The think tank said some 15% of all UK taxpayers could come under the 40p band by next year – including many people earning “modest” salaries, reports said this morning.
The IFS said the number of people paying 40% tax could increase from 3.7m last year to 5m by 2014. It added the figure is three times that of the total in the 1980s.
The increase in higher rate taxpayers comes after George Osborne announced moves to raise the lower threshold for income tax.
The Daily Telegraph said to ensure higher paid workers do not fully gain from that cut the point at which 40% tax starts will fall – meaning more people pay the upper rate.
The report said the higher-rate threshold will be frozen at £42,475 in 2012-13. The next year, it will be reduced to £41,450.
The Treasury estimated about 325,000 additional people would fall into the 40% tax band.
However, IFS director Paul Johnson said it could rise from 3.7m to 5m in 2014.
He said: “This is part of a long-term trend towards the encroachment of 40% income tax on to people earning above average but relatively modest salaries.”
