3.2 MILLION WORKERS SET TO ENTER HIGHER TAX BAND BY 2027

Official figures from HMRC show that 3.2 million taxpayers are projected to become higher-rate taxpayers by 2027. The projection reflects a significant shift in the composition of higher-rate taxpayers under Prime Minister Andy Burnham's Labour government. According to HMRC data, the number of higher-rate taxpayers has risen from approximately 4.43 million in 2021/22 to a projected 7.7 million in 2026/27, an increase of 3.27 million people over five years.

Marianna Hunt, Personal Finance Expert at Fidelity International, attributed the rise partly to frozen tax thresholds. The personal allowance, the amount workers can earn before paying income tax, has remained frozen at £12,570 since April 2021. Ms Hunt stated that four of the largest annual increases in higher-rate taxpayers since HMRC records began have all occurred since 2021, and noted that the number paying the additional rate is projected to more than double over four years. She characterised the phenomenon as "fiscal drag", where frozen thresholds pull more workers into higher tax bands without corresponding income growth reflecting genuine wealth increases.

Mr Burnham told The Times that the frozen personal allowance was "the thing I heard the most on the doorsteps" during campaigning in Makerfield, stating it had become "lodged in my mind". The Prime Minister has stepped back from prioritising a personal allowance increase, acknowledging the cost of doing so. Ms Hunt observed that higher-rate taxpayers are no longer a small group of top earners, but millions of workers on relatively normal incomes now paying rates historically reserved for much higher earners.