Income Tax

Treasury written question – answered on 27th April 2018.

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Photo of Graham Brady Graham Brady Chair, Conservative Party 1922 Committee

To ask Mr Chancellor of the Exchequer, what estimate his Department has made of the number of taxpayers who are paying an effective marginal rate of tax on income in excess of (a) 40, (b) 50, (c) 60 and (d) 70 per cent once account has been taken of tax arrangements relating to pension contributions in the most recent tax year for which data is available.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

HMRC publishes statistics on income tax liabilities, including by marginal income tax rates. These can be found here:

https://www.gov.uk/government/statistics/income-tax-liabilities-by-taxpayers-marginal-rate

The Reduced (tapered) pensions annual allowance was introduced in 2016-17 for individuals with income of over £150,000 including the value of any pensions contributions.

HMRC does not hold information on the effective marginal rate of tax of individuals who have been subject to the Reduced (tapered) pensions annual allowance, as the effective rate an individual faces depends on numerous other factors.

The Tax Impact and Information Note for this measure, published in 2015, detailed that around 300,000 pension savers could be affected by this measure:

https://www.gov.uk/government/publications/pensions-tapered-annual-allowance/pensions-tapered-annual-allowance

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