More over-65s pay additional-rate income tax

The number of pensioners paying income tax at the additional rate of 45% has increased over the past three years, government statistics show.

In 2019/20, income tax is charged at a basic rate of 20% for annual income between £12,501 and £50,000, while the higher rate of 40% applies between £50,001 and £150,000.

For income above £150,000, the additional rate is charged at 45%.

In the 2018/19 tax year, 37,000 people above state pension age were paying the additional rate - up from 34,000 in 2016/17.

Meanwhile, the number of people in this age group paying the higher rate of income tax, at 40%, fell from 514,000 to 508,000.

In 2018/19, the higher rate applied to income between £46,351 and £150,000.

The statistics were provided by Lord Young of Cookham in a parliamentary written response to a question from Baroness Ros Altmann, who asked for data on pensioners earning more than £50,000.

In total, 474,000 pensioners had a total annual income above this amount in 2018/19, compared to 418,000 two years earlier.

A third of those were over the age of 75, while 36% were between the ages of 65 and 69.

Talk to us about your tax liability.

See how we can help you...

We believe in being involved with the local business community and that is why we network extensively, host regular business seminars, write blogs and have many trusted, professional contacts