If you earn a lot in the UK, you are writing much bigger checks to HMRC than you used to. Bloomberg's analysis adds it up at £100 billion a year more than just after the financial crisis, a jump that is unsettling many high earners as Chancellor of the Exchequer John Healey readies his first budget on Oct. 28.
When the additional rate was first applied, those caught by it paid £35 billion, equal to 23% of all income tax. At present, that group hands over £138 billion, accounting for 40% of the total, and its membership has more than tripled to 1.3 million. They account for only 3% of all income taxpayers but deliver 12% of overall tax receipts, up from 6% in 2010-11.
The Labour government announced a new top income tax layer in 2009, effective the following year, charging 50% on earnings above £150,000. In 2013, then-Chancellor George Osborne lowered the rate to 45% and argued the higher level sent a "terrible signal to the rest of the world," but the earnings threshold stayed put.
Leaving the threshold unchanged meant more people were drawn in as pay rose. That effect grew after the pandemic's burst of double-digit inflation and the Conservatives' move in 2023 to drop the threshold to £125,140. If the original £150,000 cutoff had kept pace with prices, it would sit near £240,000 today. Thresholds for people in lower bands have been held steady since 2022, adding to the squeeze.
The increased burden on high earners sits alongside other targeted measures, from private school fees and high-value property to the long-standing non-domiciled regime. As for taxes, Andy Burnham, the new prime minister, has kept the door open to fresh levies. In a pre-Downing Street interview with Gary Lineker, he would not rule out taxes on the "super rich," saying "we need a greater sense of fairness," and he sidestepped repeated questions from opposition leader Kemi Badenoch on tax rises earlier this month.
That backdrop has stoked chatter that wealth, property and capital gains could feature as Healey hunts for revenue in a world of the highest borrowing costs in decades. While officials have hinted the next budget may be a quieter affair, there is still plenty of speculation that Burnham, like leaders before him, could look to those with the "broadest shoulders" to steady the public finances.
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Concerns about an outflow of wealth resurfaced after hedge fund founder Chris Rokos chose to relocate to Greece. The prominent trader, one of the UK's biggest taxpayers, joins a run of high-profile financiers and executives leaving. Even so, moving abroad to cut tax bills is usually a last resort, especially for families with children in school.
Since 2010, Stuart Adam of the Institute for Fiscal Studies, where he serves as a senior economist, has argued that policy choices - largely by Conservative chancellors - have shifted the tax system more toward higher earners, and that neither major party has been eager to emphasize this. According to the IFS, the bottom fifth of households experienced income drops of over 10% between 2010-11 and 2024-25, largely from welfare reductions; by contrast, tax changes meant the richest tenth saw an average decline of roughly 2%, while those in the middle did comparatively better.
Andy Summers, who directs the Centre for the Analysis of Taxation, cautioned that how taxpayers respond is pivotal. "Employees pay much higher rates than everyone else," he said.
Public opinion is not on the side of the rich: a YouGov poll suggests most people think the wealthy should pay more. And the pressure is not only at the very top. Research from the Resolution Foundation finds the employee on the £33,000 median wage will still have a lower effective tax rate in 2025 than it did before the financial crisis, and among 16 wealthier OECD peers with higher tax-to-GDP ratios than the UK, all raise more from an average-wage single earner. As James Smith, the think tank's chief economist, put it, "There is a strong case that any benefits of increased defense spending will be broadly shared, so the tax rises needed to find this should be too, including higher rates on middle earners."
Bottom line for your money: the direction of travel points to more people paying more, whether through rate tweaks, threshold freezes or both. If you are anywhere near the higher bands, the mix of headline changes and quiet fiscal drag is likely to matter more to your take-home pay than market swings on any given week.
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