Thousands of Britons face 93 per cent tax after allowances cut in Autumn Statement | Personal Finance | Finance

The analysis found that few workers were paying Top tax rate 60 percent or even 93 percent, The Telegraph reports. These higher marginal rates apply to a portion of a person’s income, for those in high-paying professions such as law or banking.

Personal allowance falls to £1 for every £2 of income for Britons earning between £100,000 and £125,140, ​​a tax rate of 60 per cent for this part of a person’s income.

Those earning more than £125,140 will pay 45 per cent income tax and lose the £12,750 personal allowance in full.

Graduates who started university after 2012 may have to pay more if they have to repay their student loans.

If a graduate earns £27,295 a year or more, repayment starts at an additional tax rate of nine per cent.

read more: New and basic State Pension rates – how much you’ll get next year with increases

High earners paying the top rate also lose the savings allowance, which applies to income from funds in savings accounts.

Those in the basic rate can earn up to £1,000 in interest while higher-tax payers can earn up to £500 before tax.

People on the top rate of tax lose this allowance entirely, meaning they will receive a tax bill on any interest earned outside of an ISA or their pension savings.

For example, someone earning £124,150 who graduated and received a £1,000 pay rise in the last ten years would pay tax at an effective rate of 93 per cent on National Insurance.

Don’t miss out

Daniel Pryor, of the Adam Smith Institute think tank, said: “No one should lose their pay rise in order to withdraw benefits.

“Marginal rate reform won’t grab the headlines on Budget day, but politicians need to explore ways to make our tax system simpler and fairer. If we want to boost growth and raise living standards for all, work must always pay off.”

A Treasury spokesman said: “We are committed to protecting people on low incomes, and that is why [we] Since 2010 the tax-free personal allowance has been one of the most generous in the world, with 30 per cent of people excluded from paying income tax and more than 80 per cent of taxpayers paying the basic rate. Only possible through responsible management of public funds.

Tens of thousands of Britons will pay capital gains tax for the first time as the threshold is halved from £12,300 to £6,000, the autumn report announced.

This limit will be reduced next April and halved again to £3,000 in April 2024.

Tommy McNally, CEO of tax-refund app Tommy’s Tax, said the tax changes would affect retirees and business owners.

He said: “Jeremy Hunt has reduced the deduction for capital gains tax from £12,300 to £6,000, while dividend payments will be reduced from £2,000 to £1,000.

“This is going to directly affect business owners and pensioners.”

He warned Britons: “Taxpayers should make sure they are aware of the new tax rules so they know the exact amount they owe.

“With HMRC under constant pressure due to an increased number of audits coupled with September’s disastrous mini-budget, people wanting to file a tax return should start the process now to reduce the chance of being hit with a penalty on submission.”



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