A quirk in the tax system means hundreds of thousands of Brits are being charged a 60% rate of tax on a chunk of their salary, with the number of people affected rising
An unexpected quirk of the tax system has caused over half a million individuals to pay up to 60% of their top chunk of salary in taxes, thanks to a 'tax trap'. Strangely, this system is most punishing to those who receive pay rises, forcing them to pay an effective tax rate of 60%, starkly higher than the 45% rate for top earners.
'Unfortunately, if HMRC takes 60p in every pound you earn above £100,000, the lure of getting there is a lot more limited. It only disincentivises people from working harder, being more productive and ultimately generating economic growth.' In response, a Treasury spokesperson stated: 'We are committed to keeping taxes on working people as low as possible while maintaining fiscal responsibility, that's why we've pledged to not raise income tax, National Insurance or VAT.
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