FRENCH INCOME TAX RETURN 2002 — A new app by the HRMC aims to create an easier way for people to calculate tax and learn what it is spent on. What about the calculations of who pays what to HMRC? Photograph: Sipa Press/Rex Features

How many people pay the top rate of income tax?

This article is more than 10 years old

Plans to restore the 50p tax rate have reignited an old political debate - but how many people are in the highest income tax band and how much money does it raise?

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Predictably, as another UK general election draws closer, the top rate of income tax has become a point of contention between the country's biggest political parties.

Ed Balls has said that if elected, the Labour party would bring back the 50p top rate of income tax for those earning over £150,000. Prime Minister David Cameron promptly hit back claiming the policy was irresponsible and would lead to greater government borrowing.

But is the policy more about political philosophy than economic fact? We looked at HMRC data to find out how many people are affected by the highest rate of income tax.

Although the highest rate of income tax only affects a tiny percentage of the UK's 29.3 million taxpayers, it represents a considerable chunk of HMRC's revenue from personal income.

Approximately 6,000 people in the UK pay tax on income over £2,000,000. At the lower extreme, 487,000 people pay tax on earnings over £9,440.

The first £9,440 of earnings is free of income tax. Earnings between £9,441 and £32,010 are taxed at the "basic rate" of 20%, between £41,452 and £150,000 are taxed at 40% and anything over £150,000 is taxed at 45%.

In total, 236,000 people pay the top rate of taxes on earnings over £150,000. Nationwide, the average rate of income tax is 17.7%.

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