Now Brits pay more than HALF their earnings to HMRC – Sunak's income tax rate hits 62.1%

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It means that some Britons effectively hand more than half of their earnings straight to HMRC. Our tax system is more punitive than ever and ordinary families are footing the bill.

The UK’s tax-mad Chancellor charged a record £718.2billion in tax in the year to March 2022, up 23 percent in just 12 months.

Income tax, National Insurance and capital gains tax hit a combined record high of £395billion, while inheritance and stamp duty receipts also surged.

These figures reflect the tax take BEFORE Sunak’s 1.25 per cent National Insurance hike came into force on April 6.

That will add another £12 billion to the Treasury’s tax receipts next year.

Sunak is not the first Chancellor to squeeze more money out of us by launching stealth tax raids, but he is the most aggressive.

Some taxpayers now pay an effective income tax rate of a staggering 62.1 per cent, one tax expert has warned.

That money go straight into HMRC’s coffers, and they never see a penny of it. While it won’t affect everybody, it shows how far Sunak will go to raid our pockets.

Basic rate taxpayers hand over 20 percent of their income above the personal allowance £12,570, while higher rate taxpayers pay 40 percent on earnings about £50,270.

Those who earn more than £150,000 pay additional rate tax of 45 percent.

In his Budget last March, Sunak froze these three tax bands at the same level for five years, until at least 2026.

This is a tax increase by any other name, and will drag more into higher tax brackets as wages rise.

In practice people already pay more, because National Insurance is charged on top of that.

From July, National Insurance will be charged at 13.25 percent on earnings between £12,570 and £50,270 a year.

So basic rate taxpayers will face a marginal rate of 33.25 per cent, once both levies are combined.

That’s a third of their income but others face a far more punitive rate.

NI falls to 3.25 percent on earnings above £50,270, said Sarah Coles, personal finance analyst at Hargreaves Lansdown.

“At this level, taxpayers face a marginal rate of 43.25 per cent. This means they hand over £43.25 of every £100 they earn above £50,270.”

However, income taxpayers with children face much higher effective rates, because child benefit is slowly withdrawn as incomes rise.

Due to an earlier tax raid launched by former Chancellor George Osborne, they lose one percent of their child benefit for each £100 they earn over £50,270.

This is called the high income child benefit charge. “Child benefit is £21.80 a week for the eldest child and £14.45 a week for each subsequent child. If you had two children your annual payment would be £1,885, of which one percent would be £18.85.”

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It means affected families hand over £62.10 of every £100 they earn to fill Treasury coffers, Coles said. “That’s a marginal tax-and-benefit rate of a staggering 62.1 percent.”

People assume that the more you earn, the higher the tax rate, but the UK’s complicated system doesn’t work like that, she said.

“As you pass through some tax brackets, you suddenly face eye-watering levels of tax, before the rate drops back down again.”

While this only affects higher rate taxpayer, a family raising two children on a single income of just over £50,000 does not exactly count as the super rich.

Coles said: “They need every penny as living costs rise but HMRC can take more than half of what they earn.”

This makes paying into a pension more rewarding, as you can use this to reduce your taxable earnings.

“Ask if your employer offers a salary sacrifice pension scheme,” she advised.



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