The Government has been urged to address a 60% tax trap, with experts warning that frozen thresholds mean more than 2.1m people will lose some or all of their personal allowance in the 2026/27 tax year. Investment platform IG highlights that the frozen personal allowance creates a high marginal tax rate between £100,000 and £125,140, discouraging investment. Sean McCann, a chartered financial planner at NFU Mutual, said: "It's the ambition of many people to reach an income of £100,000, but it comes with an unexpected sting in the tail." Office for Budget Responsibility (OBR) forecasts show that the share of taxpayers paying higher or additional rates is expected to rise from 15% in 2021/22 to 24% by 2030/31, largely due to frozen thresholds. The OBR also estimates there will be 1.4m additional-rate taxpayers by 2028/29, up from 1.2m currently, meaning the number will have increased by 1m since 2017/18, when around 400,000 people paid the top rate.
