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Thousands more British workers are set to pay a lot more tax, as 2 million Brits look
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set to earn more than £100,000, according to estimates from HMRC. Now, this is bad news for high earners, because the point at which the higher tax rate kicks
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in has drastically risen in line with inflation in order to ensure workers who get pay rises
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to keep up with the cost of living aren't yanked into higher bands. But, Chancellor Rachel Reeves
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decided to extend the tax threshold freeze until 2031 in the last autumn budget, meaning more people
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are being sucked into the higher tax bracket. Now these people are known as Henrys, high earners
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not rich yet. Despite their large paychecks, Henrys often have little savings or fewer assets
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because of the tax burden. People earning between £100,000 and £125,140 are taxed more heavily
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as the personal allowance of £12,570 goes down for every pound extra earned above the threshold
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And as soon as someone in a household earns over £100,000, they lose their free childcare hours
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regardless what another household member earns, which is a heavy blow for young families
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Now, it looks around 6% of the UK's workforce will earn six figures and fall into the income tax trap
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There are a few ways high earners can protect themselves against this tax trap, including through contributing more to their pension or making charitable donations
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Will you be affected by this? Let us know in the comments below
