Hammond tipped to hit high-earners at Budget 2018

High-earners are the taxpayers increasingly being seen in chancellor Philip Hammond’s crosshairs at Budget 2018 on October 29th.

And on as many as three fronts according to reports over the weekend -- the threshold at which higher rate tax kicks in, their personal ‘tax-free’ allowance and pensions tax relief .

Changes to the latter introduced in 2016/17 for those whose total income is more than £150,000 have already raised £150m for the Treasury, thanks to a smaller annual allowance.

But “more likely” than Mr Hammond reducing the similar but separate £1million lifetime allowance (cut last year as well, by £250,000), is to taper down their annual allowance more.   

Also according to the Financial Times, the income threshold for the tapering (it tops out at £40,000, bottoms out at £10,000), could be cut by the chancellor from today’s £150,000.

Mr Hammond has used press interviews to say “nothing is off the table” as he looks to fund a £20billion-a-year pledge by the prime minister to fund the NHS.

Not even ruled out it seems is Tory manifesto commitments, as the party’s written promises to hike both the personal allowance and the higher tax rate are each set to be broken.

In fact, the Daily Telegraph reported that all individuals earning £50,000 or more are going to miss out on £860 a year, due directly to the £12,500 allowance now not going ahead.

The income threshold for higher rate tax will not move either, meaning it will stick to the existing one of £46,351 -- again, at odds with what the party pledged in 2017.

The Tories made no manifesto pledges about the additional rate of tax (45%) -- levied on earnings over £150,000, yet the chancellor may act due to it being unchanged since its introduction in 2010.