UHY Ross Brooke Chartered Accountants

You don’t need to be self-employed or rich to benefit from using an accountant..

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..but arranging your tax affairs in a tax efficient manner can save you money.

One in five of all taxpayers are expected to be higher-rate taxpayers by 2027, which equates to almost 8m people.

As a result of the Government’s freeze on income tax allowances and thresholds, an additional 2.5m people will no longer be basic rate taxpayers by 2027/28.

Historic income tax situation

YearWho paid 40%
1991/923.5% of UK adults (1.6m)
2022/2311% of UK adults (6.1m)
2027/28 estimate14% of UK adults (7.8m) estimate

Who will pay the higher rate of income tax?

As a result of the 6 year freeze on income tax allowances and thresholds, the IFS predicts that more than one in eight nurses, one in six machinists and fitters, one in five electricians and one in four teachers are set to be higher-rate taxpayers by 2027. Isaac Delestre, a research economist at the IFS, said: “For income tax, the story of the last 30 years has been one of higher-rate tax going from being something reserved for only the very richest, to something that a much larger proportion of adults can expect to encounter.” He added that freezing thresholds leaves the income tax system “hostage to the vagaries of inflation.”

Mark Littlewood, director general of the Institute of Economic Affairs, commented: “The higher rate of tax was initially envisioned to capture an enhanced revenue stream from super-high earners. Managing, at some point, to get your salary to above £50,000 surely can’t be said to be in that category.”

It used to be that only the rich, the self-employed or those with complicated tax situations consulted an accountant for tax advice, but as many more are falling into the higher rate income tax brackets, it’s often worth these people seeking tax advice too.

How rich are you feeling, and can we help you to be better off?

Please get in touch for a chat about your income and let’s see whether we can decrease your tax burden.

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