- Britain’s highest earners are paying £100 billion more in annual income tax than after the financial crisis.
- About 1.3 million people are expected to pay the 45% additional rate in 2026 as thresholds stay frozen.
- October’s budget could add a 2% annual levy on assets over £10 million, widening the tax debate.
Britain’s highest earners are paying £100 billion more in annual income tax than they did after the financial crisis, according to an analysis published September 12, 2026. The estimate compares today’s yearly burden with the period after the 2008 downturn.
The increase reflects more than one policy decision. Fiscal drag, rising earnings among top taxpayers and years of tax changes have moved more income into higher bands, the analysis said.
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The figures are fueling concern among wealthy taxpayers before a possible budget under Andy Burnham. The political discussion is also turning toward wealth, not just earnings.
The estimate comes from analysis rather than a government release. It puts the additional burden at $135 billion a year when converted into dollars.
Frozen thresholds are pulling more incomes into higher bands
The threshold for the UK’s top income-tax rate fell from £150,000 to £125,140 in April 2023. It has remained frozen since then.
That freeze increases the number of people drawn into higher rates as pay rises. About 1.3 million people are set to pay the 45% additional rate in 2026, more than double the level recorded in 2021/22.
The number captures the effect of bracket creep. Taxpayers can face higher liabilities even when Parliament has not raised the headline rate.
| Measure | Figure |
|---|---|
| Previous additional-rate threshold | £150,000 |
| Threshold from April 2023 | £125,140 |
| People expected to pay the additional rate in 2026 | 1.3 million |
| Comparable period | 2021/22 |
The Association of Taxation Technicians linked frozen thresholds to a rise in receipts recorded by HMRC. Data released on August 21, 2026 showed income-tax receipts reached £117.6 billion during the four months from April to July 2026.
Receipts totaled £109.8 billion in the same period of 2025. The group said frozen thresholds helped drive the increase.
Possible wealth taxes could widen the budget fight
Rachel Reeves, the UK finance minister, is weighing options for taxing wealth in the October budget. Campaigners have discussed a 2% annual levy on assets over £10 million.
That proposal would target assets rather than income. It would therefore reach a different base from the income-tax changes that have expanded the number of people paying higher rates.
The possible levy has added another issue for wealthy taxpayers already facing greater income-tax exposure. The proposal remains part of the options under consideration for October.
The political framing around Burnham’s possible budget has focused attention on how much more high earners now pay. Reeves’ review points to a separate question: whether ministers will seek additional revenue from accumulated assets.
The top 1% already sits far above the higher-rate threshold
For tax year 2023 to 2024, the income threshold for the UK’s top 1% stood at £207,000 before tax. The after-tax threshold was £134,000.
Those figures help show the gap between the population targeted by the highest bands and the much broader group affected when thresholds remain fixed. The additional-rate threshold is now £125,140.
Income growth can push taxpayers into higher bands without a matching change in the tax code. That mechanism, combined with the frozen threshold, has become a central part of the recent revenue increase.
The October budget will determine whether the discussion stays focused on income or expands to assets above £10 million. It will also show whether the current 45% rate remains the main pressure point for the UK’s wealthiest taxpayers.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
