Workers on more than £54k pay 60% of Britain’s tax bill

HIGH earners pay more than half of all income tax, experts said yesterday.

Those who get £54,000 or more a year – the top 10 per cent of earners – contribute nearly 60 per cent of all income tax revenues, the Institute for Fiscal Studies said.

Its analysis – which warns that taxes usually rise after elections whichever party wins – was published as Theresa May signalled the wealthiest will bear the brunt of any future increases.

Although the PM made clear she had no plans to raise taxes, she pointedly insisted she would target ‘working families’ with tax cuts.

Speaking in Ormskirk, Lancashire, Mrs May said: ‘I’ve been very clear that we have no intention of increasing the level of tax but you’re right, I have said, and I repeated here today, our intention is to reduce taxes on working families.

‘If you look at what has happened for those who are the highest earners – the top 1 per cent of taxpayers – they are paying a higher proportion of income tax than they did in any year of a Labour government. A fair tax system – that’s what we look for, and Conservatives’ natural instinct is for lower taxes.’

The IFS report showed how reliant the Exchequer is on higher earners. It found that the top 1 per cent – whose gross incomes are more than £165,000 a year – pay 27 per cent of all income tax.

That is up from 25 per cent in 2010-11, and only 11 per cent in 1978-79.

The top 10 per cent of earners, those paid £54,000 or more, pay nearly 60 per cent of all income tax. By contrast, the bottom half of taxpayers provide less than 10 per cent.

The report also found that by 2019/20, tax receipts will be at their highest level for more than three decades. They are due to hit 34 per cent of national income, the highest level since 1981-82.

The report warned that taxes usually rise after elections, whatever promises are made by politicians. In the year after the past six elections, dating back to 1992, taxes have risen ‘significantly’.

The IFS criticised the ‘tax lock’ in the 2015 Tory election manifesto which promised not to raise income tax, VAT or National Insurance. ‘A Government that wanted, or thought it might be necessary, to raise additional revenues in future would be foolish to tie their hands by ruling out increases in these workhorse taxes,’ the report said, adding that two-thirds of all tax revenues came from the ‘triple-lock’ taxes.

On Sunday, Mrs May ruled out raising VAT over the next five years, but the party is expected to drop the triple lock in its manifesto – leaving the door open to NI or income tax hikes.