How the top tax rate became a middle-class problem

W

hen Gordon Brown’s Labour government introduced a new top rate of income tax, fewer than one in every hundred taxpayers had to worry about it.

However, the number of workers liable for the additional rate is predicted to surge to 1.7 million by 2030 — more than a seven-fold rise over two decades.

The corrosive combination of inflation and frozen tax thresholds means that hundreds of thousands more earners will be dragged into paying the 45p in the pound rate, and will have to grapple with a host of other tax hits that come with it.

The additional rate of income tax is 45 per cent on income above £125,140. When introduced in 2010, it was set at 50 per cent on income above £150,000 and about 236,000 people paid it.