Nearly two million people in the UK have been pushed into the higher-rate income tax band since the start of the decade, according to new figures from HM Revenue and Customs (HMRC). In the 2023/24 tax year, 5.76 million individuals paid the 40% higher rate, a 50% increase from 3.83 million in 2019/20.
The year-on-year rise between 2022/23 and 2023/24 was 13%, adding 654,000 people to the higher-rate bracket. HMRC attributed this to the frozen higher-rate threshold of £50,271, unchanged since 2021/22, combined with rising employment incomes. Traditionally, tax thresholds rose with inflation, but the freeze introduced by the previous Conservative government has caused more people to experience fiscal drag.
Chancellor Rachel Reeves announced in the November 2025 Budget that the freeze would continue until 2030/31, meaning further increases in higher-rate taxpayers are expected. In 2023/24, higher-rate payers made up 15.7% of all UK taxpayers, nearly one in six, up from 12.2% (one in eight) in 2019/20. They contributed 32.0% of total income tax revenue.
Basic and Additional Rate Trends
The number of basic-rate taxpayers also rose significantly, reaching 29.40 million in 2023/24, up from 26.50 million in 2019/20, an increase of nearly three million. Between 2022/23 and 2023/24, the number jumped by 1.15 million. HMRC said this was driven by the personal allowance freeze at £12,570, which has been in place since 2021/22 and will remain until 2030/31. Basic-rate payers accounted for 29.9% of total income tax revenue in 2023/24.
The additional rate of income tax (45% on earnings over £125,140) saw a sharp increase, with 893,000 people paying it in 2023/24, up 57% from 570,000 in 2022/23. Although these additional-rate payers make up just 2.4% of all taxpayers, they contributed 37.7% of total income tax revenue.
These figures highlight the ongoing impact of fiscal drag, as frozen thresholds push more taxpayers into higher brackets despite no real increase in purchasing power.
