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More fall into 40p tax bracket

23.04.14

According to the Daily Mail, the number of people who fall into the 40p tax bracket has risen by 400 per cent in the past three decades.

Originally designed to affect just a small percentage of the UK's working population, approximately one million additional taxpayers have fallen into the threshold since the coalition took power in 2010.

"The 40p rate kicks in at too low a level – that is becoming increasingly clear. The original idea was to catch people on earnings that were way above the average," said former minister John Redwood.

"Now it's catching people who are struggling to pay a mortgage. I think the Conservative Party will want to be seen as a party that does not penalise people who work hard and want to be successful, and that does mean taking action on this issue."

As stated in our UK Tax Updates 2014/15 article earlier this month, the higher rate tax threshold increased to £41,865 at the start of this tax year, and will increase again by 1% to £42,285 at the start of the next tax year.

As a self-employed contractor, it's considerably easier for you to get your tax right. If you need any help with either this or previous year's self-assessment returns then Taxback.com can help. Click here for more information and to benefit from a reduced fee for their services.

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