When the chancellor announced his growth plan on 23rd September, it was met with a lot of negativity due to the decision to scrap the additional tax rate.
The additional tax rate is currently paid by taxpayers whose earnings are about £150,000, are have a tax rate of 45%.
The growth plan announced that it was going to abolish the additional so that any earning £150,000 will have the same tax rate as the higher rate band of 40%.
Due to the amount of negativity and concerns, the chancellor came out on 3rd October, to announce that the additional rate plans have been updated.
As a result, I’m announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened. This will allow us to focus on delivering the major parts of our growth package.
This means that the Tax bands will not be changing.
Band | Taxable Income | Tax Rate |
|---|---|---|
Personal Allowance | Up to £12,570 | 0% |
Basic Rate | £12,571 - £50,270 | 20% |
Higher Rate | £50,271 - £150,000 | 40% |
Additional Rate | 45% |