40p Tax band - history

[jesusbuiltmycar]

The papers are full of grim news from the Autumn Statement, one of the things they are pointing out is that yet more people are set to become higher rate tax payers as a result of fiscal drag - the 40% tax band threshold is not going to increase in line with inflation.

400,000 more earners pushed on to 40p tax rate

I thought `fiscal drag` has been a favourite revenue raising measure of previous chancellors, and that George Osbourne is just following the same course.

Does anyone have a graph showing how the 40% threshold has changed in the last 20 years?

Edited by jesusbuiltmycar on Thursday 6th December 14:53

[jesusbuiltmycar]

Ahonen said:

cerbfan said:

But just going into the 40% tax bracket is not a massive loss is it? Just means that the few hundred quid that is above the threshold of 40% instead of the previous rate. I'd swear that a lot of people think that once you go above the threshold you pay 40% on your whole salary the way its bleated on about.

Yes, this bemuses me, too.

The quote at the bottom of that Independent article referenced on page 1 beggars belief:

Indy article said:

Rachel Reeves MP, the shadow Chief Secretary to the Treasury, said: “Millions of struggling families on middle and modest incomes are paying the price for this government’s economic failure.”

She added: “How can this government claim we are all in this together when working families, striving to do their best, are being singled out?”

I appreciate it's just a lefty going for a soundbite but Rachel, we're talking about £117 a year. Or one dinner for two in a pub with two bottles of house red. It's a tiny figure. If your finances are that tight that you are budgeting down to the last £2.25 a week of your £43k gross earnings you really should take a careful look at your expenditure. Maybe I'm tight, but I earn only a little more than than and I can honestly say that I wouldn't really notice losing £117 a month, so £117 a year is nothing.

This is why I would like to know the recent history of increases to the threshold, the press are banging on about more people being dragged into paying higher rate tax, but I am sure that Brown didn't move the threshold in line with inflation either.

Out of interest what would the threshold be if it had increased in line with inflation every year since 1997?