income above this level. The IFS suggested that, as a consequence of the threshold not having moved since it was first announced, there are now 428,000 taxpayers with income above this level.

The report also stated that other tax thresholds being frozen in nominal terms include: the inheritance tax (IHT) threshold, at £325,000; the VAT registration threshold at £85,000, which is set to remain at this level until 2022; and the £110,000 and £150,000 thresholds at which the annual limit on tax-privileged pension saving begins to be reduced. Additionally, the £100,000 threshold at which eligibility for Tax-Free Childcare is removed is not adjusted for inflation.

Paul Johnson, Director of the IFS, commented: 'Recent governments have, rather stealthily, increased the tax rates on high earners. If the government thinks there is a case for more high-income people to pay more tax, it should be upfront about that view.'

Try a site search Tax return, dividends, pension, spring statement...

Company details

Hyde Office:
Allen Mills Howard & Co, Library Chambers, 48 Union Street, Hyde, Cheshire SK14 1ND
Tel: 0161 366 6535

Failsworth Office:
Allen Mills Howard & Co, 222 Oldham Road, Failsworth, Manchester M35 0HH
Tel: 0161 681 5600

About us

Chartered Certified Accountants & Registered Auditors.

We are an established Chartered Certified accountancy practice with offices in the North West of England.

© 2019 Allen Mills Howard & Co. All rights reserved. We use cookies on this website, you can find more information about cookies here.