Hundreds of thousands of higher rate tax earners hit by Autumn Statement rule change
A QUARTER of a million higher earners will be stung for more tax after Jeremy Hunt today dragged them into the 45p rate.
From April, anyone earning more than £125,140 will pay the additional income rate – down from the current threshold of £150,000.
The raid on the rich is set to cost 246,000 workers around £580 extra per year as they’re pulled from the 40p to 45p band.
He told MPs: “Asking more from those who have more means that the first difficult decision I take on tax is to reduce the threshold at which the 45p rate becomes payable from £150,000 to £125,140.
“Those earning £150,000 or more will pay just over £1200 more a year.”
It came in a gloomy Autumn Statement where the Chancellor drove up taxes and slashed spending in a scramble to balance the books.
Along with the richest, millions of ordinary workers are being clobbered with stealth taxes as thresholds were frozen for another two years until 2028 – rather than rising with inflation.
Mr Hunt said: “I am maintaining at current levels the income tax personal allowance, higher rate threshold, main national insurance thresholds and the inheritance tax thresholds for a further two years taking us to April 2028.”
Those earning the average salary of £33,000 this year will pay an extra £2,500 in tax by 2027 according to analysts AJ Bell.
And those earning £50,000 will pay an additional £6,500 income tax.
Mr Hunt snared more people into the 45p rate just weeks after predecessor Kwasi Kwarteng had vowed to abolish it altogether in his doomed mini-Budget.
But vowing to plug a £60billion black hole in the public purse, the new Chancellor said: “The United Kingdom will always pay its way.”
He said: “There is a global energy crisis, a global inflation crisis and a global economic crisis.
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“But the British people are tough, inventive, and resourceful. We have risen to bigger challenges before.
“We aren’t immune to these global headwinds, but with this plan for stability, growth and public services – we will face into the storm”.
However in good news for hard-up Brits Rishi Sunak is expected to authorise another round of cost of living payments.
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To cushion the blow of rising energy bills, eight million vulnerable benefit claimants will be given a £650 cash boost.
Poorer pensioners will get £300 and there will be a £150 disability payment.