Nearly two million more people in the UK have been drawn into the higher-rate income tax band since the start of the decade, according to new figures from HM Revenue and Customs (HMRC).
Higher-rate taxpayers surge by 50%
A total of 5.76 million individuals paid the higher rate of income tax in the 2023/24 tax year, up 50% from 3.83 million in 2019/20. This represents an increase of 1.93 million over four years.
Year-on-year, the number rose by 654,000 between 2022/23 and 2023/24, a jump of 13%. HMRC attributed the rise to the unchanged higher-rate threshold and increases in income, largely from employment.
The higher-rate threshold of £50,271 has been frozen since 2021/22, meaning more people are pulled into the 40% tax band as their earnings grow. This policy, originally introduced by the previous Conservative government, continues to cause fiscal drag.
Frozen thresholds extended until 2030/31
Chancellor Rachel Reeves confirmed at the November 2025 Budget that the freeze will remain in place until 2030/31. This is expected to push even more taxpayers into the higher bracket.
Higher-rate payers now account for 15.7% of all UK taxpayers, nearly one in six, compared with 12.2% (around one in eight) in 2019/20. They contributed 32.0% of total income tax revenue in the year to March 2024.
Basic-rate taxpayers also on the rise
The number of basic-rate taxpayers reached 29.40 million in 2023/24, up from 26.50 million in 2019/20. This includes a year-on-year increase of 1.15 million. HMRC said this was driven by the personal allowance remaining frozen at £12,570 since 2021/22, alongside rising incomes.
The personal allowance freeze is also set to continue until 2030/31, pulling more individuals into paying income tax. Basic-rate payers accounted for 29.9% of total income tax revenue in 2023/24, slightly less than the higher-rate share.
Additional-rate taxpayers jump 57%
The number of people paying the additional rate of 45% on earnings over £125,140 surged from 570,000 in 2022/23 to 893,000 in 2023/24, a 57% increase. Though they make up just 2.4% of all taxpayers, they contributed 37.7% of all income tax raised.
Expert warns of growing tax burden
Sarah Coles, head of personal finance at AJ Bell, highlighted that nearly eight million pensioners are paying £24 billion in tax annually, with almost half a million of them paying higher-rate tax. She noted that higher and additional-rate taxpayers together shoulder almost 70% of all income tax revenue.
“Frozen tax thresholds mean this is only going to get worse for everyone,” Coles said. “In this environment, it’s vital to make plans to ensure you don’t pay more than your fair share of tax.”
