Nearly two million people in the UK have been pushed into the higher-rate income tax band since the start of the decade, according to new data from HM Revenue and Customs. A total of 5.76 million individuals were paying the higher rate during the 2023/24 tax year, marking a 50% increase from 3.83 million in 2019/20.
Between 2022/23 and 2023/24 alone, an additional 654,000 people entered the higher-rate band, a year-on-year rise of 13%. HMRC attributed the surge to the frozen higher rate threshold and rising incomes, particularly from employment, which have brought more taxpayers into the 40% bracket.
Frozen Thresholds and Fiscal Drag
The threshold for the higher rate of income tax has remained fixed at £50,271 since 2021/22. Traditionally, tax thresholds increase with inflation, but the freeze—introduced by the former Conservative government—has led to more people being caught by fiscal drag as wages rise. Chancellor Rachel Reeves confirmed at the November 2025 Budget that the freeze will continue until 2030/31, likely pulling even more individuals into higher rates.
In 2023/24, higher-rate taxpayers accounted for 15.7% of all UK taxpayers, nearly one in six, up from 12.2% (roughly one in eight) in 2019/20. They contributed 32.0% of total income tax revenue in the year ending March 2024.
Basic and Additional Rate Trends
The number of basic rate taxpayers reached 29.40 million in 2023/24, up nearly three million from 26.50 million in 2019/20. This increase was driven by the personal allowance remaining at £12,570, combined with rising incomes, which increased the amount taxed at the basic rate and brought more people into income tax liability. The personal allowance freeze has been in place since 2021/22 and is also set to continue until 2030/31.
Additional rate taxpayers—those earning over £125,140 and paying 45%—rose sharply from 570,000 in 2022/23 to 893,000 in 2023/24, a 57% increase. Though they represent only 2.4% of all taxpayers, they contributed 37.7% of income tax revenue.
Expert Reaction
Sarah Coles, head of personal finance at AJ Bell, commented: "Almost eight million people relying on their pension for their main source of income are handing over £24 billion in tax every year – nearly half a million of whom are paying higher-rate tax. Meanwhile, higher earners are shouldering an incredibly hefty tax burden, with higher and additional-rate taxpayers handing over almost 70% of all tax between them. Frozen tax thresholds mean this is only going to get worse for everyone. In this environment, it's vital to make plans to ensure you don't pay more than your fair share of tax."
