More than 100,000 dragged into higher rate tax as Sunak urged to publish returns

Thousands more taxpayers ended up paying higher rates between 2019/20 and 2020/21, according to new figures that came as Rishi Sunak faced renewed calls to publish his own returns.

The number of higher rate taxpayers increased by 100,000 between the two tax years, to four million, with an increase of £2.5bn-worth of tax to £64.9bn, according to HM Revenue & Customs (HMRC) figures.

The number of additional rate taxpayers also rose by 12,000 over the same period, to 433,000.

The income tax liabilities of additional rate taxpayers increased by £2.8bn, to £63.7bn, mainly driven by salary increases, HMRC said.

The prime minister promised to release his tax returns during his unsuccessful Tory leadership campaign last summer, in an attempt to put transparency at the heart of his bid.

He faced continued pressure to release the documents when it emerged Tory former minister Nadhim Zahawi settled an estimated £4.7m bill with HMRC while he was chancellor.

At Prime Minister’s Questions on Wednesday, Labour MP Richard Burgon said: “Over 100 days ago the prime minister promised to publish his tax returns. He still hasn’t.

“People want transparency in our politics, especially because [Sunak] is the richest prime minister in history and because of the concerns there have been.

“So, why on earth hasn’t the prime minister published his tax returns yet? When will he do so? And when he does so, will he include his US tax returns?”

Mr Sunak responded: “As I have previously confirmed, I will publish my tax returns and that will be done very shortly.”

In February, Scottish first minister Nicola Sturgeon released her tax returns dating back to 2014 and said she would “anticipate and expect” that Mr Sunak would do the same.

Mr Sunak’s family finances faced scrutiny when The Independent revealed the “non-dom” status of his wife, Akshata Murty.

Following the controversy, Ms Murty declared that she would pay UK taxes on all her worldwide income.

The HMRC figures, released on International Women’s Day, also showed that in 2020/21 there were more male than female taxpayers in every age bracket, and men had higher median average income throughout.

For men, the number of taxpayers peaks in the 30 to 34-year-old age bracket, at 1.8 million.

Among women, the number paying tax peaks later in life, aged 50 to 54, at 1.4 million.

The median average income across all age groups was £28,700 for men and £23,600 for women.

Rachael Griffin, a tax and financial planning expert at Quilter, said of the increase in people paying higher tax rates: “This should come as no surprise considering since 2019 the rate at which someone starts to pay higher rate tax has shifted minimally, despite wage growth during that time being significant due to a range of factors, including the pandemic.

“Wage growth is still likely to accelerate, with inflation often forcing employers to pay their employees more so they can cope with rising costs.”