UK Income Stats 2022/23 – What the Numbers Say
HMRC has just dropped its latest income figures for the tax year 2022/23, and let’s be honest – the news isn’t exactly a hit parade.
Income After Tax: A Slipping Trend
While it might look like everyone’s earning a little more, the reality is that everyone’s felt a pinch. The median income actually rose by 4 % year‑on‑year—but that figure sits on a bedrock of 7.8 % inflation (CPIH) by April 2023. In plain English, folks across the board are effectively earning less in real terms.
Tax Share – Who’s Really Carrying the Load?
- Higher Rate Taxpayers (40 % bracket) – made up 14.8 % of all taxpayers but paid 34.7 % of the total tax revenue.
- Additional Rate Taxpayers (45 % bracket) – only 1.7 % of the population yet carried a whopping 34 % of the tax bill.
- Basic Rate Taxpayers (20–40 % bracket) – dominated the voter base with 81.8 % of all taxpayers but only contributed 30.8 % of tax.
- Savers Rate Taxpayers (12.5 % bracket) – a tiny group, 1.8 % of taxpayers and a mere 0.4 % of total tax.
So, even though you might have worked a bit harder that year, the taxman’s appetite has increased more for those in the middle‑to‑top lanes.
What the Experts Are Saying
Investment Manager Nicholas Hyett of Wealth Club sized up the picture:
“Seeing the past tinted with rose‑eyed glasses can make the numbers feel better, but pull those glasses off and the story isn’t so rosy. In 2022/23 every income percentile lost purchasing power due to a 7.8 % inflation spike. Even the middle earners – the ones most likely to rely on that steady wage – saw a modest 4.1 % increase in median income, which only half‑dampened the upward pressure on higher rate taxpayers.
Back in 2021/22, higher rate payers made up 32.6 % of the tax intake; this jumped to 34.7 % in 2022/23. The number of people in that bracket climbed from 32.6 % to 34.7 % of all taxpayers. The trend, it seems, will only speed up. Fixed tax bands effectively creep taxpayers larger into higher brackets, quietly increasing the tax they owe—much to the detriment of the middle class.
In short: the tax bands are designed to keep the middle‑billion‑pounders in their rightful place, while the tax tables quietly push those around into higher rates.
Takeaways for the Average Brit
- Even a “small” middle‑income boost can feel like a real‑term loss.
- Taxpayer weight is shifting: more people, and a bigger slice, are now shouldering the tax load.
- Future: Fixed bands will continue to tick taxpayers into higher tax bands, squeezing the middle class.
Stay tuned for updates on how these trends shape the next tax year—no need for a crystal ball, just keep an eye on the numbers!
