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Home » One million more Britons face income tax as average bill rises £640
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One million more Britons face income tax as average bill rises £640

By britishbulletin.com26 July 20263 Mins Read
One million more Britons face income tax as average bill rises £640
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An additional one million people across Britain are projected to become income tax payers in 2026-27 compared with the previous year, according to new research published by the TaxPayers’ Alliance.

The findings show that the average taxpayer will hand over £640 more in income tax this year than they did in 2024-25.


Of the million extra people drawn into the tax system, roughly half a million will fall into the basic rate band.

A further 410,000 are expected to become higher rate taxpayers, while 70,000 more will cross into the additional rate bracket.

The TPA’s analysis highlights the growing impact of frozen tax thresholds, a policy widely described as fiscal drag, which is pulling ever greater numbers of workers into higher tax obligations.

Older taxpayers are bearing an increasing share of the burden. The number of pensioners aged 65 and over who are liable for income tax has surged by 630,000 in just twelve months, climbing from 9.6 million to 10.2 million.

The overall income tax bill for 2026-27 is forecast to reach £347billion, representing a £43billion rise since Labour entered government in 2024-25.

Compared with two years ago, the typical taxpayer is now paying £1,040 more in income tax than they were in 2023-24.

The research also reveals that since 2010-11, the ranks of additional and higher rate taxpayers have swollen by 5.5 and 2.6 times respectively.

Of the million extra people drawn into the tax system, roughly half a million will fall into the basic rate band

| GETTY

Together, these two groups are expected to account for 72.9 per cent of all income tax revenue in 2026-27.

London and the South East account for the greatest concentration of higher and additional rate taxpayers in the country.

In the capital, 25.9 per cent of income taxpayers are on the higher rate, a figure that drops to 14.4 per cent in the North East.

In the North West — the region Prime Minister Andy Burnham calls home — 16.2 per cent of taxpayers fall into the higher rate band.

In the capital, 25.9 per cent of income taxpayers are on the higher rate

| GETTY

The threshold freeze, initially intended to expire after 2025-26, has been prolonged on two separate occasions and is now set to remain in place until 2030-31.

By that point, the policy is projected to generate upwards of £55billion, cementing its status as one of the most significant stealth taxes in the British fiscal system.

The TPA is urging Mr Burnham to act on the issue, noting that during the Makerfield by-election campaign, the new prime minister himself identified the frozen personal allowance as the concern raised most frequently by voters on the doorstep.

Freezing thresholds lets ministers rake in billions without admitting they have raised taxes

| GETTY

The campaign group is pressing Mr Burnham to unfreeze tax thresholds and curb government spending in order to ease the financial pressure on working families.

John O’Connell, chief executive of the TaxPayers’ Alliance, said: “A million more Brits are being caught in the taxman’s net by stealth.

“Freezing thresholds lets ministers rake in billions without admitting they have raised taxes, hitting workers, pensioners and families across the country.

“If Andy Burnham really wants to give hard-working taxpayers breathing space, he should end fiscal drag and unfreeze tax thresholds.”

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