You are here: Home - Household Bills - News -

Call for rise in 40p tax threshold

Written by:
A report is calling for the 40p income tax threshold to be raised to stop hundreds of thousands of extra people falling into the bracket.

The report claims that tax thresholds are not being raised in line with wages meaning that, while 3.7 million taxpayers paid the 40p rate last year, this figure will rise to five million by 2014, reports the Daily Mail.

Motivating The Middle has been published by Conservative MPs Kwasi Kwarteng and Priti Patel.

It argues the problem has been caused by the threshold rising slower than earnings under New Labour, and the level at which 40p tax falls has then been lowered by Chancellor George Osborne as he raises the tax-free personal allowance.

The 40p tax threshold is due to fall again to £41,450 next year, for most earners, from its current £42,475 level.

Kwarteng said: ‘When Lloyd George brought in his ‘supertax’ in 1909, it was only paid by those on around the equivalent of £500,000 a year. Now the higher rate of 40% income tax is increasingly paid by those in the middle class.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week