Boris Johnson is proposing raising the threshold for paying higher rate income tax to £80,000. It is currently at £50,000. This means that income tax on earnings between £50,000 and £80,000 will fall from 40% to 20%. Because the national insurance thresholds would rise too, the total income tax and employee national insurance on earned income will fall from 42% to 32%. This represents a much needed tax cut for millions of middle class taxpayers.
In 2018-19, the higher rate threshold was £46,350. This was increased to £50,000 for 2019-20. According to research from the Taxpayers’ Alliance if governments since Blair in 1997 had increased the threshold in line with earnings, it would have been £58,895 by next year. If governments had increased the threshold in line with earnings since Margaret Thatcher’s last budget in 1988-89, it would have been £73,268 by next year. The higher rate was never designed to be paid by millions of what Corbyn’s 2017 manifesto called “ordinary households”…
Fiscal drag is real and has dragged millions of middle class families into a tax bracket that was only ever intended to be paid by the rich. For Conservative candidates to oppose a much needed reset of the thresholds to keep up with inflation and earnings increases is incomprehensible. These are the middle class voters that have to be won back from the Labour and Brexit parties…
The TaxPayers’ Alliance (TPA) is celebrating a huge policy victory, with the Government finally implementing a £95,000 cap on pay-outs in the public sector, a measure that was promised by George Osborne and only now implemented.
The financial crisis in 2008 saw expenditure sky rocket. The UK can only become a high growth economy if it is a low tax economy.
