According to data released by the institute of Fiscal Studies (IFS) the number of adults paying tax has fallen dramatically since 2007-08 as the government has passed more of the burden to higher earners.
The study shows that only 56% of adults pay income tax in the UK at a time when the government needs all the revenue it can get to balance the books. The increased burden on higher earners makes it even more important to seek the right financial and tax advice to ensure that tax returns are accurate and money is saved on income tax where possible.
Tax receipts as a proportion of national income have fallen faster than at any time since the 1950s which may create a headache for the chancellor who has so far opted to continue easing the tax burden for the middle classes while raising the tax burden elsewhere.
The percentage of number of adults paying income tax in 2007-08 was 65.7% before the government chose to raise the tax free allowance. The top 1% of earners on the other hand have been asked to contribute more than 3% extra as the higher rate tax threshold was lowered. Buy to Let landlords have also been hit with higher stamp duty in an effort to discourage property investors and reduce inflation in the housing market.