Two million British workers face paying 60% of their income in taxes as a result of the latest round of hikes by the ostensibly conservative government, which is also spending billions more on state employees’ pensions.
Chancellor Jeremy Hunt, a David Cameron-era anti-Brexit holdover who played a key role in ousting Liz Truss and installing Rishi Sunak as Prime Minister, announced this week that he would raise taxes by another £24 billion.
According to the NFU Mutual financial advice firm’s analysis of Hunt’s tax increases, up to two million people will be subject to paying 60% of their income in tax by 2028 as a result of inflation pushing their salaries into frozen higher tax bands.
Because those earning between £100,000 and £125,140 do not benefit from the tax-free personal allowance available to other earners, they will fall into a trap in which six out of every ten pounds earned above the threshold will be paid to the government.
Currently, approximately 1.3 million Britons earn more than £100,000 — however, inflation is expected to drag 700,000 more taxpayers into the band.
Meanwhile, as a result of tax increases and lost economic growth due to the impending recession, British workers are expected to lose £15,000 in real pay rises over the next five years, according to the Resolution Foundation, which predicts that wages will not return to 2008 levels until 2027.