The tax-free personal allowance starts to be withdrawn once earnings hit £100,000 and individuals may pay more in taxes and student loan repayments than they take home.
With tax thresholds frozen until 2031, an estimated 500,000 additional workers are expected to be affected by this ‘tax trap’, writes FT consumer editor Claer Barrett.
There is speculation that this topic may become more prominent on the political agenda now that MPs’ salaries have reached £98,599.
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