Strategies for a high tax environment
Tax burdens change as you earn more
The income tax system has changed significantly in recent years. Until the spring 2021 Budget, governments had focused on increasing the personal allowance, but despite this the number of income tax payers today is much the same as in 2010/11.
At the same time, the share of income tax paid by those with higher incomes has increased: the share of total income tax receipts paid by the top 25% of taxpayers rose from 71.3% in 2010/11 to an estimated 76.2% in 2020/21.
The figures reflect a truth often felt by some – that the tax burden increases as you start to earn more and it is likely that much of the burden of restoring the battered national finances after the Covid-19 pandemic will fall on the wealthy and high earners. This guide looks at ways to mitigate a high-tax environment.