Quarter of taxpayers in London and southeast stung by higher income tax
![](https://www.cityam.com/wp-content/uploads/2021/04/income-tax-491626_1920-scaled.jpg?w=742)
A quarter of taxpayers in London and the southeast of England now fall within the higher rate of income tax, it has been revealed.
Almost 2.5m people in the capital and commuter belt constituencies now come under the 40 or 45 per cent tax bracket, analysis of HMRC data by the Liberal Democrats has shown – more than twice the 1m who were eligible for the 40p tax rate in 1999.
In London, 27.3 per cent of taxpayers now pay either 40 or 45 per cent in income tax, while the southeast figure is 22.7 per cent, according to the Telegraph. This compares to 18 per cent across the UK as a whole, the paper says.
HMRC data, the party says, shows that 5.6m people in the UK are projected to pay 40p in income tax in 2023-24 – a rise of almost 41 per cent compared to 2020-21.
It comes after Chancellor Jeremy Hunt froze income tax thresholds until 2028 in last year’s autumn statement in a so-called ‘stealth tax’, meaning significant quantities of workers were brought into higher tax rates.
Ministers are also reportedly considering moving to uprate benefits in line with earnings as opposed to inflation from next year in a bid to cut public spending and save £1bn as Prime Minister Rishi Sunak battles to meet his fiscal pledges.
‘Stealth taxes’
Lib Dem treasury spokeswoman Sarah Olney claimed Sunak was imposing “stealth taxes” on workers by freezing thresholds, as she aimed to lay claim to Blue Wall shire Tory seats.
“The Conservative Party is turning its back on its former heartlands, saddling families with endless stealth taxes and spiralling mortgage costs,” Olney said.
“Sunak could have chosen to lessen the pain. Instead he’s making ordinary families pay the price for years of Conservative chaos and mismanagement.”
A spokesperson for the Treasury said the UK had the “most generous” starting personal tax allowance threshold in the G7; had provided a “record increase” to the national living wage; and brought 3m “of the lowest earners out of paying tax altogether”.
They added: “Our tax system is helping to restore the public finances in the fairest way possible, with those earning the most bearing the most burden.”