WEALTHY people will be hardest hit by fresh tax hikes being introduced in April, the Institute of Fiscal Studies (IFS) said today.
The richest tenth of the country will lose on average three per cent of their net income because of the changes, while most others will lose just one per cent, the IFS revealed.
And 750,000 more people will be affected by the higher rate of tax, as the government brings down the threshold at which the top rate kicks in.
High earners will suffer from the increase in national insurance contributions, and restrictions on the amount that can be invested tax free in pensions.
“Those with the highest incomes have already been hit by the new 50p rate on incomes above £150,000 and the loss of the personal tax allowance for all those with incomes over
£100,000,” the IFS noted.
Changes to child tax credits will result in a massive hike in marginal tax (from just over 30 per cent to over 70 per cent) for 175,000 working age adults with an annual income of
“The set of the changes coming in April is complex and the pattern of gains and losses reflects this,” said James Browne, economist at the IFS.