The figures suggest the number of people paying higher rate tax is rising rapidly and with thresholds frozen until 2028 there is little respite in sight.

Analysis by Financial Planner and wealth manager Quilter points to the additional rate tax threshold being lowered from £150,000 to £125,140 in April 2023 as having had a significant impact.

The number of people paying the 45% additional higher rate of tax, paid on earnings above £125,140, is up 180,000 in the past year.

Quilter analysis of HMRC data out this week found:

• The number of higher rate taxpayers rose to 6.31m in the 2024/25 tax year, up from 6m in 2023/24. There were 4.43m higher rate taxpayers in 2021/22

• The number of additional rate taxpayers has risen to 1.13m in 2024/25, up 180,00 from 950,000 in 2023/24 and almost twice the 520,000 seen in 2021/22

• Fiscal drag, rising incomes and frozen thresholds are the main reasons for the rises which are expected to continue

Rachael Griffin, tax and Financial Planning expert at Quilter, said the statistics revealed the government’s “stealth tax agenda.”

She said: “This continued upward growth in higher and additional rate taxpayers comes as no real surprise given income tax thresholds are set to be frozen until 2028.

“The pandemic had a profound impact on the economy, and so too has the subsequent cost of living crisis, both of which caused a surge in wage growth due to a combination of factors including increased demand for certain jobs, supply chain disruptions and inflationary pressures.

“However, despite this wage growth, the rate at which someone starts to pay higher rate tax has barely changed, moving from £50,000 to only £50,270 for the tax year 2021 to 2022 and remains that way. What’s more, the additional rate threshold was lowered from £150,000 to £125,140 from April 2023 which will have contributed heavily towards this rise.”

Ms Griffin said that the impact of fiscal drag has been under-estimated. She cited the Office for Budget Responsibility’s initial projections that there would be only 6.7m higher rate and 1.1m additional rate taxpayers by 2027-28.

She said: “The fiscal drag impact has far surpassed any original expectations the government had and we will continue to see the government's coffers be topped up exponentially as more and more people are pulled in.”

She said the figures suggest the tax system needs to be re-evaluated to avoid excessive pressure on taxpayers. She said an increasing number of taxpayers were seeing their money go less further and also, in some cases, losing benefits.

She added: “The next administration faces a critical decision of whether to recalibrate tax thresholds or risk perpetuating a system that risks stifling economic growth and unfairly targets those struggling to keep up with living costs."

• Read Editor Kevin O'Donnell's comments on rising tax bills from last week.