The number of people paying higher-rate tax is set to fall by one million, or more than a quarter, in the next two years as the recession hits the earnings of the best-paid and leads to some losing their jobs.
Estimates from HM Revenue & Customs (HMRC) project that the numbers paying tax at 40 per cent will fall from 3.89 million in 2007-08 to 2.9 million in the 2009-10 financial year.
Such a decline would end a seemingly inexorable rise in those bearing the burden of top-rate tax over the past decade. In 1997, there were just over two million on the 40 per cent rate.
The total amount of tax paid by those in the higher-rate category is also forecast to tumble, from