Four major tax changes to impact millions in weeks

Currently, people pay income tax on annual earnings of more than £12,570, charged at 20 percent. Once earnings exceed £50,270 a year, people pay 40 percent tax on the income above that threshold. When they earn £150,000 or more, people pay 45 percent tax on that income.

From April, the 45 percent threshold will be reduced to £125,140 instead, which means those earning £150,000 or more will pay just over £1,200 more in tax every year.

Commenting on the change, Sarah Coles, senior personal finance analyst at Hargeaves Lansdown, said: “The cut in the higher rate threshold from £150,000 to £125,140 means more than 200,000 more people will be dragged into the 45 percent bracket, and additional rate taxpayers will pay an average of £1,200 more.

“Those on higher wages tend to have more wiggle room in their budgets, but rising prices have created headaches for top earners. Those with big mortgages will feel particular pain from higher mortgage rates too, so this additional tax blow is an unwelcome extra burden.

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